Jamie Dlugosch

Big 3 Make Their Case--Will it Help?

by Jamie Dlugosch   11/20/08

Stating that MSFT is no longer interested in acquiring YHOO. He did leave the door open for a deal on search. How kind of him.

Shares of YHOO dropped more than 20% on the news. MSFT is playing hardball, no doubt. I think that is a mistake. MSFT could use YHOO. Then again, they figure in this economy and with all their cash they may be the last man standing.

Oil continues its assault on $50 per barrel. In early trading today, crude is below $52 and falling. There is no getting away from the fact that oil is tied directly to the fortunes of the stock market.

Rightly or wrongly oil markets are putting faith in the stock market to evaluate the health of the economy. As of now the market is saying the economy is hurting and hurting bad. Only intervention from OPEC will break the trend lower. For now the oil cartel is remaining silent.

Asian markets dropped even more than the U.S. overnight. Stocks there were pushing lower by 7% or greater. European stocks are down some 3% this morning. Again all eyes are on the U.S. Until we start moving higher foreign stocks will continue to fall.

Dow futures are down fractionally this morning. Look for traders to buy this low. Profit taking and a bounce off the lows can be expected today.

Futures are being helped by the announcement that Saudi Prince Alwalweed will increase his stake in Citigroup (C) to the 5% level.

The Prince is down big on his investment, but he is going down with the ship if indeed that is C's future. The market likes the move and C is up 6% in pre-market trade.