Equity markets tumbled sharply on Thursday over concern of new financial regulation. The Dow Jones Industrials tumbled 213.27, or 2 percent, to 10,389.88. The broader Standard & Poor’s 500 index lost 21.56, or 1.9 percent, to 1,116.48. The Nasdaq composite index declined 25.55, or 1.1 percent, to 2,265.70.

Don’t worry republicans, if you dont like it you have your filibuster. It’s what you do best.

Morning Outlook

Following the sharp declines on Wall Street yesterday, futures look for the market to open decisively lower on Friday. By the closing bell, we could be in for the worst two day slide the market has experienced since June. Dow Jones industrial average futures fell 51, or 0.5 percent, to 10,287. Standard & Poor’s 500 index futures declined 4.60, or 0.4 percent, to 1,106.50, while Nasdaq 100 index futures dropped 3.00, or 0.2 percent, to 1,838.00. The dollar is mostly lower alongside commodities as equities tumble and demand is coming into the equation.

Google inc (GOOG) failed to enthuse investors following their earnings release after the closing bell on Thursday, while GE did the same this premarket. With such a run up the past 10 months, the news is going to have to be great, and its not. Now you also have a tightening of policy in China and possible new regulation of the major financial institutions. There are too many cards in play.

This is day 3 of the market correction. I knew it was going to happen. I was surprised that we had a nice rally the first half of the month, but yeah, see you at 9700

On the Corporate Front

General Electric Co. (GE) saw a 10 percent decline in revenue to $41 billion in the quarter. The hedge fund with a light bulb posted a 19 percent drop in earnings as net income tallied $2.94 billion, or 28 cents per share. That compared with $3.65 billion, or 35 cents, a year earlier. Analysts expected 26 cents per share in earnings.

Currencies and Commodities

The dollar fell 0.5419% at 89.94 yen in the currency market. The euro appreciated 0.2884% to $1.4124 while the pound lost 0.5496% to $1.6106. Gold fell $11 to $1102.92 an ounce, while silver declined 1.03% at $17.33. Light, sweet crude for March delivery lost 33 cents to $75.75 per barrel on the NYMEX; a 0.43% decline. Here we go down and test $75.

Time to look back on the year that was 2009, and the end of the first decade of the 21st century. For Wall Street, is was a decade most would like to forget. One thing we have definately learned is that despite the way 2010 starts, it is not a precurser to how it will end.

The benchmark Standard & Poor’s 500 is down about 10 percent over the last 10 years, which puts Wall Street on course to register its first-ever negative decade on a total return basis, even with dividends reinvested.

Even the Great Depression in the 1930s, which followed the stock market crash in October 1929 and spanned one of the worst periods for stock investing, turned out positive as dividends helped investors cushion some of the turbulence.

Below is a list of the 5 top performers and laggards for the blue chips.
LOSERS:

- General Electric (GE) -54.18 pct

- Merck & Co (MRK) -46.49 pct

- DuPont (DD) -39.94 pct

- Alcoa Inc (AA) -21.78 pct

- Coca-Cola Co (KO) -14.89 pct

WINNERS:

- United Technologies Corp (UTX) 155.49 pct

- Caterpillar Inc (CAT) 148.65 pct

- 3M Co (MMM) 127.68 pct

- Hewlett-Packard Co. (HPQ) 92.70 pct

- Exxon Mobil Corp (XOM) 86.56 pct

Where do we go from here? You have some swearing that this is a V shaped recovery, while others point out that the economic fundamentals don’t support that. The facts are that you have a ton of government monetary and fiscal stimulus in the system right now. The November unemployment rate stands at 10%.

The S&P 500 is up 66.5 percent from a 12-year closing low set on March 9. Its trading levels now imply a forward price/earnings ratio of 15.5. Such a huge run up begs the question where will the correction come. for 2009, the S&P 500 is up 24.7 percent — a gain that puts the broad market index on track for what could be its best year since 2003. An even stronger advance this week could put the S&P 500 in position for its best year since 1998. For 2009, the Dow is up 19.9 percent and the Nasdaq is up 45 percent.

