Stocks in U.S. Tumble on GM's Record Loss, Dollar's Drop, Subprime Concern

[Purveyor]

Source: Bloomberg News

Nov. 7 (Bloomberg) -- U.S. stocks fell, erasing their gains since the Federal Reserve's Sept. 18 interest-rate cut, after New York expanded its probe of the mortgage industry, General Motors Corp. posted a record loss and the dollar tumbled.

Washington Mutual Inc., the largest U.S. savings and loan, declined the most in 20 years after New York Attorney General Andrew Cuomo said there's a ``pattern of collusion'' in the bank's home-loan appraisals. Fannie Mae posted its steepest drop since 2005 and Freddie Mac sank to a seven-year low after Cuomo subpoenaed the two biggest U.S. providers of mortgage financing. GM slid after writing down $39 billion in tax benefits.

The Standard & Poor's 500 Index lost 44.65, or 2.9 percent, to 1,475.62, its biggest drop since Aug. 9 and lowest level since Sept. 12. The Dow Jones Industrial Average retreated 360.92, or 2.6 percent, to 13,300.02. The Nasdaq Composite Index decreased 76.42, or 2.7 percent, to 2,748.76. More than 12 stocks fell for every one that gained on the New York Stock Exchange.

``Is there another shoe to drop in financial services? Does the dollar continue its dive? Those are the issues that the market is responding to,'' said Matthew Kaufler, who helps manage $2.6 billion at Clover Capital Management in Rochester, New York.

The collapse of the subprime mortgage market has dragged financial shares down 18 percent this year, prompted the Fed to cut interest rates and accelerated a sell-off in the U.S. currency. The dollar fell to the lowest in 30 years against a basket of six rivals today after Chinese officials said they plan to move some of the nation's $1.43 trillion of foreign-exchange reserves into stronger currencies.

http://www.bloomberg.com/apps/news?pid=20601087&sid=avQr0FQ8Lr6U&refer=worldwide

Read more: http://www.bloomberg.com/news/worldwide/

[Robbien]

1. One of the very few stocks which posted a gain today - Solar Power Industries

Now that makes me smile.

CNBC is in full panic mode giving mouth to mouth desperately trying to revive the bulls.

[Purveyor]

2. CNBC has a list of several alternative energy companies that have been doing quite well ytd.

Michigan is working hard in trying to startup and lure investment for research and manufacture of solar and wind alternatives.

Since we've lost 100's of thousands auto related jobs, the environment is much better for startups. Manufacturing workers in my county (jackson) will stand in line for hours to apply for a $10.00 job.

[Robbien]

3. Just as in the case of the electric car, the big energy money is doing

everything it can do to suppress real alternative energy sources.

Luckily State and local governments are pushing past that and giving solar and wind a fighting chance.

[quiet.american]

6. -- and I've noticed almost all the solars are up in after-hours trading, too. :)

First Solar was up $39 and change in after hours!
Also up were:

JASO
SPWR
TSL

and even little

ESLR (finally making some steady gains)

[Skink]

4. Just another day in paradise.

[cliss]

5. Mystery question:

"Is there another shoe to drop in financial services? "

"Does the dollar continue its dive?"

"Is there a problem with the subprime mortgages?"

"Have the banks been lying about their losses in the subprime meltdown?"

"Is it going to get worse?"

Answer to all 5 Questions:

~
~
~
YES

[Robbien]

7. Yup

And add to all that, the premium included in all the trades for predator hedge fund trade profiteers. All which just magnify the problem.

And there we go. And there we sit in the stink.