Market Summary: Thurs. Feb. 14, 2008 (Updated 02.18.08)

Today Ben Bernanke stole the show and what he said caused the markets to sell off. If you remember his last "interim" statement, he used the word "substantive." There was a sense of urgency then to lower rates because things looked like they were spiraling out of control. In today's message there was no sense of urgency to lower rates. Once again he said inflation concerns could prevent them from aggressively lowering rates, and this caused investors to sell, sell, sell.

He did hint that the Fed is ready to lower rates at their next meeting given the slowing economy. He said the Fed "will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks." This is pretty much standard language for "we'll cut rates if the economy is still slow/slowing." He also noted that the Fed lowered their projections for economic growth in 2008 -- the first two quarters will be slow (not contracting) and things are expected to pick up the second half of the year.

He stated that "more-expensive and less-available credit seems likely to continue to be a source of restraint on economic growth" and that the "outlook for the economy has worsened in recent months, and the downside risks to growth have increased." Here's the Bloomberg.com article summarizing Bernanke's comments.

Moody's (the rating agency) downgraded FGIC to AA (from AAA). MBIA and Ambac both rallied because Moody's said that they are better positioned in terms of capital and no government bail out will be necessary. Here is an article describing the situation. CNBC discussed the idea of more write-downs if the bond/mortgage insurers continue to get downgraded. This new dragged on all the financial stocks.

Intel was down big today, as was tech, because Goldman Sachs removed Intel from its "conviction buy" list. The stock was down 3% on the day. Comcast beat analysts' estimates, announced a $6.9B buyback plan and a quarterly dividend - this caused the stock be be up big on the day.

UBS (a Swiss bank) was down big after they reported a quarterly loss of $13.7B because of huge write-downs. The stock was also downgraded to "hold." Here's an article describing UBS's financial situation and the causes of all their problems.

Liz Claiborne (higher-end women's retailer) gave a sub-par outlook for their 4th quarter and most retailers were down on this news.

After the bell, Chipotle reported somewhat disappointing earnings (only 25% growth) and the stock was getting crushed. CMG is a high-growth, high-multiple stock so when they disappoint investors, the stock gets crushed.