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Fear spikes with shutdown progress elusive

Monday, October 07, 2013 - 02:25

Oct. 07 - Summary: Wall Street sinks to lows as lawmakers fail to rise above shutdown rhetoric; Twitter gets ''buy'' rating before IPO; BlackBerry talking to numerous suitors on buyout; Boeing on wrong side of Japan sale. Conway G. Gittens reports.

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Congress is back in session and there's a lot of verbal arm-twisting between the Senate's Harry Reid and the House's John Boehner - but not a lot of results. SOUNDBITE: HARRY REID, DEMOCRAT, SENATE MAJORITY LEADER (ENGLISH): "We won't negotiate to a gun to our heads, we say to our Republican colleagues end this irresponsible government shutdown, stop your reckless threats of a default on the nation's obligations." SOUNDBITE: JOHN BOEHNER, REPUBLICAN, HOUSE MAJORITY LEADER (ENGLISH) SAYING: "This morning, the senior White House official said that the President would rather default than to sit down and negotiate. Really?" Investors took notice of the war of words, now continuing for a full week and decided it was time to sell. In a sign of increasing unease the volatility index, known as the fear gauge, shot to its highest since June. "Buy" Twitter - that's the recommendation of SunTrust Robinson, telling customers the stock price could almost double in the first year of trade. The analyst believes greater exposure to traditional media, as well as advertising revenues will drive sales. Case in point- Nielsen announced a new Twitter TV rating to gauge the connection between TV viewing through tweets. Normally - this is where I'd say how shares of Twitter responded - but you know what - the IPO hasn't even launched yet. Who wants to own all or a piece of BlackBerry - just about everyone it seems if you believe the chatter. Sources tell Reuters that BlackBerry is in talks with Cisco Systems, Google and even German software company SAP to sell all or parts of itself. Why so many bidders? Macquerie in a note says BlackBerry's sinking share price is low enough now to attract others who could do a deal without busting their wallets. Shares of BlackBerry climbed almost 4 percent in U.S. listed trade. Japan Air Lines is breaking tradition and for the first time ever for a Japanese air carrier - buying planes made by Airbus instead of Boeing. The historic deal comes with a $9-1/2 billion price tag. Boeing admits recent troubles with its 787 Dreamliner were probably the blame. Analysts say this is a major miss for Boeing - but you could not tell that from the stock, which was down just slightly. In Europe, late news that Alcatel-Lucent is planning to cut 15-thousand jobs according to French newspaper Les Echos. The headline came after stocks in France barely closed higher and stocks were modestly lower in Germany and the U.K.

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Fear spikes with shutdown progress elusive

Monday, October 07, 2013 - 02:25