Manuel Backus Blog

Wanna bet against Steve Jobs and the iPhone?

2007-06-29T15:57:44Z

Unless you've been living in a cave, you've probably been hearing (and seeing) a lot about the iPhone, the Apple handset.

In New York, people are camping outside the Apple Store hoping to be the first one to get their hands on it:

So as a trader, maybe you think it’s time to go long on AAPL and ride the “iPhone madness”, right? Think again.

Yesterday, I came across an article in the WSJ with a surprising conclusion: AAPL may be overvalued!

To reach this conclusion, they compare AAPL’s handset business with Nokia’s (NOK):

Since the iPhone was unveiled on January 9th this year, shares of AAPL went up from $85 to over $120. This has increased AAPL market cap in $34 billion. That means investors are valuing the iPhone business in $34 billion. That’s a lot of iPhones! But AAPL is expecting to sell only 10 million iPhones by the end of 2008.

Compare this to Nokia (NOK), who is expected to sell 550 million phones in the same period, and has a $108 billion market cap.

So NOK sells 55 phones for every iPhone. Yet its market cap is only worth 3 times as AAPL’s iPhone business. This doesn’t make sense in my book.

So what do you think? Should we short APPL and bet against Steve Jobs? (I never thought I would say that!)

To Higher Returns,

Manny Backus
The Stock Trading Whiz Kid

P.S. The available spots for Portfolio Crafter are going fast. We initially had 137, now we only have 24. If you haven’t secured yours, please click click here now.

Daily Market Brief for April 05, 2007

2007-04-06T00:56:20Z

Stocks closed higher on the day and week, with the Dow Jones Industrial Average posting its first six-session string of gains in more than four months. However, price action was restrained on light trading volume ahead of the three-day Easter holiday. Gains were also limited by anticipation about Friday's monthly employment report, which is likely to influence trading early next week.

Today, the Dow Jones industrial average closed up 30.15 or 0.24% to 12,560.20, the broader S&P 500 closed up 4.39 or 0.30% to 1,443.76, and the Nasdaq closed up 12.65 or 0.51% to 2471.34. For the week, the Dow gained 1.7%, the S&P gained 1.6%, and the Nasdaq gained 2.1%.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by 19 to 12 on volume of 1.246 billion shares. On the Nasdaq, advancers edged decliners 16 to 13 on volume of 1.558 billion shares.

With the Iranian situation solved, people feeling good ahead of the holiday, and easing of oil prices, saw the stocks higher. However, tomorrow the release of the Labor Department's March employment report is awaited. Employers are expected to have added 135,000 jobs to their payrolls after adding 97,000 in the previous month. A report showing the number of Americans filing new claims for unemployment last week rose more than expected. The unemployment rate is expected to have risen to 4.6% in March from 4.5% in February.

Recent spate of weaker-than-expected economic reports have raised concerns about the pace of economic growth in 2007. At the same time, other reports have shown increased pricing pressure. This has sparked confusion as to how the Federal Reserve might handle the combined problems of slowing growth and higher inflation. Because of this, a particularly strong March payrolls report would probably weigh on stocks Monday, while a slightly weaker to in line report would be preferable.

Shares of Daimler Chrysler (NYSE: DCX) closed up $3.73 or 3% to $84.80, after billionaire investor Kirk Kerkorian offered to buy Chrysler for $4.5 billion. His bid is contingent upon reaching a deal on a new labor agreement with the United Auto Workers union. He would offer ownership stakes to the union and its membership as well as Chrysler management were he to buy it. The offer is contingent on reaching an "equitable arrangement" with DaimlerChrysler for it to assume some of the unfunded pension liabilities and health care costs of Chrysler retirees.

Stock of Micron Technology (Nasdaq: MU) closed down $0.56 or 4.6% to $11.51, after reporting quarterly earnings loss that was steeper than expected. The chipmaker also said that prices for memory chips have stabilized recently and that demand should pick up this year. The company took a $52 million loss in its second quarter and was cut to sell by Goldman Sachs. For the first quarter of fiscal 2007, the company reported a profit of $192 million, up from $63 million earned in the same period last year. This topped analysts' consensus estimate. Quarterly sales rose 16% to $1.58 billion, helped by demand for DRAM memory chips used in PCs being built ahead of Microsoft Corp.'s release of Vista.

U.S. light crude oil for May delivery fell 10 cents to settle at $64.28 a barrel on the New York Mercantile Exchange on relief about the developments in Iran. However, any sell-off was limited by concerns about lower gas inventories.

