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Bernanke Backs Decision to Bail Out Bear

Discussion in 'Forex Daily News & Outlook' started by MTnews, Apr 3, 2008.

  1. MTnews

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    Daily Market Commentary for April 3, 2008 from Millennium-Traders.Com

    Economic Data released today added a sour tone to the market activity. Trading activity was generally muted today with the major indices cautiously moving into positive territory during the afternoon trading session. Fed Chairman Ben Bernanke testified in front of the Senate Banking Committee today, transcript of his comments can be found lower in this publication. At the hearing today regarding the Bear Stearns bailout were Chairman Bernanke; Timothy Geithner, President New York Federal Reserve; Christopher Cox, Chairman Exchange Commission; Robert Steel, Treasury Undersecretary; Jamie Dimon, representative from JPMorgan Chase and, Alan Schwartz, CEO of Bear Stearns. Part of the comments included that from Timothy Geithner that the assistance to bail out the Bear was risky "but the risks are modest in comparison to the substantial damage to the economy and economic well-being that potentially would have accompanied Bear's insolvency." "The purpose of our action, as with our other recent actions including our provision of liquidity to financial firms and our reductions in the federal funds rate target was, as best as possible, to improve the functioning of financial markets and to limit any adverse effects of financial turmoil on the broader economy," Bernanke said this morning. "I think they (the Fed) made the right decision," Senator Chris Dodd, chairman of the committee said today. "You could have had not only a national but a global meltdown" if Bear had collapsed. Additional comments from the hearing: "We did not cherry-pick the assets in the collateral pool," Dimon said in his prepared statement. "The notion that Bear Stearns's riskiest assets have been placed in the $30 billion Fed facility is simply not true." "We did not bail out Bear Stearns," Bernanke said on Wednesday. "We did what we did because we felt it was necessary to preserve the integrity and viability of the American financial system, which in turn is critical for the health of the economy." "The damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain," Bernanke said.

    At the closing bell on the Stock Exchange, here is how the major indices ended the session on the U.S. Markets:

    DOW (Dow Jones Industrial Average) gain of 20.20 points on the day to end the session at 12,626.03

    NYSE (New York Stock Exchange) gain of 36.18 points to end the session at 9,140.64

    NASDAQ gain of 1.90 points for a close at 2,363.30

    S&P 500 gain of 1.78 points for a close at 1,369.31

    FTSE All-World ex-U.S. gain of 0.60 points to close at 246.24

    FTSE RAFI 1000 loss of 0.90 points to close at 5,559.29

    BEL 20 loss of 54.19 points on the day to end the session at 3,783.58

    CAC 40 loss of 24.1 points on the day to end the session at 4,887.87

    FTSE100 loss of 24.6 points on the day to end the session at 5,891.30

    NIKKEI 225 gain of 31.47 points on the day to end the session at 13,545.60

    On the NYSE today, advancers came in at 1,803, decliners totaled 1,343; unchanged came in at 97; new highs came in at 53 and new lows came in at 13. Momentum NYSE stocks traded by active Day Traders today: CF Industries Holdings, Incorporated (CF) gained 8.66 points with a high on the day of $116.60, a low of $104.01 for a closing price at $114.55; Transocean, Incorporated (RIG) gained 1.80 points with a high on the day of $141.96, a low of $137.00 for a closing price at $140.38; Bunge Limited (BG) gained 4.69 points with a high on the day of $96.40, a low of $86.82 for a closing price at $92.61; Patriot Coal Corp (PCX) gained 7.85 points with a high on the day of $58.50, a low of $48.02 for a closing price at $54.80; NVR Incorporated (NVR) gained 30.04 points with a high on the day of $639.79, a low of $601.50 for a closing price at $636.95; NAVTEQ Corporation (NVT) shed 2.51 points with a high on the day of $65.49, a low of $61.91 for a closing price at $63.39; MF Global Limited (MF) gained 1.45 points with a high on the day of $13.29, a low of $9.95 for a closing price at $11.47; UltraShort Financials ProShares (SKF) shed 0.13 points with a high on the day of $104.65, a low of $99.62 for a closing price at $101.10; Mosaic Corporation (MOS) gained 4.35 points with a high on the day of $109.60, a low of $99.61 for a closing price at $104.52; CME Group, Incorporated (CME) gained 5.80 points with a high on the day of $515.89, a low of $499.47 for a closing price at $513.90; Petroleo Brasileiro (PBR) gained 1.49 points with a high on the day of $112.11, a low of $107.34 for a closing price at $109.96; Monsanto Corporation (MON) gained 5.79 points with a high on the day of $119.45, a low of $110.65 for a closing price at $117.79; Uniao de Bancos Brasileiros S.A. (Unibanco) (UBB) gained 1.48 points with a high on the day of $129.69, a low of $124.29 for a closing price at $127.08; Potash Corp. of Saskatchewan, Incorporated (POT) gained 6.58 points with a high on the day of $169.33, a low of $160.16 for a closing price at $167.67.

