Today's Decline, Some Comments About the Drop

Today's drop marks the fourth decline over 2% or more this year, and as most of us know there is not usually any one culprit responsible.  Many commentators have blamed AIG's poor earnings report as the catalyst (AIG's Results Reawaken Investors' Financial Fears, WSJ: 2/29) .  While that stock is down $3.40 today, we note that S&P 500 futures were only down about 12 points this morning.  Perhaps the most important news of the day was a CNBC headline discussing a possible "snag" in the proposed Ambac bailout.  On 2/25 the Dow gained 1.5% after the announcement, and today nullified those gains returning to the 2/21 closing level. 

In short, a successful bailout would incite a healthy rally, but we remain cautious because headline risk remains.

Perhaps the biggest story of the day was a posting on ComScore's blog explaining recent data about Google's web ads.  UBS said in a note on 2/26 that paid search data was negative, the analyst also lowered his price target.  GOOG opened down over $20 on the news declining from $507 to $464 in two days.  Based on today's post we would deduct that the original data was mis-interpreted and that the selling was overdone, but then again we don't make stock recommendations either.

Comments

[Jagadeesh]

Nice Article, I think this month we are heading towards a great fall.

~Jagadeesh
http://nseonlinetrading.blogspot.com/

[Shyam Advisory]

Another great post! There are some really great tips in that article, many I can and should use and I know I would reap some really fantastic benefits.. I'm going to share with my friends and family too.