Dow -227.49 (-1.77%)
Nasdaq -43.99 (-1.77%)
S&P 500 -22.69 (-1.61%)
News That Moved the Market
Minutes Crush Market. Stocks lost significant ground for the second day in a row, after the FOMC minutes revealed more inflation and unemployment anxiety, and signs that the Fed is done bailing out this market. The Fed expects unemployment to increase "significantly," upping its projections in 2008 from 5.25% to 5.6%. Many of the Fed members forecasted negative GDP in the first half of 2008. Still, the decision to cut by a quarter-point was a "close call" to many officials, making the chances of further cuts unlikely. These pieces of data combined with higher core-inflation forecasts painted a bleaker picture than many had anticipated. Oil put downward pressure on the market as well, spiking $4.27 to $133.25/barrel. Prices jumped on news that stockpiles had unexpectedly decreased. The market will be tested for the rest of the week, and with no major news expected to reverse the negative sentiment of the last few days, expect the S&P to test the 1370 level very soon.
American Airlines Slashes Capacity. American Airlines (AMR, -25.00%) announced plans to cut thousands of employees and decrease capacity in a bold move to combat backbreaking oil prices. The airline will also charge a $15 fee to check in one bag. The strategic action comes at a time when many analysts are wondering if it is possible for most airlines to turn a profit with energy prices this high.
Quick Tics: Time Warner (TWX, +0.6%) will spin-off its cable-television unit and receive a $9.25 billion one-time cash dividend in the transaction...Gold ended up $8.40 near $929/ounce, and has now gained more than 7% in the last week.
8:30 AM: Jobless Claims