Russell dips on uncertainty
The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are declining as news of the assassination of former Pakistani Prime Minister Benazir Bhutto and weak durable-goods data spooks the markets. Negative news overshadowed U.S. consumer confidence, which rose unexpectedly in December.
At 11:10 a.m. ET, the small-cap index was down 12.69 points, or 1.59%, to 784.34. The Dow was down 124.53 points, or 0.92%, to 13,427.16.
The slip in stocks followed on the heels of reports that Pakistani opposition leader Bhutto was assassinated in a suicide bombing while attending a political rally. Crude-oil futures rose on news of Bhutto’s murder, as energy traders are nervous about volatility in the Middle East.
Crude-oil futures are trading about $96 a barrel in morning trading. Energy traders are also anticipating the release of weekly data that are expected to show a decline in U.S. crude inventory.
The Labor Department reported this morning reported that initial jobless claims for the week ended Dec. 22 increased by 349,000, compared with an increase of 346,000 the previous week.
Durable goods orders for the month of November edged up a less-than-forecasted 0.1% from October’s 0.4% decline. Economists were forecasting an increase of 2.5%.
The Mortgage Bankers Association released its weekly Mortgage Applications Survey — a survey that tracks mortgage applications volume for new homes purchased and for mortgage refinancing activity — for the week ending Dec 21. Mortgage applications slid to 603.8 from last week’s 653.8.
In corporate news, Goldman Sachs issued a note late Wednesday speculating that financial juggernaut Citigroup Inc. (NYSE: C) might have to slash its dividend by 40% in light of now greater-than-forecasted write-downs for bad bets on collateralized debt obligations. Goldman is now projecting write-downs in the neighborhood of $18.7 billion, up from the investment bank’s previous estimate of $11 billion.
In related news surrounding the unfolding of the credit crisis, Fitch Ratings put 205 residential mortgage-backed securities backed by bond insurers, including MBIA and Ambac Financial Group, on review for a downgrade.
The Conference Board's index of confidence increased to 88.6, the first gain in five months, from a revised 87.8 the prior month. November's number was the lowest in two years.
Biggest percentage gainers:
• Document Sciences Corp. (DOCX), up 75.8% to $14.48 on news that EMC Corp. will buy the company for about $85 million.
• American Dental Partners, Inc. (ADPI), up 68.5% to $9.30 on news that it settled a lawsuit with PDG, a Minnesota-based doctor group.
• Community National Bank of Lakeway Area (CNLA), up 26.8% to $8.80.
Biggest percentage losers:
• DWS Global Commodities Stock Fund, Inc. (GCS) down 18.5% to $17.33.
• ShengdaTech, Inc. (SDTH), down 13.8% to $11.95.
• China Technology Development Group Corp. (CTDC) down 11.9% to $8.72.
