Market Summary: Mon. April 14, 2008

The thesis that has been working for the last year – long agriculture and energy, short financials – was working today. Oil closed at a new all-time high and all of the agriculture and energy names were up big, while much of the weakness in the financials was due to Wachovia’s poor earnings report. The oil services names, such as Hess, Transocean, Halliburton, and Slumberger, were all hitting new 52-week highs.

Wachovia reported a $393M loss last quarter, and announced it will cut its dividend by 41%, issue $7B worth of new stock and convertible bonds, and cut 500 investment banking jobs. For the same period last year, Wachovia reported a $2.3B profit (Source: Bloomberg.com, CNBC.com). Just last quarter, the company’s CEO said there would be no need to cut the dividend, but it looks as if he was wrong just like most of the other Walk Street CEOs. The stock was down 8% on the day.

The agriculture names were strong today thanks to a report from OAO Uralkali (Russian fertilizer producer) that said potash prices will be above $1000 per metric ton this year. Names like Agrium, Potash, and Mosaic were all up nicely. Agrium and Potash also got another boost after UBS upgraded the stocks’ prices targets due to higher fertilizer prices (Source: Bloomberg.com).

In a surprise move, Blockbuster offered $1.35B to buy troubled-retailer Circuit City. Both companies have been struggling mightily the last few years and most investors are confused about why these two companies are teaming up together. Carl Ichan, the billionaire activist investor, will be supporting the finances for this deal - Ichan is a Blockbuster shareholder (Source: Bloomberg.com).

In economic news, March retail sales rose 0.2%, compared with a 0.4% decline in February. Something to note, though, was that increased gasoline sales were the main cause for an increase in retail sales last month (Source: Bloomberg.com).

Tuesday, Wednesday, and Thursday are extremely busy days with earnings reports and the Fed policy announcement (Wed.). There are continued talks between Northwest and Delta that could create the largest domestic carrier. Rumors are circulating that a deal could be in place as early as tomorrow.

DJIA 12,302.26 -23.36 (-0.19%)
Nasdaq 2,275.82 -14.42 (-0.63%)
S&P 500 1,328.32 -4.51 (-0.34%)
NYSE Volume 3,553,981,000

2-Yr Bond 1.78% +0.02
10-Yr Bond 3.53% +0.04
30-Yr Bond 4.35% +0.05

Dollar Index 71.875 +0.067
Crude Oil (May) 111.76 +1.62
Nat Gas (May) 10.053 +0.152
Gold (June) 928.70 +1.70