Micron beats expectations

2007-04-06T00:54:10Z

Kerkorian EYES Chrysler

2007-04-06T00:53:04Z

Daily Market Brief for April 04, 2007

2007-04-04T22:55:42Z

Stocks rose slightly after a raft of economic reports - on the service-sector, employment and factory orders - came in weaker than expected and tempered an earlier boost from falling crude oil prices. Investors eyed lower oil prices and weaker than expected reports.

Today, the Dow Jones industrial average closed up 19.75 to 12,530.05, the broader S&P 500 closed up 1.60 to 1,439.37, and the Nasdaq closed up 8.36 or 0.34% to 2458.69.

Market breadth was positive. On the New York Stock Exchange, winners topped losers 17 to 14 on volume of 1.40 billion shares. On the Nasdaq, decliners topped advancers by a narrow margin of 15 to 14 on volume of 1.77 billion shares.

Investors welcomed developments in Iran and a drop in oil prices but held back amid a slew of weak reports on the economy. The market is certainly treading water after a strong day yesterday. Additionally, there is some nervousness about the first-quarter earnings reporting period, which gets rolling later in the month.

In economic news, factory orders rose 1% in February after falling a revised 5.7% in January. This is against the expected 1.9% rise. The Institute for Supply Management's service sector index fell to 52.4 in March from 54.3 in February. Economists thought it would rise to 54.7. Employers added 106,000 private sector jobs in March. The figure was short of expectations and raised concerns ahead of the more closely watched monthly report from the Labor Department, expected Friday.

Stock of Microsoft (Nasdaq: MSFT) closed up $0.63 to $28.50, after Citigroup raised its fiscal third-quarter earnings estimates for the company, reflecting what it said was the successful launch of Windows Vista and Office 2007.

Shares of Best Buy (NYSE: BBY) closed down $1.24 to $47.89, despite reporting higher quarterly earnings that topped estimates. It reported an 18.5% rise in fourth-quarter profit, helped by sales of flat-panel televisions, and announced that it plans to offer Apple computers in 200 stores this year. Net income for the fiscal fourth quarter ended March 3 rose to $763 million, from $644 million a year earlier. Revenue increased 21% to $12.9 billion, and same-store sales increased 5.9%.

Shares of Daimler Chrysler (NYSE: DCX) closed down $0.38 to $82.57, after the CEO confirmed that the company is talking with potential buyers about its money-losing Chrysler unit. However, he was not able to give details of discussions and said all options for the automaker are still on the table.

U.S. light crude oil for May delivery fell 26 cents to settle at $64.38 a barrel on the New York Mercantile Exchange after Iran's president pardoned and pledged to release the 15 British sailors and marines being held. The apparent resolution to the standoff provided some comfort to investors.

Best Buy falls despite doing better

2007-04-04T22:55:03Z

Chrysler for Sale

2007-04-04T22:54:11Z

Daily Market Brief for April 03, 2007

2007-04-04T03:12:14Z

Stocks rallied broadly lifting the Dow Jones Industrial Average by nearly 130 points to a five-week high, as investors cheered a drop in crude oil prices amid easing tensions between the UK and Iran, and with sentiment also lifted by a rise in pending homes sales in February. It is evident that if there is any good news on housing, the market is going to rally because sub-prime-driven volatility has been the big boogeyman for the market.

Today, the Dow Jones industrial average closed up 128.00 or 1.03% to 12,510.30, the broader S&P 500 closed up 13.22 or 0.93% to 1,437.77, and the Nasdaq closed up 28.07 or 1.16% to 2450.33.

Market breadth was positive. On the New York Stock Exchange, winners topped losers by around 3 to 1 on volume of 1.56 billion shares. On the Nasdaq, advancers beat decliners 19 to 9 on volume of 1.99 billion shares.

The February pending home sales index showed a surprise rise, versus economists' expectations for a decline. The Pending Home Sales Index, based on contracts signed in February, rose 0.7% to 109.3 from a downwardly revised level of 108.5 in January. Analysts polled ahead of the realtor report were expecting the index to come in at 108.2.

General Motors (NYSE: GM) reported that it's U.S. sales slipped 4% to 345,418, a bit worse than the forecast of a 1.3% decline. Toyota (NYSE: TM) saw its U.S. sales rise nearly 12% to hit a record 242,675 in the month. Honda (NYSE: HMC) saw sales rise 11% to also top forecasts of only modest gains, as did rival Japanese automaker Nissan (Nasdaq: NSANY). Korean automakers Hyundai and Kia posted narrow gains. Ford reported a 9% decline in sales to 264,975 vehicles.