Trading to start the year will be determined based whether or not the economy can grow without government support. I don’t know if it can. There are serious underlying problems in this economy, with the lack of serious consumer spending being number one. You have seen a generational shift, as people are saving more and spending less.

And then you have the X factor…Terrorism. All bets are off when it comes to economic direction when you throw that wild card in. In the best of economic times and can cause panic, as we stand now it could be a near fatal blow to the American way of life. This near Christmas tragedy is a reminder of all the nuts out there.

U.S. stocks jumped on Monday, extending gains from the previous week, on renewed risk-taking sentiment after the G20 pledged to keep economic stimulus in place until a recovery was assured. 29 out of the 30 blue chips rose, sending the Dow Jones Industrial Average to its highest close this year. The major averages all powered forward, shaking off the 10.2% employment number from Friday.

The Dow Jones industrial average jumped 203.52 points, or 2.03 percent, to 10,226.94; a 13 month high. The Standard & Poor’s 500 Index rose 23.78 points, or 2.22 percent, to 1,093.08, while the Nasdaq Composite Index gained 41.62 points, or 1.97 percent, to 2,154.06.

Morning Outlook

Following the massive rally yesterday on the street, futures point to a lower open. Dow futures are down 14, or 0.2 percent, at 10,178. Standard & Poor’s 500 index futures are down 2.00, or 0.2 percent, at 1,089.70, while Nasdaq 100 index futures are down 1.00, or 0.1 percent, at 1,765.50.

Once again there is a lack of economic reports to influence trading. Yesterday the weak dollar and activity from General Electric Co (GE) and Comcast Corp (CMCSA) added fuel to the buying. Im not sure what actually justifies such a run up, but this is a great market to trade, like we do all day in our chat room over at Investors Underground!

On the Corporate Front

Beazer Homes USA Inc (BZH) posted a quaretly profit of $33.8 million, or 84 cents per share. That compares with a loss of $473.9 million, or $12.29 per share, a year earlier. The results were from the company’s fiscal 4th quarter. Revenue fell 42 percent to $376.3 million from $649.8 million. The homebuilder beat the street on the top and bottom line, as analysts expected a loss of $1.24 per share on revenue of $338.3 million.

Currencies and Commodities

The dollar rose 0.03% at 89.952 yen in the currency market. The greenback stabalized against foreign currencies following yesterday’s big declines. The euro fell 0.15% at $1.4977 while the pound dipped 0.6093% to $1.6656 . After closing at an all time high, gold lost $2.50 to $1098.90 an ounce, while silver declined 1.57% at $17.29. Light, sweet crude for December gave up 27 cents to $79.16 per barrel on the NYMEX; a 0.34% decline.

Market Summary

U.S. stocks jumped on Monday, extending gains from the previous week, on renewed risk-taking sentiment after the Group of 20 pledged to keep economic stimulus in place until a recovery was assured. 29 out of the 30 blue chips rose, sending the Dow Jones Industrial Average to its highest close this year. The major averages all powered forward, shaking off the 10.2% employment number from Friday.

The Dow Jones industrial average jumped 203.52 points, or 2.03 percent, to 10,226.94; a 13 month high. The Standard & Poor’s 500 Index rose 23.78 points, or 2.22 percent, to 1,093.08, while the Nasdaq Composite Index gained 41.62 points, or 1.97 percent, to 2,154.06.

Corporate mergers and acquisitions also boosted the market, with General Electric Co (GE) and Comcast Corp (CMCSA) agreed on a valuation of around $30 billion for a joint venture between NBC Universal and Comcast.

Dollar Pegged Commodities Soar

Energy and mining stocks were nice performing sectors, as called in the morning outlook as the falling dollar shot spot prices higher. Gold closed at a record $1,101.40 an ounce in New York, up $5.70 from Friday, after hitting a new high of $1,111.70 an ounce earlier in the day. The gold bugs are loving this, as gold has gained more than 23% on the year. Benchmark crude for December delivery on Monday rose $2 to settle at $79.43 a barrel on the NYMEX

More Layoffs on the Street

Sprint Nextel Corp (S) is starting the process of eliminating up to 2,500 jobs in the current quarter in an effort to save at least $350 million annually. The company employs 42,000 workers. The No. 3 U.S. mobile service said many of the job cuts would happen by the end of December and would include jobs across the entire company

Electronic Arts Inc.’s (ERTS) will cut 1,500 jobs, most by March 31, in a restructuring aimed at trimming at least $100 million in costs. The company currently has about 9,000 employees.

