Nov. 19 - Summary: Dow takes another run, and miss, at 16k; Chanos' warnings for investors; Best Buy's margin squeeze; Home Depot's raises outlook; JP Morgan's $13bln settlement. Bobbi Rebell reports.
Despite crossing the 16,000 mark for the second day in a row, the Dow and the other major indexes sank lower in Tuesday trading ahead of an evening speech by Federal Reserve Chairman Ben Bernanke. Well known short seller, Jim Chanos, President of hedge fund Kynikos Associates, who spoke at the Reuters Global Investment Outlook Summit, had a warning for investors: SOUNDBITE: JIM CHANOS, PRESIDENT, KYNIKOS ASSOCIATES (ENGLISH) SAYING: "You know markets have a funny way of swinging back and forth as you might have noticed and we are at a time right now where people are beginning to get a lot more ebullient and aggressive and are starting to do some silly things with their money and I think it's time for investors to be a little bit more cautious." Chanos added that shares of major international oil companies like Exxon Mobil increasingly look like a value trap for investors because of declining cash flows and sliding returns. JP Morgan has agreed to pay $13 billion to settle claims it overstated the quality of mortgages sold to investors during the housing boom. Even after the settlement, the bank faces at least nine other government investigations. Best Buy shareholders giving back some of their gains - the high flying stock fell after the retailer said profit margins could get squeezed because of heavy price competition this holiday season. The news overshadowed Best Buy's better than expected profits. The improving housing market, and Americans sprucing up their homes, helped Home Depot top its profit and sales estimates for the third quarter. The number one home improvement chain raised its full year outlook sending its stock to a lifetime high. No names and no target date but Microsoft's Bill Gates says he's pleased with the progress the company is making in its search for a new CEO to replace Steve Ballmer. Gates made the comments at Microsoft's annual shareholder meeting where he got choked up with emotion, thanking his longtime friend for his work at the company. In Europe, red arrows across the board - negative comments from activist investor Carl Icahn at the Reuters Global Investment Outlook Summit drew attention to what has been a mixed earnings season.