Wednesday, October 15, 2008

Stocks Slide On Weak Retail Sales Report

Stocks are sharply lower in early trading on the heels of some weak economic data. The September retail sales report showed a decline of -1.2% (vs. -0.7% consensus), as consumers reigned in purchases amid the economic turmoil.

The NY Manufacturing Index plunged in October, hitting -24.6 (vs. -10.0 consensus). And the latest PPI report showed inflation fell -0.4% last month, helped by easing commodity prices.

Commodity prices are lower again this morning, aided by a bounce in the dollar, but also on concerns that demand growth in China is slowing further. Oil is trading down to $75, its lowest level since August 2007.

Credit market angst is easing a bit more today, with dollar libor rates (the rates that banks charge each other for short-term loans) falling modestly. But T-bill rates are also lower, as investors continue to look for the safest securities to own.

The 10-year yield is higher at 4.07%. And the VIX is up +10.6% currently near 61.

There were a handful of companies that reported earnings in the last 24 hours that were better than expected, and their stocks are bucking today's weakness. These include: JPMoran (JPM), Schwab (SCHW), Coke (KO), Intel (INTC), Abbot Labs (ABT), and Hudson City Bancorp (HCBK). Apple (AAPL) is also higher after introducing a refreshed Mac lineup yesterday.

long AAPL, VIX puts


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