Things are actually looking a little better as of 8ish this morning. I was up late last night and actually saw S&P futures down 20! Down 10 is still ugly enough, but a 50% retracement from the lows overnight simply tells me it's not going to be a straight line down - down to be sure - but no doubt volatile again. Last year the Volatility Index ($VIX) surged intraday to nearly 24 and there now no doubt in my mind that we see that high mark taken out considering that last June's VIX peak was tied to a far less tumultuous time in the market.
Subprime is pretty much a wasteland this morning. Analysts are trying to save face by cutting their ratings. Stifel Nicolaus has cut Accredited (LEND), Novastar (NFI) and New Century (NEW) to SELL from Hold based of sagging industry fundamentals. Jeffries has also downgraded NEW to Underperform and suspended their estimates.
Countrywide Financial (CFC) has been downgraded to Equal Weight from Overweight at Lehman. Lehman, by the way, is knee deep in the mortgage securitization business as well and is on my list of short candidates to watch in the space.
Other headlines this morning: RIM restates, A&P is buying Pathmark for $1.3 bln and the Journal reports Alltel is stepping up to sell itself.
Other analyst comments of note:
Yahoo! (YHOO) was downgraded to Sell from Hold at Matrix which says the company's intrinsic value is $25. MUSA also says Yahoo faces free social and entertainment content is hurting Yahoo!
Citi skewers Whirlpool (WHR), noting the company's unfunded pension obglications are equal to $11/shr, while operating liabilities are $16/shr. SBSH reiterates a SELL this morning on WHR.
PALM was downgraded by JP Morgan to Underweight saying PALM's product line is stale. That has taken the wind out of the stock - down 3% even after the Journal report of late last night saying the company is working with Morgan Stanley to possibly sell itself.