In their quarterly report, EA experienced a loss of $391 million, or $1.21 a share, compared with a year-earlier loss of $310 million, or 97 cents a share. Adjusted revenue rose 2% to $1.15 billion; compared to analyst expectations of $1.14 billion.

Market Summary

Wall Street finished with modest gains Monday in a seesaw session that was heavily influenced the days economic data. Despite the positive signs, investor’s brought back some volatility to the market, dragging the blue ships down to nearly half of their earlier gains. The Dow Jones rose 76.71, or 0.8 percent, to 9,789.44. The broader Standard & Poor’s 500 index rose 6.69, or 0.7 percent, to 1,042.88, and the Nasdaq composite index rose 4.09, or 0.2 percent, to 2,049.20. The Russell 2000 index of smaller companies fell 0.37, or 0.1 percent, to 562.40. Doubting the strength in the financials seems to be the new in thing. Citigroup Inc (C), Bank of America Corporation (BAC), may even throw General Electric Co. (GE) in there with their financing arm.

The yield on the benchmark 10-year Treasury note rose to 3.42%; a 3 basis point gain. Benchmark crude for December advanced $1.13 to settle at $78.13 a barrel on the NYMEX.

Rundown of the Data

The Institute for Supply Management’s gauge of manufacturing activity grew in October at the fastest pace in more than three years. It was driven by businesses’ replenishing of stockpiles, higher demand for American exports and support from the government’s $787 billion stimulus program.
The ISM index shot up to 55.7 in October, the third straight reading above 50, which signals growth in the sector. It was the highest level since April 2006.

The Senate is expected this week to pass an extension of the credit that was originally going to expire Nov. 30. Buyers who sign a purchase agreement by April can now claim the credit. The extension is packaged at $10.8 billion.

The extension will apply to higher income buyers. Previously the credit was available to individual filers making $75,000 a year or less. For couples the limit was $150,000. The new income limit will be $125,000 for individuals and $225,000 for couples.

There’s also something in for move-up buyers. Previously you couldn’t claim the credit if you owned a home in the past three years. Now, if your last home was your primary residence for at least five years, you can claim $6,500 in credit if you buy a new home. The new house can’t cost more than $800,000.

In the meantime, the National Association of Realtors reported that pending home sales jumped 6% today to a reading of 110.1. That’s the highest level since December 2006. And it’s more than 21 percent above a year ago.

It’s a busy week ahead on the street, as enthusiastic earnings reports from Alcoa (AA) and JP Morgan (JPM) were brought down to life Friday by Bank of America (BAC) and General Electric (GE)

Headlining earnings this week will be tech favorite Apple Inc (AAPL) and economic bellwether Caterpillar Inc (CAT ). 3M and Microsoft (MSFT), also along with 11 other Dow components, including McDonald’s Corp (MCD ), Pfizer Inc (PFE), Coca-Cola Co (KO), American Express (AXP) and DuPont (DD).

On the technology front, in addition to Apple and Microsoft, the spotlight will also fall on chipmaker Texas Instruments Inc (TXN) and Internet retailer Amazon.com Inc (AMZN), whose results may reveal how consumers are gearing up for the holiday shopping season.

Web media company Yahoo Inc (YHOO) is also on tap, along with United Parcel Service Inc (UPS ), eBay Inc (EBAY ), Kimberly-Clark (KMB), Altria Group (MO) and Hasbro Inc (HAS ).

61 companies in the S&P 500 had reported third-quarter results by Friday and 79 percent of them beat Wall Street expectations. Overall, S&P 500 third-quarter results are forecast to show a drop of 22.6 percent from a year ago.