Shares of Apple Inc. (Nasdaq: AAPL) advanced 1% on charges from the European Commission that major record companies, including Warner Music Group (NYSE: WMG), are forcing Apple to restrict access to music downloads on its iTunes online store by country. If found guilty, companies face a fine of up to 10% of annual global revenue.

Shares of Marshall & Llsley (NYSE: MI) closed up $3.97 to $49.83, on reports that it is set to spin off its payment processing unit Metavante Corp. Additionally, private equity firm Warburg Pincus is expected to buy a stake in the spin-off valued at about $4 billion.

U.S. light crude oil for May delivery fell 2% on the New York Mercantile Exchange after Britain and Iran said diplomacy could end the conflict over 15 British naval personnel held in the Gulf.

Daily Market Brief for April 02, 2007

2007-04-03T04:42:10Z

Stocks closed slightly higher as a raft of deals, including a $29 billion leveraged buyout of First Data Corp. (NYSE: FDC), weighed against a weak manufacturing report and high oil prices. While the news of mergers and other equity deals indicated that there's still a lot of money out there, the ISN numbers were a disappointment.

Today, the Dow Jones industrial average closed up 27.95 or 0.23% to 12,382.30, the broader S&P 500 closed up 3.69 or 0.26% to 1,424.55, and the Nasdaq composite ended little changed closing up 0.62 or 0.03% to 2422.26.

Market breadth was mixed. On the New York Stock Exchange, winners topped losers 5 to 3 on volume of 1.5 billion shares. On the Nasdaq, decliners and advancers were roughly even on volume of 1.76 billion shares.

The new quarter started off on a quiet note, as investors welcomed the day's deals news, but held back a bit at the start of a big week for economic reports. The Institute for Supply Management's manufacturing index fell to 50.9 in March from 52.3 in the previous month, just short of forecasts for a drop to 51.1. The prices paid index, which measures inflationary pressures in the sector, climbed to 65.5 in March from 59.0 in February. New orders, a gauge of future growth, eased to 51.6 from 54.9, while the employment index fell to 48.7 from 51.1. A slowing economy paired with higher inflation, as the ISM report seemed to indicate, would be particularly troublesome for the Federal Reserve to manage and for stock investors to handle.

Stock of First Data Corp. (NYSE: FDC) closed up $5.55 or 20.6% to $32.45, after agreeing to be bought for $429 billion in cash by private equity firm Kohlberg Kravis Roberts & Co. However, it also said it plans to actively seek other bids. This is the latest in a string of high-profile leveraged buyouts of established U.S. corporations in an era of easily accessible financing. Under the agreement, First Data shareholders would be paid $34 each share of the company they own, a 26% premium to where the shares closed on March 30.

Shares of Tribune (NYSE: TRB) closed up $0.70 to $32.81, after Sam Zell won the bidding war in a deal worth $13 billion, or $34 a share. Tribune also announced it would sell the Chicago Cubs baseball team after the 2007 baseball season ends in a move to relieve some of its debt.

Shares of Global Imaging Systems closed up $9.14 or 47% to $28.64, after Xerox (NYSE: XRX) said it is buying it for $1.5 billion in cash. Shares of Xerox closed up $0.19 or 1% to $17.08. This places the deal at $29 per share. This gives Xerox access to their extensive customer base.

Shares of Apple (Nasdaq: AAPL) closed up $0.74 to $93.65, after the EMI Group struck a deal with iTunes to sell its music catalog without anti-piracy protection, known as DRM restrictions. EMI, which owns the Beatles catalog, said that music from the Beatles is not part of the deal with Apple.

Stock of Merck (NYSE: MRK) closed up $0.84 to $45.01, on news that the FDA has granted approval for its diabetes treating pill, Janumet. This combines two diabetes medicines into a single pill, ad pairs Januvia with a widely used, older generic medicine called metformin.

Shares of New Century Financial (NYSE: NEW) closed down $0.15 or 15% to $0.92, after it fled for bankruptcy protection. This is the largest U.S. independent provider of home loans to people with poor credit histories before collapsing amid rising subprime delinquencies and defaults started rising. New Century Financial Corp. will immediately cut 3,200 jobs, as part of its Chapter 11 bankruptcy reorganization. Additionally, it has agreed to sell its servicing assets and platform to Carrington Capital Management LLC for $139 million, subject to bankruptcy approval.

