MARKET SNAPSHOT: U.S. Stocks Down Again As Market Mulls Earnings Ahead

January 9, 2008 1:49pm ET

By Kate Gibson U.S. stocks bounced around Wednesday as a recession forecast from Goldman Sachs and concern about profit reports ahead offset cheer fueled by a raised 2008 forecast from chemicals giant and Dow industrials component DuPont. "It is going to be tough to spot bargains when the tone for the U.S. economy and financial stocks is this negative," said Kevin Giddis, fixed-income trading managing director with Morgan Keegan & Co. Inc. But given the increasingly negative sentiment, a turnaround could be close, Giddis said. "The recent data suggest that the U.S. economy is falling into recession," Goldman Sachs said in a note early Wednesday, in which it also predicted the Federal Reserve would cut interest rates further in response. The Dow Jones Industrial Average (DJI) was off 39.4 points at 12,549.7, with 19 of its 30 components trading lower. General Motors Corp. (GM) fronted the blue chip bleeding, its stock off 5.1%. The Dow's financial stocks also fared poorly, with JPMorgan Chase (JPM) down 1.8% and Citigroup Inc. (C) off 1.7%. The index's biggest gainers included E.I. du Pont de Neumours & Co. (DD), which gained 4.7%. . The S&P 500 (SPX) fell 3.68 points to 1,386.51, while the Nasdaq Composite (RIXF) dropped 13.76 points to 2,426.75. Heavy metal On the New York Mercantile Exchange, gold futures edged higher after surging to a new record high of $894.40 in electronic trading early on. . Crude-oil futures reversed earlier losses after news that U.S. inventories had declined for an eighth week, with crude for February delivery recently up 60 cents at $96.93 a barrel. . Volume on the New York Stock Exchange topped 1 billion shares, and declining stocks ran ahead of those advancing nearly 2 to 1. On the Nasdaq, more than 1.5 billion shares exchanged hands, and decliners beat advancers 2 to 1. As economic worries roiled the equities market, the Bush administration was reportedly considering a rebates and tax breaks to stimulate the economy. . St. Louis Federal Reserve President William Poole offered a more optimistic view of the economy in an address early Wednesday, predicting a recession would be avoided. . Federal Reserve Chairman Ben Bernanke is slated to speak Thursday. Tuesday's washout On Tuesday, fears that Countrywide Financial would file for bankruptcy -- denied by the mortgage lender -- and AT&T's pessimistic outlook triggered a renewed battering for U.S. stocks, with the Dow industrials falling 238 points, the Nasdaq Composite dropping 58 points for its eighth consecutive fall, and the S&P 500 losing nearly 26 points. Countrywide (CFC) stock, which on Tuesday fell 8.8%, declined further Wednesday, and was recently down 15%. "Housing is driving the bus right off the cliff and taking most financial-related companies with it," said Giddis. For the Dow Jones Wilshire 5000, which lost 266.64 points or 1.8%, Tuesday's close capped the worst five-day start of a year in nearly three decades, with the index down 5.78%, or $1.0 trillion, so far this year. The bell tolls After the close of trade, Alcoa (AA) is expected to report a 55% drop in earnings per share, excluding restructuring charges. Shares of Alcoa were off 1.8%. . E-Trade Financial (ETFC) jumped 1.3% after saying it will exit its institutional trading desk and that it sold $3 billion in available-for-securities, taking a loss of less than $5 million. And, shares of MBIA (MBI) fell 13.3% after the bond insurer said it was slashing its quarterly dividend from 34 cents to 13 cents to strengthen its capital. Overseas, European shares touched a 15-month low, as dismal quarterly sales from one British retailer heightened worries about consumer spending trends. . In Asia, several markets rebounded from early lows amid bargain-hunting. . (END) Dow Jones Newswires 01-09-08 1348ET Copyright (c) 2008 Dow Jones & Company, Inc.

Wellington West Announces 2008 Top Picks

January 9, 2008 1:35pm ET

TORONTO (Dow Jones)--Wellington West Capital Markets Inc. announced its top picks for 2008, highlighting nine stocks from five segments of the Wellington West coverage universe that have "potential to outperform their benchmark indices and peers over the year." In a research report Monday, several Wellington West analysts discussed stocks from the energy, mining, technology, agriculture, and "special situations" segments. Energy Analyst Malcolm Shaw cited Calgary oil and gas company Antrim Energy Inc. (AEN.T) as a top pick, saying he believes Antrim is on-track for production of about 30,000 barrels of oil a day by the fourth quarter of 2009. He maintained the stock at strong buy with a C$9.50 target price, but noted that the company's potential 2009 cash flow could drive its share price up to C$16. Shaw also recommended Sterling Resources Ltd. (SLG.V), which trades on the TSX Venture Exchange, at speculative buy with a C$4.50 target. Analyst Kim Page recommended Calgary oil and gas producer Breaker Energy Ltd. (WAV.A.T) at strong buy with a C$8.50 target, noting that drilling at the company's Irricana project is driving "extraordinary" light oil volume gains. The company's light oil mix is increasing, Page said, adding that its oil/gas ratio should be 50% or more oil by the middle of 2008. Mining Leonie Soltay recommended Toronto resource sector royalty and investment company Franco-Nevada Corp. (FNV.T), rating it at buy with a C$20 target. Soltay's 2008 royalty revenue estimates are supported by strong 2008 commodity outlook, and the company's diversified royalty portfolio and limited costs support a 2008 cash-flow estimate of 98 U.S. cents a share, the analyst said. Analysts Catherine Gignac and Robertson Velez recommended Inter-Citic Minerals Inc. (ICI.T), citing drilling results from the company's Dachang project in China, which continues to return consistent grades and widths. They rate the Toronto mining company's stock a buy with a C$3.25 target. "Special Situations" Analyst Greg Colman recommended Arctic Glacier Income Fund (AG.UN.T), a Winnipeg-based distributor of packaged ice products, at strong buy with a C$15.50 target. He said the company should start to realize synergies in mid-2008 from acquisitions completed in 2007, noting that Arctic Glacier's steady growth story offers "attractive free cash flow generation stemming from seven years of successful industry consolidation." Analyst Robert Winslow recommended COM DEV International Ltd. (CDV.T) at strong buy with a C$6 target, citing "healthy" macro tailwinds such as the ongoing satellite replacement and HDTV rollout. He added that high U.S. space defense spending is also a positive for COM DEV product demand. COM DEV, Cambridge, Ont., makes space hardware components and subsystems. Agriculture and Technology Winslow also recommended agriculture company Cervus LP (CVL.UN.V), which trades on the TSX Venture Exchange, at strong buy with a C$24 target. Greg Reid recommended technology company IPICO Inc. (RFD.V), which also trades on the TSX Venture Exchange, at strong buy with a C$2.50 target. Wellington West has investment-banking relationships with all the companies recommended save for Cervus L.P. None of the analysts own shares in the companies they covered. Company Web sites: http://www.antrimenergy.com, http://www.sterling-resources.co.uk, http://www.breakerenergy.com, http://www.franco-nevada.com, http://www.inter-citic.com, http://www.arcticglacierinc.com, http://www.comdev.ca, http://www.cervuslp.com, http://www.ipico.com -Tara Zachariah, Dow Jones NewsWires; 416-306-2100 (END) Dow Jones Newswires 01-09-08 1334ET Copyright (c) 2008 Dow Jones & Company, Inc.