Insights

Market Wrap – Day of the Walking Dead

On a day that the S&P had to fight to keep holding onto its recently gained 1,000 level, five of the top seven stocks on top of the RakedIn Top Gainers Board jumped 20 to 83% percent today and these four ‘walking dead’ had at one point all traded in the stock graveyard below $1.

Radian Group, Inc. (NYSE: RDN) sells “Credit Risk Management Services” which basically means it is an insurance company that was waist deep in the derivatives mess and traded as low as $0.70 last July, reported earnings and today was up over 83% (+$3.05, $6.72) and has returned 860% from its trading low in the last 12 months.  Zombie left for dead stock number two on today’s top percentage gainers list is good ole’ AIG (NYSE: AIG) which was up 63% today (+$8.48, $22.00), not forgetting their reverse 1-for-20 split we see that AIG traded as low as $0.33 and has returned 233% since its low on March 9, 2009.  AIG gets a new CEO so add this in with some short covering and viola! 63%!  The newest Zombie, CIT Group Inc. (NYSE: CIT) was up 38% today (+$0.38, $1.39) and has returned 348% since trading its low less than a month ago on July 16, 2009.  This rise was on no particular news today so maybe the other Zombies dug them up.  To continue the ‘no way, that stock is up?’ list we go to Fannie Mae, yes, Fannie Mae (NYSE: FNM).  This stock is the original Zombie and was up 30% today on news their housing regulator was stepping down (+$0.17, $0.74) and adding this news to all the rest of the great news on this gem of a stock has it up only 146% from its trading low on November 21, 2008.  These were the top four stocks and now we have to jump all the way to number 7 (skipping GRMN +24% and CBL +20%) to get to MGIC Investment Corporation (NYSE: MTG) which added a tiny 20% (+$1.24, $8.57) today on news they are delaying an investment into a subsidiary.  MTG is up a whopping 1,124% since trading $0.70 on March 12, 2009.  The King of the Zombies!

Even more shocking is that these Zombies all jumped up on a day the market was down with the Dow losing 38.22 points (-0.42%, 9280.97) and the S&P 500 traded below the 1,000 level but regained it to close down 2.93 (-0.29%, 1002.72) while the Nasdaq 100 dropped 17.31 points (-1.05%, 1614.44).

As this must be either Bizarro world or the Twilight Zone, looking across other performing stocks we see that Genworth Financial (NYSE: GNW +10.79%), Bank of America (NYSE: BAC +6.52%), American Express (NYSE: AXP +5.74%) and Citigroup (NYSE: C +10.15%) all had strong days.  Ok, now all you have to do is tell me Apple Inc. (NSDQ: AAPL) was down today and this must be a chemically induced illusion.  Apple closed down 44 cents at $165.11.

Before even looking for the top sector my money is on finance.  Leading the sector race was, surprise, finance up 2.25% on a day when no other sector was positive.  Consumer non-cyclicals led the losers dropping 1.24% with energy coming in a close second losing 1.12%.

New York Spot Gold traded as high as $969.70 today but was trading down $3.10 at 4:32 p.m. est at $964.60.  NYMEX WTI Oil added 52 cents to trade at $71.79.

To put my last two cents in on the Cash-for-Clunkers fiasco, has anyone considered the amount of power or the carbon footprint it takes to manufacture an automobile?  I am talking about the energy to mine the iron ore, transport, smelt, manufacture, build the factories, etc… All the inputs it takes to build a car.  I found a site online that says the material inputs for a car costs approximately 10% of all the oil a car will burn in its lifetime.  This 10% does not even include the carbon footprint to build the plant to build the car and the gaseous releases of the auto workers while helping build that car (hey, if it’s good enough for cows, it works for humans too).  Throw all this in with the fact that 17 mpg cars are being swapped for 21 mpg cars (in some cases) and this is a big loser of a program as if they didn’t even build that second car we could all be better off environmentally and less of our tax dollars would be wasted.  While 17 for 21 might be the worst case scenario, if there are other valid reasons to debate this program and if it just plain does not save us anything on the environmental front it is a useless program unless you want to admit it is flat out welfare for the auto industry.  Think about it.

If we are going to proclaim this Cash-for-Clunkers a victory then I would like to propose Dollars-for-DELL’s, Bucks-for-Beer, Greenbacks-for-Golfing, Mint-for-Magazines, Paychecks-for-Politicians (oops we already have that one), etc…

WASTE OF TAXPAYER DOLLARS!  Get the idea yet?

Tomorrow we have Jobless Claims before the open and we are expecting another 575,000 people to have lost their jobs.