Jim Cramer Blog

Stocks slid today amid concerns raised by the release of the minutes from the most-recent Federal Reserve Board meeting, which made clear fighting inflation remained the board's top priority. The major stock averages all closed lower as a negative bias firmly took hold, with declining stocks leading advancers by a 2-to-1 margin on both the NYSE and Nasdaq exchanges. Crude oil futures edged higher, while the 10-year Treasury note slipped.

The notes released by the Fed made clear that its governors were unanimous in their belief that fighting inflation should remain their No. 1 priority and that rate increases might be needed, even as the board's members acknowledged pressures from a slowing economy leads to a clamor for rate cuts. A change in the language of the Fed's interest rate announcement following its March meeting initially started a rally on the belief that near-term rate cuts were possible. Now, most private economists expect the central bank to leave the benchmark Federal Funds rate at 5.25% when it meets next in May.
In other downbeat economic news, the National Association of Realtors said Wednesday it expects the median price of homes to fall this year for the first time since it began tracking sales nearly 40 years ago. In its most recent forecast, the industry trade group said it expects median prices to fall -0.7% in 2007. Previously, it had forecasted a modest increase of 1.2%.
Earnings season got under way yesterday evening when aluminum producer Alcoa (NYSE: AA - News) reported strong Q1 profits driven higher by growth in the global building, construction, and aerospace markets, which offset weakness from the U.S. automotive sector. Alcoa's shares rose on the news, but it did not translate into gains elsewhere as investors wait to see a fuller picture of corporate profits. The only other big company set to report this week is General Electric (NYSE: GE - News). The season will begin in earnest next week.
In corporate news, Citigroup (NYSE: C - News), as expected, announced job cuts of 17,000 and other cost-reduction measures such as moving some jobs to lower-cost overseas venues, but the plan appeared to disappoint some investors looking for deeper cuts. The stock closed down -1.2%, though it did bounce back somewhat from its lowest point of the day. The bank said its efforts will save the company over $2 billion this year and more in years to come. Subscribers can read detailed analysis of Citigroup's plan in today's issue.
On the telecom/cable front, Comcast (Nasdaq: CMCSA - News) moved higher as CEO Brian Roberts told Bloomberg that the business was "on fire" and that he was confident the company's spending was needed to maintain its growth. One of Comcast's chief competitors, Verizon Communications (NYSE: VZ - News) closed lower. Blackberry maker Research In Motion (Nasdaq: RIMM - News), meanwhile, fell -1.5% in advance of its earnings report, and was trading weakly after reporting earnings that met estimates.
Shares of video game retailer GameStop (NYSE: GME - News) continued the advance that began when the company reported a more than 50% increase in quarterly earnings on March 27th. The shares have added nearly 22% from the stock's March 26th closing price. Janco Partner also reaffirmed its "buy" rating on the stock today and increased its target price.

By the BullMarket.com Staff

Labels: AA, C, CMCSA, GE, GME, RIMM, VZ