The PremiereTrade Market Wrap for 11/19/07

The painful collapse of the housing market along with the credit crunch will weigh down economic growth in the final three months of this year and cause economic activity to lag in 2008. The latest look-ahead from the National Association for Business Economics says the gross domestic product is on track to expand at just a 1.5 percent pace from October through December.

Oil prices increased with more talk among OPEC members about converting their cash reserves to the euro and away from the U.S. dollar. There is also doubt a possible OPEC output hike next month would get more supplies to market in time for the northern winter.

The national average price for gasoline rose about 13 cents over the last two weeks. According to oil industry analyst Trilby Lundberg, the average price of regular gasoline was $3.09 a gallon, mid-grade was $3.21, and premium was $3.32.

Xerox (XRX) announced its first quarterly cash dividend in six years, a sign that the business is again healthy. A dividend of 4.25 cents per share will be payable Jan. 31 for shareholders of record on Dec. 31.

Chrysler is considering wide-ranging branding changes that would streamline its product offerings and eliminate as many as 1,000 dealers. A plan currently under discussion calls for Chrysler dealers to sell all of the automaker's passenger cars under the Chrysler name. Dodge dealers would sell only pickup and commercial trucks, and Jeep dealers would sell only Jeep and sport-utility vehicles.

In Forex News Today

The U.S. Dollar continued to consolidate against majors in a quiet day. The Yen was lifted on risk aversion by a decline in the Asian and European stock markets. But after all, it's still stuck in a familiar range. Markets will look into housing data from US tomorrow to trigger some volatility and is expected to take the dollar even. Tomorrow's housing starts and building permits are also expected to show further deterioration in the U.S. housing markets.

The Bank of England's latest Inflation Report was one of the pessimistic documents it has produced in the 10 years since it became independent. It is realistic in seeing the most likely outcome that growth next year slows sharply in the UK and that inflation, while moving a bit higher near term, will be comfortably close to the 2% target level beyond that small near-term hump.

The U.S. dollar was slightly higher against most major counterparts throughout the day, but fell modestly against the yen, with many investors reluctant to take aggressive new positions in a Thanksgiving holiday-shortened week in which the U.S. Federal Reserve will release the minutes of its Oct. 31st meeting as well as its new economic forecasts through 2009. Some analysts believe that Tuesday's inaugural release of the Fed's three-year forecasts should, by design, reveal a relatively encouraging growth path for inflation and output.

Scheduled Economic Reports (Tuesday)

Housing Starts (Oct)

In Earnings News

Lowe's Cos. (LOW) said said it earned $643 million, or 43 cents a share, for the three months ended Nov. 2, down from $716 million, or 46 cents a share, a year earlier.

The Campbell Soup Co. (CPB) reported a 7.2 percent decline in first-quarter profit on Monday as the world's largest soup maker absorbed higher costs.

ConAgra Foods Inc. (CAG) plans to reiterate its earnings forecast for 2009 and 2010 when it meets with institutional investors this week.

Scheduled Earnings Reports (Tuesday)

Office Depot, BJs Wholesale, Hormel Foods, DR Horton, Barnes & Noble, Foot Locker, Borders Group, Hot Topic, Saks, Mesa Air Group, and Zales

Stocks in the News

Citigroup (C) was downgraded to sell from neutral at Goldman Sachs, with the broker seeing up to $15 billion in write-downs from collateralized debt obligations over the next two quarters.

Applied Materials (AMAT) said it is purchasing privately held Italy-based Baccini for approximately $330 million in cash.

Cooper Tire & Rubber (CTB) said its board approved a $100 million share buyback.