The market mostly went down for the day. Downgrades in financials and weakness in the housing sector lead the decrease in the beginning of the day. Oil was up with railroads, autos, and airlines down. Utilities were up on the down market. Gold was getting crushed in the pre-market and as long as you stayed away from the South African miners, you could have done well shorting the miners. It felt like there was little moving the market later in the day. There was little news or releases (except Factory orders). The trends that developed in the beginning of the day were pretty much the trends that drove the market the rest of the day.
Microsoft May Borrow for First Time to Buy Yahoo
Yahoo May Seek Pact With Google to Fend Off Microsoft
I can't help but think the Microsoft bid for Yahoo is an awful idea. As a disclosure, I was a former long-term shareholder of Microsoft (by gift and I think I only made $3/share). Microsoft makes the vast majority of its profit on software and operating systems. Their web business doesn't generate nearly the revenues that other lines of businesses either can generate or are generating. Not only that, but they are bidding up Yahoo to such a high level, beyond any reasonable valuation, that they will likely lose money on it. Microsoft has an incredibly long time horizon and they might have thought that with the lower interest rates it would be worth it. However, I don't see anywhere for rates to go, but down. They could have waited several more months and probably could have saved a lot of money on the interest on the debt. This deal will only benefit Yahoo shareholders, Microsoft shareholders are getting hosed like Time Warner by AOL.
Fed Says U.S. Banks Are Tightening Lending Standards
I consider this good news for economy in general, but it could lead to short-term slowdown (not that there's anything wrong with that).
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