    On the NASDAQ today, advanced totaled 1,342; decliners totaled 1,561; unchanged came in at 143; new highs came in at 18 and new lows came in at 65. Momentum NASDAQ stocks traded by active Day Traders today: Plexus Corporation (PLXS) shed 3.64 points with a high on the day of $28.00, a low of $24.55 for a closing price at $25.64; Garmin Limited (GRMN) shed 3.60 points with a high on the day of $55.75, a low of $50.81 for a closing price at $52.81; Research In Motion Limited (RIMM) gained 6.79 points with a high on the day of $124.03, a low of $116.66 for a closing price at $122.58; Trimble Navigation Limited (TRMB) gained 0.62 points with a high on the day of $28.59, a low of $26.52 for a closing price at $28.43; Google Incorporated (GOOG) shed 10.58 points with a high on the day of $463.29, a low of $448.13 for a closing price at $455.12; Baidu.com, Incorporated (BIDU) gained 5.16 points with a high on the day of $289.20, a low of $273.30 for a closing price at $286.64; First Solar, Incorporated (FSLR) gained 2.05 points with a high on the day of $254.50 a low of $243.11 for a closing price at $251.60.

    U.S. Institute for Supply Management (ISM): March Non-Manufacturing Composite Index came in at 49.6 U.S. ISM March Non-Manufacturing Composite Index Expected to come in at 48.7; U.S. ISM March Non-Manufacturing Business Index came in at 52.2; U.S. ISM March Non-Manufacturing Composite Index came in at 49.6 versus February reading of 49.3; U.S. ISM March Non-Manufacturing Business Index came in at 52.2 versus February reading of 50.8; U.S. ISM March Non-Manufacturing Employment Index came in at 46.9 versus February reading of 46.9; U.S. ISM March Non-Manufacturing Prices Index came in at 70.8 versus February reading of 67.9; U.S. ISM March Non-Manufacturing New Orders Index came in at 50.2 versus February reading of 49.6.

    U.S. Jobless Claims rose 38K to 407K in week of March 29 compared to survey of an increase by 4K; U.S. Continuing Claims for week of March 22 rose by 97K to 2,937,000; U.S. Jobless Claims for week of March 22 revised to 369K from 366K. Report indicated highest number of claims filed since 1995.

    Commodities Markets
    The trend was lower across the board today for the Energy Sector: Light crude moved lower today by $0.98 to close at $103.85 a barrel; Heating Oil moved lower today by $0.03 to close at $2.92 a gallon; Natural Gas moved lower today by $0.42 to close at $9.42 per million BTU and Unleaded Gas moved lower today by $0.05 to close at $2.72 a gallon.

    Metals Markets ended the session higher across the board today: Gold moved higher today by $9.40 to close at $909.60 a Troy ounce; Silver moved higher today by $0.30 to close at $17.48 per Troy ounce; Platinum moved sharply higher today by $48.30 to close at $2,012.90 per Troy ounce and Copper moved higher today by $0.02 to close at $3.90 per pound.

    On the Livestock and Meat Markets, the trend was higher across the board today: Lean Hogs ended the day higher by $3.00 to close at $69.60; Pork Bellies ended the day higher by $3.00 to close at $70.88; Live Cattle ended the day higher by $1.53 to close at $89.15 and Feeder Cattle ended the day lower by $1.53 to close at $89.15.

    Other Commodities: Corn ended the day nicely higher by $7.25 at $610.25 and Soybeans ended the day nicely higher by $14.00 to end the session at $1,257.00.

    Bonds were higher across the board today: 2 year bond closed higher by 1/32 at 99 23/32; 5 year bond moved higher by 1/32 to close at 98 29/32 today; 10 year bond moved higher by 5/32 to close at 99 10/32 and the 30 year bond moved higher by 2/32 to close at 99 22/32 on the day.

    The e-mini Dow ended the session today at 12,628 with a gain of 9 points on the trading session. The total Dow Exchange Volume for the day came in at 169,955 which are comprised of Electronic, Open Auction and Cash Exchange. Traders should review workshops available at the CBOT (Chicago Board of Trade) Educational in-person seminars schedules available on CBOT (Chicago Board of Trade) website.

    Monitor scheduled economic data every market morning by viewing the Daily Market Report from Millennium-Traders, free access to visitors on our website.

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