Stocks rallied today with Microsoft's blowout earnings announcement, their fiscal first quarter earnings beat expectations by more than $1 billion and Countrywide's upbeat profit forecast for the future.
Overall, it was another turbulent week with rumors swinging the market every which way. Rumors that the Fed will lower interest rates again when they meet next week, that AIG will have a very large write down etc.
Items of note for the week:
Merrill Lynch wrote down a whopping $7.9 billion of subprime and collateralized debt obligations, this was $3.4 billion dollars ABOVE their October 5th estimate! They reported a $2.24 billion dollar loss as compared to last year's $3.05 billion dollar profit. Needless to say, the subprime debacle continues to spread.
New Homes Sales, which were expected to come in at 770k(representing a 3.1% decline from August)came in at this number but the headline read it as a 4.8% increase as the August number, which was originally reported as 795k was revised to 735k. Confusing? A little but the revision made the September number look great, even though it came in as expected.......assuming no revisions.
Existing Homes Sales fell 8% to an annualized 5.04M. This is the slowest pace since the National Association of Realtors started reporting on this figure in 1999! The year to year decline is at 19.1%.
Housing Inventories for September were at a 10.5 month supply, the highest level since 1999.
