Here’s tonight’s ABC NEWS Evening Editorial Note……….
BEAR MARKET-As David Muir said on WORLD NEWS, "the stock market had been flirting with it all week…a new bear market low. And today, that’s right where the market landed." The Dow lost 89.68, or 1.2 percent, to end at 7,465.95. That’s its’ lowest point since this economic crisis began. Not very comforting since Muir reminds "it all comes right after the Obama Administration unveiled its plan to fix the economy". The market’s inability to rally signals that investors see no immediate end for the recession, which is already 14 months old and one of the most severe in decades. And that Obama plan? Economist Alan Skrainka is quoted in Muir’s WORLD NEWS piece as saying "investors are not convinced that these programs are going to work, that they’re going to be enough." Muir says that a lot of investor focus is on banks and the so-called "stress tests" the Obama Administration will administer and that "many economists believe investors are worried about what the Treasury will find". Which may explain the continued hammering of bank stocks today-for example, Bank of America closed at 3.93 a share. You could have had the stock for $42 a year ago(and I hope you didn’t).
BTW, Dan Arnall says this new low we’ve reached could spur "technical selling" tomorrow. Nope…me neither so I asked Arnall what "technical selling" is. Arnall: " Technicians are people who make trades based on the indices going above or below certain levels. Typically, when we go lower than a previous cycle low, a lot of technicians will have sell orders the next morning."
ECONOMIC TWO-FER/WHOLESALE PRICES UP IN JANUARY-Well this is a surprise. Wholesale prices shot up 0.8% in January, about four times what economists had predicted. You might be asking yourself why? Matt Jaffe says to look no further than energy. Jaffe: " Energy goods shot up 3.7% in January, after falling for the past six months, including drops of 9.1% in December, 12.4% in November, and 12.8% in October. A key factor in rising energy prices is gas prices, which went up 15%, the biggest increase in the last 14 months. Gas prices had decreased 26% in December. Core prices – which exclude food and energy – rose 0.4% last month."
UNEMPLOYMENT BENEFITS-More bad news. I cribbed the following from our friends at Associated Press: "The Labor Department reported today that the number of people receiving regular unemployment benefits rose by 170,000 to 4.99 million for the week ending Feb. 7, marking the fourth straight week continuing claims have hit a record. The surge in joblessness has pushed those claims far above the 2.77 million people getting benefits a year ago. The number totals 6.54 million with the inclusion of an additional 1.5 million people who are getting extended benefits under a program passed by Congress last summer. And those numbers are sure to climb higher, based on the flood of newly laid-off workers seeking benefits. The government reported today that new jobless claims for last week totaled 627,000, the same level as the previous week but higher than economists expected. It also was near the recent high of 631,000 hit three weeks ago, which was the most new weekly claims since 1982 when the country was in another severe recession. The three straight weeks of seasonally adjusted claims above 600,000 also is the longest stretch in more than 26 years." I’m sure you get the point.
PRESIDENT OBAMA IN OTTAWA-President Obama went to Canada today, his first foreign trip as President. He met with Canadian Prime Minister Stephen Harper in Ottawa. Jake Tapper filing for WORLD NEWS, tells us "the two leaders focused on the economy, the war in Afghanistan and the environment….pledging cooperation on all three issues." Controversy? Nope…none here. But the Canadians have said they’re going to pull their troops out of Afghanistan? That’s got to be a sticking point, right? Maybe for you Jimmy Olsen, but Tapper reports that "the President said he did not press for additional Canadian troops but expressed appreciation for contributions already made." Alright, lovefest it is then.
