Stocks: After Dow 7,000, What Next?

Investors don’t lack ways to measure the carnage on Wall Street. What they’re missing is a way to calculate when the losses will stop. In falling markets, technical analysts look to stock market history for points where buyers might jump back into the game. These so-called support levels are places where, at least in theory, stock market momentum should slow or shift.

The 7,000 level for the Dow Jones industrial average is a nice round number, but it definitely wasn’t a support level. On Mar. 2, the Dow blasted through 7,000, dropping almost 300 points, or 4.24%, to 6,763.29. A variety of technicians and investing experts say they no longer see any support under the market: “We’re largely in uncharted territory,” says Richard Sparks of Schaeffer’s Investment Research.

Source: BusinessWeek

Fannie and Freddie: Government Property?

Mortgage giants Fannie Mae and Freddie Mac are likely to remain in government hands, despite earlier promises otherwise. This prospect has heightened concerns that government stakes in U.S. banks, now being considered, could also end up becoming permanent.

Source: New York Times

Trade Representative Owes Taxes

Obama’s pick for U.S. trade representative, former Dallas mayor Ron Kirk, owes unpaid taxes from the last three years. According to the Senate Finance Committee, Kirk didn’t pay almost $10,000 in taxes because of mistakes he made in filing. Kirk has said he will file amended returns.

Source: Washington Post

Commodity Prices to Fall, Says Australia

Australia says exports of iron ore, copper, and wool will fall for the first time in six years, hitting earnings at big producers BHP Billiton and Rio Tinto Group. Commodity prices in 2008 fell the most in half a century, causing production halts at BHP and Rio. A rebound is expected in 2010 as India and China spur demand again.

Source: Bloomberg

China Looks to Boost Energy Sector

China’s National People’s Congress, opening this Thursday in Beijing, will discuss how the energy sector can help boost growth in a slowing economy. The 3,000 delegates are also likely to debate the continuing reform of the national power grid.

Source: Wall Street Journal

HSBC Raises $18.1 Billion, Cuts U.S. Jobs

HSBC raised $18.1 billion in a stock issue Monday, saying it intends to retreat from the U.S. while expanding in Asia. Europe’s biggest bank intends to cut 6,100 jobs as it shuts the majority of its U.S. consumer lending business. At the same time, HSBC says it is interested in new acquisitions in Asia.

Source: Reuters

Dubai Construction Squeeze

In a further sign of the economic woes affecting the Gulf, contractors and consultants are facing a cash squeeze as large government-linked developers fail to pay their bills. Falling property prices and clogged credit markets have affected top developers who owe billions of dollars on contracts up to six months overdue.

Source: Financial Times

Apple’s Mac Grows Overseas

Facing a slowing market in the U.S., Apple plans to grow its international Mac sales. Mac sales, which make up more than 40% of total Apple revenues, are still small overseas compared to its more popular iPod. Apple plans to add 25 new stores, about half overseas, to the 250 outlets it now maintains in ten counties in fiscal 2009.

Source: Reuters

In China, Bracing for More Tibet Trouble

As members of China’s National People’s Congress meet in Beijing later this week they are likely to discuss how to deal with a renewed flare-up of unrest in Tibet. That prospect is likely alarming for multinationals. Last year, there was a backlash against foreigners, with nationalistic Chinese youth using the Internet to organize boycotts of companies including French retailer Carrefour and luxury-goods company LVMH Moët Hennessy Louis Vuitton.

Source: BusinessWeek

IN YOUR FACE: AIG’S UPHILL BATTLE

Reader Matt Lechner Writes: “AIG’s situation is compounded by a too-low level of disclosure and excessive portfolio fragmentation.”

Join the AIG Debate on BW’s Management IQ Blog

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