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Economic Growth Concerns Pull Down Indexes However There is Still Room
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I belong to the minority who expects a FED rate increase in 2007.The inflation data still looks torublesome. U.S. stocks dropped on Friday as concerns about slowing economic growth persisted, causing investors to sell shares of bellwether companies such as plane maker Boeing Co. and leaving all three major indexes in the red for the week.
The Standard & Poor's 500 index and the Nasdaq had their biggest weekly drops since July. Trading was light ahead of the three-day Christmas weekend.
Durable goods orders, excluding volatile transportation orders, fell unexpectedly in November, a government report showed. It was the second consecutive monthly drop in durables orders excluding transportation and the fourth decline in the last five months.
One of the most important variables next year is capital spending, and this gives you some insight into capital spending intentions. Frankly, I think it's going to be disappointing.
Boeing shares were among those leading declines, dropping 1.3 percent, or $1.18, to $88.76. It was the biggest drag on the Dow.
This week and probably next, the market will look for profit taking.However we stil have room for buy outs and mergers.Major merger deals, which have been a key catalyst fueling recent stock market gains, are expected to remain in the forefront of investors' minds going into 2007 as the last week of the year closes out with a dearth of data and earnings.
Flush with cash and eager to grow, companies around the world continue to woo and wed at a frenzied pace, with mergers and acquisitions hitting a record of nearly $4 trillion worldwide this year so far. That easily surpasses the previous high in 2000 of $3.4 trillion, according to the latest figures on Friday from Thomson Financial.
Buyout funds, too, are back and bigger than ever: The value of announced global M&A by private-equity firms and other financial sponsors so far this year hit a record at over $725 billion.
Leveraged buyout, or LBO, activity driven by private equity firms has been a feature of the stock and bond markets throughout the year because of the creation of value for equity holders. Indeed, investors still argue that many large-cap companies remain undervalued, notwithstanding the sector's recent rally.
Punctuating the buyout bonanza is the recent interest by bargain-hunting private equity firms in home improvement chain Home Depot, which has a market capitalization of about $82 billion.
Awash in cash, buyout funds are preying on companies whose shares are trading below their underlying net asset values.
There could be a number of cross-border deals next year, fueled by record cash reserves and a desire for global growth.
Year-to-date, the Dow has gained 15 percent, while the MSCI All-Country World Index is up about 18 percent.
Solid earnings have also been another catalyst. Companies in the Standard & Poor's 500 index <.SPX> posted their 17th consecutive quarter of double-digit earnings growth in the third quarter.
People are being able to grow their business both inside the United States by gaining market share and on a global basis.
But on Friday, stocks dropped as concerns about slowing economic growth persisted, causing investors to sell shares of bellwether companies such as plane maker Boeing Co. |
| Tarih
: 25.12.2006 |
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© 2006 Mert TOKER All Rights Reserved. |
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