News That Moved Tuesday's Market

U.S. Markets

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News That Moved the Market

Market Stumbles On More News Supporting Recession Fears. Major indices opened lower after a weak earnings report from Alcoa (AA, -0.7%) and an announcement from AMD (AMD, -4.9%) saying it would slash its revenue outlook were released late Monday. The news did not get better Tuesday, with the FOMC Fed minutes showing Fed members thought economic contraction was now "likely." Though this could not have been a shock to investors, the Fed's decreasing confidence in the U.S. economy has become apparent to everyone over the last two weeks. The International Monetary Fund also said that the total losses caused by the disorder in the financial and credit markets could be as much as $945 billion, much greater than the current writedown sum of $232 billion. Stocks hit their lows in early afternoon trading, but a small run-up at the end of the day kept the losses modest.

WaMu Pays Price for Cash Injection. Washington Mutual (WM, -9.8%) will receive a $7 billion cash injection from a group of investors led by private equity firm TPG. While investors liked the news yesterday, once the details were laid out, enthusiasm faded. The savings and loan bank will sell 176 million shares at a 33% discount of Monday's closing price, making the deal price $8.75/share, and sell convertible preferred shares. The deal is extremely dilutive for outstanding WaMu shares. The company also announced it will slash its quarterly dividend down to $0.01/share from $0.15/share, and will stop making loans through mortgage brokers and close 186 home-lending offices.

Quick Tics: Pending home sales fell 1.9% from last month, worse than the 1.0% drop expected…Apple (AAPL, -2.0%) was downgraded to "market underperform" from "market perform" by Morgan Keegan.

Tomorrow

Notable Earnings (Full List Here):
Bed Bath & Beyond Inc.(BBBY) Time Not Supplied
Circuit City Stores Inc. (CC) Time Not Supplied

Economic Events:
10:00 AM: Wholesale Inventories
10:30 AM: Crude Inventories