Wall Street went from red to green on Thursday late in the trading session. Despite a weak performance from financials following Goldman and Citi earnings, energy stocks picked up the slack as crude exploded to fresh yearly highs. The Dow Jones Industrials found themselves positive, up 47.08 points, or 0.47% to 10,062.94. The S&P 500 added 4.54 points, or 0.42% to 1,096.56. The tech heavy Nasdaq climbed 1.06 points to 2,173.29

Morning Outlook

Futures are sliding in the premarket following earnings reports from General Electric Co (GE) and Bank of America Corp (BAC). We have seen the blue chips close over 10K for the first time in a year, will they rally and hold this week’s gains into the weekend?

Dow Jones industrial average futures fell 26, or 0.3 percent, to 9,938. Standard & Poor’s 500 index futures lost 2.90, or 0.3 percent, to 1,086.90, while Nasdaq 100 index futures declined 4.00, or 0.2 percent, to 1,744.50.

BofA Still Stinking it Up

Bank of America Corp (BAC) posted a net loss of $1 billion, or 26 cents per share, for third quarter, compared with net income of $1.18 billion, or 15 cents per share, in the same period last year. In addition, the nation’s largest bank set aside an additional $11 billion in loan loss reserves, $5 billion more than the same quarter in 2008.

Finance Arm Still Hampering GE

General Electric Co (GE) posted a 44-percent decline in profit to $2.4 billion, or 23 cents per share, compared to earnings of $4.3 billion, or 43 cents a share a year ago. On the top line, revenue fell 20 percent to $37.8 billion

Economic Calendar

9:15 AM
Industrial Production: The index of industrial production measures the physical output of the nation’s factories, mines and utilities. The consensus is for a production increase of 0.2% for the month of September; following a 0.8% rise in August.

9:55 AM
Consumer Sentiment: Consumer sentiment is directly related to the strength of consumer spending, by questioning 500 households each month on their financial conditions and attitudes about the economy. The consensus reading for October is 74, up from the prior reading of 73.5. Recent news on the economy has been better with equities rebounding and initial jobless claims coming down. But the unemployment rate may still be at the forefront of consumer worries.

Market Summary

After falling the prior two weeks, Wall Street recovered those losses and then some by the closing bell Friday. Markets jumped after being slightly negative in the premarket following an upgrade in tech heavy weight IBM. The Dow Jones Industrial average closed up 78 points, or 0.8%, to 9,864.94; a new high for the year. The S&P 500 was up 6 points, 0.6%, to 1,071.49, while the Nasdaq Composite Index rose 15 points, or 0.7%, to 2,139.

For the week, the Dow gained about 4%, its best since the week of July 20, when it was also up 4%. The S&P 500 finished up 4.5% and the Nasdaq up 4.5%.

Crude oil closed up 8 cents to $71.77 a barrel on the NYMEX, while gold fell $7.70 to $1,048.60 an ounce. The 10-year Treasury note was yielding 3.38%, a 12 basis point increase.

Trade Deficit Narrows on Weak U.S. Demand

Exports rose for the 4th straight month on global demand and a slumping dollar, sending the trade deficit to a narrower than expected $30.7 billion in August; a 3.5% decline. The sale of farm products and autos sent exports of goods and services up 0.2 percent to $28.2 billion, the highest level since December. Slumping demand for foreign oil, which fell 5.7%, was reflected in a 0.6% drop in imports, totaling some $158.9 billion.

Big Week of Earnings Ahead: 10K Plus By Weekend?

Tuesday: Johnson & Johnson (JNJ), Intel (INTC). The last comes after the close. Their discussions on the economy are important. Their guidance will be more important. If Intel’s guidance about profits and sales is strong, the stock market could have a big day on Wednesday.

Wednesday: JPMorgan Chase (JPM) and Abbott Laboratories (ABT).

Thursday: Goldman Sachs (GS) and Citigroup (C) IBM (IBM) and Google (GOOG). Goldman Sachs shares are up 124% this year alone. If Goldman misses estimates — the consensus is $4.20 a share — watch out. IBM was the Dow’s best performer on Friday after an upgrade.

