eBay Stock Gets Eaten By Bears
One would hope growing profit 20 percent plus at a mature company would be enough in these troubled financial times to hold off the bear market, but Internet shopping site eBay learned otherwise today.
On a day when the S&P again climbed, eBay (
NASDAQ: EBY) was hammered by investors despite beating estimates. Less than two hours before the market's close, EBY stock was trading down almost 15 percent, pushing the P/E ratio to over 75.
eBay announced yesterday that executive Lorrie Norrington would run the company's eBay Marketplaces division, a post once held by CEO John Donahoe. Norrington replaces long time eBay executive and former CFO Rajiv Dutta, who is leaving the company. Dutta had also previously run eBay's Skype and PayPal divisions.
We continue to suggest consumers seek advice from a licensed professional for investing and other financial matters.
Labels: bear market, eBay, Lorrie Norrington, Rajiv Dutta, Stocks
Federal Reserve Cuts Key Interest Rate
Stocks went soaring today as a result of the Federal Reserve cutting its key interest rate from 5.25% to 4.75% and the discount rate from 5.75% to 5.25%. The move thrilled Wall Street because not only is this the first time in four years that the Federal Reserve cut its key interest rate, but the cuts were larger than most expected. Within seconds of the Fed's 2:15 p.m. ET announcement, the Dow Jones industrials had a gain of more than 220 points.
The Fed hopes that this cut will reduce the possibility of the economy sliding into a recession. "The tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally," the Fed's statement on its decision said. "Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time."
The federal funds rate or key interest rate is what banks charge each other for overnight loans and is the basis for everything from business loans to credit card charges. The discount rate is what the Fed charges member institutions directly for short-term loans.
-- L. Morse
Labels: Federal Reserve, interest rates, rate cut, Stocks