U.S. light crude oil for May delivery rose 7 cents to settle at $65.94 a barrel on the New York Mercantile Exchange, giving back bigger gains.

Daily Market Brief for March 30, 2007

2007-03-31T03:38:51Z

Stocks finished a volatile session on a mixed note mirroring a likewise volatile and mixed performance for the first quarter, with the Dow Jones Industrial Average now in negative territory for the year so far, while other stock proxies hold on to meager gains. The market initially took a sharp downturn after news that the U.S. has imposed trade sanctions on China and as tensions over a stand-off between Iran and the UK kept oil prices near $66 a barrel.

Today, the Dow Jones industrial average closed up 5.60 or 0.05% to 12,354.35, the broader S&P 500 closed down 1.67 or 0.12% to 1,420.86, and the Nasdaq composite closed up 3.76 or 0.16% to 2421.64. For the week, the Dow lost 1%, the S&P lost 1%, and the Nasdaq lost 1.1%. For the month, the Dow gained 0.7%, the S&P 500 gained 1% and the Nasdaq composite added 0.2%. For the quarter, the Dow lost 0.9%, the S&P 500 gained 0.2% and the Nasdaq composite gained 0.3%.

Market breadth was positive. On the New York Stock Exchange, winners topped losers 9 to 7 on volume of 1.58 billion shares. On the Nasdaq, advancers beat decliners 4 to 3 on volume of 2.06 billion shares.

Stocks rose following a series of strong readings on personal income and spending, manufacturing and construction. However, news that the U.S. Commerce Department is reversing a decades-old policy and will begin to impose tariffs on some goods from China, became a damper.

Both consumer spending and personal income rose faster than expected in February, showing that the economy was stronger than Wall Street forecasts. However, there also was an inflation reading that was higher than hoped. Spending was up 0.6%, compared to the 0.5% rise in January. Economists had been looking for growth to slow to a 0.3%. Income was also up 0.6%, compared to the 1% rise in January. Economists had been looking for slowdown in income growth to a 0.3%.

Stock of Dendreon (Nasdaq: DNDN) closed up $7.71 or 150% to $12.93, after a FDA panel said that its treatment for advanced prostate cancer is reasonably safe and effective. Its novel cancer therapy Provenge is a therapeutic cancer vaccine designed to stimulate the immune system to fight an existing cancer. It differs from traditional vaccines meant to prevent disease in people not yet sick. The FDA is scheduled to decide by May 15 whether to approve Provenge for sale.

Shares of PMC Sierra (Nasdaq: PNCS) closed up $0.71 or 11% to $7.01, after the chipmaker said that it was closing two R&D centers in Canada and cutting jobs as part of a restructuring effort. The company also said that first-quarter revenue will be in the middle to high end of its previous forecast.

Shares of Dell (NYSE: DELL) closed down $0.18 to $23.21, after it said that an internal audit of its accounting showed errors in its financial controls, which could result in restatements of past quarters. This means that Dell would not file its annual report with securities regulators by the April 3 due date, or by an extension date of April 18.

U.S. light crude oil for May delivery fell 16 cents to settle at $65.87 a barrel in New York Mercantile Exchange trading after having risen in the morning. Prices have been on the rise recently amid worries about the conflict with Iran.

Daily Market Brief for March 29, 2007

2007-03-30T03:46:50Z

Stocks threw off losses to close higher. They were bolstered by news of an unexpected upward revision to fourth-quarter growth as investors looked past a rise in crude oil prices above $66 a barrel. It is evident that the process of rallies and pull-backs would continue for some months.

Today, the Dow Jones industrial average closed up 48.39 or 0.37% to 12,348.75, the broader S&P 500 closed up 5.30 or 0.39% to 1,422.53, and the Nasdaq composite closed down 0.78 or 0.03% to 2417.88.

Market breadth was positive. On the New York Stock Exchange, winners beat losers 5 to 3 on volume of 1.509 billion shares. On the Nasdaq, advancers topped decliners by a narrow margin on volume of 1.943 billion shares.

The final read on fourth quarter GDP indicated moderately strong U.S. economic growth than previously thought, primarily because businesses added more to inventories than was estimated a month ago. GDP rose at a 2.5% annual rate instead of 2.2%. There was also a drop in the number of Americans filing new claims for unemployment last week. The number of U.S. workers filing new claims for jobless benefits dropped to a seasonally adjusted 308,000 from an upwardly revised 318,000 the prior week. Analysts were expecting claims to edge up to 320,000.