Friday: General Electric (GE) and Bank of America (BAC). Toss in Mattel (MAT) as well because it will offer a peek at the upcoming holiday shopping season. GE shares have risen at least 10% every month since February and are fairly close to hitting their 2008 close of $16.20. GE’s guidance will be very important. Watch Bank of America for two things: a successor for CEO Ken Lewis (if one isn’t announced beforehand) and how much Merrill Lynch is contributing to its bottom line.

Market Summary

A decline on Wall Street turned into a sharp selloff in the final minutes of trading Thursday, sending the market to its worst day since the beggning of the 3rd quarter. The blue chips, which have been trading in a pretty narrow range, fell to their lowest levels in nearly a month after the Dow fell 203.00, or 2.1 percent, to 9,509.28. The broader Standard & Poor’s 500 index fell 27.23, or 2.6 percent, to 1,029.85, and the Nasdaq composite index dropped 64.94, or 3.1 percent, to 2,057.48. The Russell 2000 index of smaller companies fell 20.53, or 3.4 percent, to 583.75.

Tomorrow in the premarket the wonderful people at the Labor Department will bring us September’s Employment Situation. The confidence doesn’t seem to high right about now, as the market has fallen 6 out of the last 7 sessions.

Despite the fall in equities, rise in bond prices and the greenback, light, sweet crude rose 21 cents to settle at $70.82 a barrel on the NYMEX.

Jobless Claims Rise

The latest worries erupted when the Labor Department said new claims for jobless benefits rose last week to 551,000. It was an unexpected 17,000 rise in the reading heading into tomorrow’s employment report for September. The jobless claims report showed the four-week moving average of initial applications fell to 548,500 last week from 554,250. In addition, continuing claims rose 2.9 percent to 3.7 million.

GE Close to Selling NBC

Comcast Corporation (CMCSA) is in discussions with General Electric Co (GE), which owns 80% of NBC, about joint ownership of the business, which is valued by analysts at $30bn-$35bn. Under the arrangement being discussed, NBC Universal would be spun off into a standalone company, with Comcast owning 51% and GE holding 49%.

Hmmm so let’s see, do shareholders like it? Comcast fell 7.17% to $15.67 during trading today. I would say that’s a pretty emphatic no against the worst of the 3 major networks…

A $300 million cash-for-clunkers-type federal program to boost sales of energy-efficient home appliances provides a glimmer of hope for beleaguered makers of washing machines and dishwashers, but it’s probably not enough to lift companies such as Whirlpool Corporation (Public, NYSE:WHR)and Electrolux out of the worst down cycle in the sector’s history.

Beginning late this fall, the program authorizes rebates of $50 to $200 for purchases of high-efficiency household appliances. The money is part of the broader economic stimulus bill passed earlier this year. Program details will vary by state, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications. The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November. (Unlike the clunkers auto program, consumers won’t have to trade in their old appliances.)

“These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy,” Energy Secretary Steven Chu said in a statement announcing the plan. Only appliances covered by the Energy Star seal will qualify. In 2008, about 55% of newly produced major household appliances met those standards, which are set by the Energy Dept. and Environmental Protection Agency.

The money can’t come soon enough for the home appliance industry, which is mired in an unprecedented sales slump that began when the housing market cooled in 2006. Since then that slump has worsened considerably. Shipments of washers, dryers, refrigerators, and ovens dropped 10% in 2008 and are down 15% through July, according to the Association of Home Appliance Manufacturers. “It’s brutal,” says Raymond James Financial, Inc. (Public, NYSE:RJF) analyst Sam Darkatsh.

The leading appliance makers have felt the pinch. Whirlpool of Benton Harbor, Mich., which controls about 40% of the U.S. market, has seen its sales drop 20% through the first two quarters of this year. North American shipments for its Stockholm-based rival Electrolux, meanwhile, have dropped for a dozen consecutive quarters. Both companies have laid off hundreds of workers, and General Electric Company (Public, NYSE:GE)mulled shutting down an entire refrigerator plant earlier this year until deciding to keep it open with a reduced workforce.