COATESVILLE ARSONS-Finally a break in the Pennsylvania arson cases. Pierre Thomas broke the news earlier today and in a piece for ABCNEWS.COM written with Jack Date he writes "Police have arrested a suspect who they say admitted involvement in the setting of a devastating fire in Coatesville, PA, that left 15 houses in ruins, 50 people without homes and a community in perpetual fear. Authorities described Roger Barlow, 19, as ‘distraught’ because of recent personal issues, possibly a death in the family. Officials suspect that the young man is a ‘classic pyromaniac,’ or someone with an impulse to deliberately start fires." Thomas notes that "there may be other suspects involved" as well. For more, please see Thomas’ Dot.com piece at http://abcnews.go.com/TheLaw/FedCrimes/story?id=6913226&page=1
LOST AND FOUND: Texas billionaire R. Allen Stanford, accused in an $8-billion bank fraud, has been found in the Washington DC area. Brian Ross, filing for WORLD NEWS, says Stanford and his lawyers first met with prosecutors at the Justice Department, where he surrendered his passport. The FBI later served Stanford legal papers, at the request of the Securities and Exchange Commission, in Fredericksburg, Virginia, where he was said to be staying with relatives. Although Stanford is not under arrest or in custody, his flamboyant lifestyle seems to be crumbling all around him. This is where the "lost" part comes in. As Brian explains: "the SEC has begun to seize an array of private property owned by Stanford and his firm." That would include six private jets and a 120-foot yacht, docked in St. Croix, where he also owns a huge mansion. At the moment there are no criminal charges against Stanford, only the SEC’s civil case. But Stanford seems to be getting ready for a worse-case scenario. Brian tells us Stanford has hired a man considered one of the capital’s top criminal defense lawyers, Brendan Sullivan of the firm Williams Connolly. (thanks to Ed Bailey for this entry)
MADOFF BANKRUPTCY HEARING TOMORROW-Tomorrow will be the first gathering of Bernie Madoff’s creditors, and the bankruptcy trustee is holding the hearing in the basement auditorium of the majestic federal court at Bowling Green in lower Manhattan. The hearing is scheduled to last from 10am to 6pm. Madoff allegedly scammed thousands. Hundreds could show up, and because of distances others will dial in by conference call. Madoff himself will not be there. Rich Esposito will be in courtroom and will file for digital/radio. We’ll also have a cameraman and an off-air with a dv outside the courtroom
–Maybe this is what we need to get out of our economic funk. TIGER WOODS announced today that he would resume his professional golfing career next week at the WGC-Accenture Match Play. Woods is the defending champion. This will be his first tournament since his stunning U.S. Open victory last June. Following that playoff win over Rocco Mediate, Woods underwent season-ending reconstructive surgery.
–Tubular dudes! The CALIFORNIA STATE LEGISLATURE has finally passed the state’s plan to close its’ $42 billion deficit. The plan includes $12.8 billion in tax hikes, $15.1 billion in cuts, billions in borrowing and measures intended to stimulate the state’s economy. California Governor Schwarzenegger will sign the bill tomorrow.
–A 9-YEAR-OLD ARIZONA BOY HAS PLED GUILTY TODAY TO NEGLIGENT HOMICIDE in the shootings of his father and his father’s roommate. Two charges of premeditated murder for both deaths were dropped.
–More suspect product from China. This time it’s possible DEFECTIVE DRY WALL. Lisa Stark says it’s installed in homes in Florida and as many as 11 other states. Stark:" The dry wall apparently emits three sulfide gases (sulfur) which not only smells like rotten eggs but is so corrosive that it is damaging pipes, electrical wiring and home appliances." The Consumer Product Safety Commission opened a formal investigation today.
–Some potentially bad news for Illinois SENATOR ROLAND BURRIS. It seems his most recent inconsistent statements may be costing him an important base of support. A Chicago minister tells Associated Press that he and other black pastors in Chicago who had previously supported Burris are now going to ask him to resign. The minister spoke on condition of anonymity because the meeting with Burris had not been scheduled yet.
–Some international news. Kirit Radia reports that MIDEAST ENVOY GEORGE MITCHELL will be heading back to the region next week. This second trip should include rescheduled stops in the UK and Turkey as well as return visits to Israel, Saudi Arabia and a possible visit to the Palestinian territories. Radia says Mitchell will link up with Sec of State Clinton at the Gaza donors conference in Egypt early next month.
–Radia also reports that SECRETARY OF STATE CLINTON AND SPECIAL REPRESENTATIVE RICHARD HOLBROOKE will host the Afghan and Pakistani Foreign Ministers in DC next week. This will be the Obama Administration’s first attempt to bring the two sides together. One thing sure to be discussed? Pakistan’s recent peace deal with Taliban militants in the Swat Valley. The U.S. isn’t so keen on that development.