Stock of Boeing Co. (NYSE: BA) gained 0.4% after Colombia's largest airline, Avianca SA, said it would buy 10 of Boeing's 787 Dreamliner aircraft. Avianca SA will spend $1.5 billion to replace its aging aircraft. The company also plans to buy another 35 airplanes with an additional investment ranging from $1.2 billion to $1.5 billion.

Sprint Nextel Corp. (NYSE: S) was shut out of the first part of a two-part federal contract that could reach $48 billion over 10 years. However, Sprint could win a share of the U.S. government's upgrade when the second part of the contract is issued in May.

Shares of U.S. Steel (NYSE: X) closed up $3.61 or 3.4% to $101.22, on news that it is buying Lone Star Technologies (NYSE: LSS) in a deal worth $2.1 billion in cash. Stock of Lone Star Technologies closed up $17.66 or 37% to $66.11. U.S. Steel will pay $67.50 a share, a 39% premium to Wednesday's closing price.

U.S. light crude oil for May delivery rose $1.95 to settle at $66.03 a barrel on the New York Mercantile Exchange, a gain of 3%. Prices have been on the rise recently amid worries about the conflict with Iran.

Daily Market Brief for March 28, 2007

2007-03-29T01:50:43Z

Stocks pared losses but still ended lower after the chairman of the Federal Reserve reiterated concerns about inflation and disappointed investors hoping that weaker growth would soon push the Fed closer to cutting interest rates. Federal Reserve Chair Ben Bernanke said the U.S. economic outlook has become more uncertain in recent weeks, reviving recession worries.

Today, the Dow Jones industrial average closed down 96.93 or 0.78% to 12,300.36, the broader S&P 500 closed down 11.38 or 0.80% to 1,417.23, and the Nasdaq composite closed down 20.33 or 0.83% to 2417.10.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by 21 to 11 on volume of 1.522 billion shares. On the Nasdaq, decliners topped advancers 19 to 9 on volume of 1.905 billion shares.

Bernanke's address for the Joint Economic Committee of Congress. stated that core inflation remains uncomfortably high. The Fed chief said that while inflation was still likely to moderate over time, the risks remained to the upside. He also said that the near-term outlook for the housing market is uncertain, and that the impact from the sub-prime mortgage fallout has raised more questions. The bottom line is that he expects moderate economic growth to be sustained, but there definitely is a sense that the downside risks to that forecast are growing and the likelihood of an upside surprise is shrinking.

Tomorrow, the fourth-quarter reading on the gross domestic product growth, is expected at a 2.2%. February durable goods orders rose 2.5% versus a 9.3% decline in January, missing expectations.

Shares of Beazer (NYSE: BZH) fell 8.4% after it sated that it is the target of a federal criminal probe into its role in arranging mortgage loans for buyers in its subdivisions. Beazer said the U.S. Attorney hasn't alleged any wrongdoing, but just asked for documents.

Stock of Wal-Mart Stores (NYSE: WMT) dropped 1.9% after news it has shelved its plan to open a New York City store, The New York Times reported, citing a meeting CEO Lee Scott had with editors and reporters of the newspaper.

Shares of Circuit City (NYSE: CC) closed up $0.35 to $19.23, after stating that it will consider the sale of its Canadian unit InterTAN and will lay off 3,400 employees and replace them with lower paid workers as part of a broader restructuring.

Oil prices trimmed some gains after the release of the weekly oil inventories report, but still settled above $64 a barrel on the New York Mercantile Exchange. Prices have been on the rise amid worries about the conflict with Iran, the No. 4 oil exporter.

Daily Market Brief for March 26, 2007

2007-03-28T01:32:09Z

Stocks closed lower as concerns about the stumbling housing market and the economy resurfaced after an uncertain outlook from homebuilder Lennar Corp (NYSE: LEN) showed widespread drops in home prices. The weak profit report revived worries about the housing sector and a big drop in consumer confidence fed concerns about the broader economy.

Today, the Dow Jones industrial average closed down 71.78 or 0.58% to 12,397.29, the broader S&P 500 closed down 8.89 or 0.62% to 1,428.61, and the Nasdaq closed down 18.20 or 0.74% to 2,437.43.

Market breadth was negative. On the New York Stock Exchange, decliners topped advancers 11 to 5 on volume of 1.382 billion shares. On the Nasdaq, losers beat advancers 19 to 9 on volume of 1.73 billion shares.

The March Consumer Confidence report added to the spate of weak economic inputs. The index fell to 107.2 from a downwardly revised 111.2 in February. Economists shad thought that it would fall to 109 in the month. The week will see reports on durable goods orders, the last revision to fourth-quarter GDP, personal income and spending, Chicago PMI, construction spending and University of Michigan consumer sentiment. Additionally, Federal Reserve Chairman Ben Bernanke's testimony to Congress on Wednesday is also awaited. He is expected to clarify whether the central bank has leaned closer to cutting interest rates, should the economy weaken too much.

Stock of Lennar (NYSE: LEN) closed up $0.03 to $44.57, despite reporting a big drop in quarterly profit and withdrew its 2007 forecast due to housing weakness and uncertainty over the sub-prime mortgage mess. Its profit fell 73% in the latest quarter, and the net income sank to $68.6 million. Revenue dived 14% to $2.8 billion. Last year, the company had posted net income of $258.1 million, on revenue of $3.2 billion.

Stock of Bristol-Myers Squibb (NYSE: BMY) rose 0.6% after a report that Sanofi-Aventis (NYSE: SNY) is considering making a bid for its partner on the Plavix blood-thinning drug. It is reported that Sanofi's chairman and chief executive are split on whether a bid should be launched, but the pro-deal chairman is reported to have greater sway on the board.

Shares of DaimlerChrysler (NYSE: DCX) rose 1.8%, after the company said it was pushing back its first-quarter results release date to May 15 from April 26, blaming the delay on the time needed to switch to IFRS accounting from U.S. GAAP accounting. It is also reported that the possible sale of Chrysler could occur within just a few weeks time, with the first bids due by week's end.

Stock of biotech Nuvelo (Nasdaq: NUVO) closed up $0.76 or 305 to $3.85, after the company's experimental colon cancer drug received "fast-track" status from regulators. The process can speed up the review of drug marketing applications.

U.S. light crude oil for May delivery rose 14 cents to $63.05 a barrel on the New York Mercantile Exchange after hitting a high for 2007 Monday on heightened geopolitical fears.

Daily Market Brief for March 26, 2007

2007-03-26T23:04:53Z

Stocks reduced their losses to close mixed after investors took heart from the close of crude futures below $63 a barrel and some positive brokerage talk about technology bellwethers like eBay Inc. (Nasdaq: EBAY) and Dell Inc (NYSE: DELL). Earlier in the session, stocks dropped sharply after news that sales of new homes unexpectedly fell to a 7 year low in February, fueling concerns that the stumbling housing market might derail economic growth. However, gains in technology and commodities offset the impact of the weak read on new home sales.

Today, the Dow Jones industrial average closed down 11.94 or 0.10% to 12,469.07, the broader S&P 500 closed up 1.39 or 0.10% to 1,437.50, and the Nasdaq closed up 6.70 or 0.27% to 2,455.63.

Market breadth was negative. On the New York Stock Exchange, losers edged winners by a narrow margin of 16 to 15 on volume of 1.468 billion shares. On the Nasdaq, decliners topped advancers 16 to 13 on volume of 1.764 billion shares.

The housing market report, showed that new home sales in February eased to the slowest pace in more than six years. The government's latest reading on the real estate market showed the glut of homes on the market reached a 16-year high. New homes sales were down about 4% from the 882,000 rate in January. The pace of sales tumbled 18.3% from February 2006. This shows that the housing market has not yet hit bottom.

Stock of Citigroup (NYSE: C) closed down $0.18 to $51.54, after reporting that it is looking to cut 15,000 jobs, as part of a broader restructuring plan that could cost the bank $1 billion. This cut would represent about a 5% reduction in Citigroup's worldwide work force of 327,000. Some of the reduction could be achieved by not filling positions opened through normal attrition.

Shares of Intel (Nasdaq: INTC) closed up $0.02 to $19.29, on news that it will invest $2.5 billion to build a chip plant in China, with the production of chipsets to begin in 2010. Groundbreaking is scheduled for July in Dalian, which will be Intel's first semiconductor plant in Asia. The 12-inch wafer plant will have a monthly capacity of 52,000 wafers and will use 90-nanometer technology to produce chip sets.

U.S. light crude oil for May delivery added 63 cents to $62.91 a barrel on the New York Mercantile Exchange after the U.N. tightened sanctions against Iran amid ongoing worries about the nation's nuclear program, and its capture last week of British military personnel.

Citigroup to cut jobs

2007-03-26T23:04:20Z