Paul Kangas' Stocks in the News
Tuesday, March 13, 2007
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JEFF YASTINE: A weaker than expected February retail sales report was blamed for the market's early downturn, as investors worried about the health of the consumer. The Dow dropped about 80 points in the opening minutes. Morgan Stanley and Lehman Brothers said that weak retail sales number might lower their forecasts for first quarter economic growth. At midday then, the Mortgage Bankers Association report came out and the tumble intensified, with the indexes stair-stepping their way lower, pretty much right into the close of trading. The Dow dropping 242.66 to end at 12,075.96. The NASDAQ falling 51 3/4 to 2,350.57 and then the S&P 500 ending off 28.65 to 1,377.95. In the bond market, flight to safety buying boosting the 10-year 16/32 to 101 1/32 and putting the yield down to 4.50 percent.
General Electric (GE) topping our list, down $0.35.
CVS Corp (CVS) falling a fraction. The CEO talking up the benefits of its acquisition of Caremark Rx. He sees it adding $0.10 to $0.18 a share of profits at CVS over the next two years.
And then there's Caremark Rx (CMX) losing $0.32.
Pfizer (PFE) dropped $0.44.
And then JPMorgan Chase (JPM) losing more than $2. A "Wall Street Journal" article today noting the thinning demand for the sub-prime mortgage backed securities that JPMorgan sells and buyers starting to demand much higher yields for the rest.
Ford Motor Co (F) falling $0.18.
And then Citigroup (C) down $1.61. Six month lows for Citigroup stock and rumors circulating that Citi's exposure to the sub-prime market were 19 times greater than previous disclosures, but Citi says that rumor is false and the firm has not made any disclosures about its sub-prime liability.
ExxonMobil (XOM) down nearly $1 on a pull back in oil prices. April crude settled below $58 a barrel, the lowest since late January.
Washington Mutual (WM) shed $2.11, again, part of that weak financial sector and Washington one of the largest writers of sub-prime mortgages in the past quarter.
Bank of America (BAC) again down $1.63 as part of that same group.
Goldman Sachs Group (GS) as you heard Scott Gurvey mention, had earnings out today but the stock dropping $3.57. Goldman Sachs executives say they have only modest exposure to losses in the sub-prime arena.
General Motors (GM) down $0.81. Its former GMAC unit getting a $1 billion cash infusion from the auto maker to shore up its balance sheet. GMAC has one division ResCap that's exposed to the sub-prime area. By the way, the cash infusion mandated as part of the deal GM signed last year when it sold 51 percent of GMAC to Cerberus Capital. They'll keep GMAC's book value above a certain level.
Then on to Lowes Companies (LOW) which was nailed for a loss of $1.60. The CEO saying some impact but not a huge one from the fallout in the sub- prime mortgage area.
Despite the housing woes, investors moving into WCI Communities (WCI), the stock up nearly $3 after Carl Icahn's firm said it plans to make a $22 a share offer for the rest of WCI that it does not already own.
Texas Instruments (TXN) falling $0.85. The chip maker with a mid- quarter update last night, noting a pick up in business and updating its revenues and earnings targets slightly.
Then Jo-Ann Stores (JAS), the stock up $2.83, a turnaround for the crafts retailer with a big jump in operating margins.
Now let's move onto the NASDAQ where Google (GOOG) fell almost $12. Its youtube division sued by Viacom for $1 billion. Viacom upset about thousands of video clips of its copyrighted programming on youtube.
Apple (AAPL) off $1.47.
Qualcomm (QCOM) up $1.71, raising its forecast for earnings and revenues and also upping its dividend.
Microsoft (MSFT) losing $0.72.
Cisco Systems (CSCO) down by nearly the same amount.
Amgen (AMGN) falling $0.29.
Intel (INTC) losing $0.36.
Research in Motion (RIMM) down over $3.50.
Sandisk (SNDK) with a small gain.
And Dell (DELL) losing $0.56.
J2 Global Communications (JCOM) climbing $2.53. It sees quarterly profits above estimates and yearly profits above estimates as well.
And then finally Infocrossing (IFOX) dropping more than $2. The maker of computer networking gear forecasting higher revenues for the fiscal 2000 period, but it will spend about $3 million more for marketing and sales expenses.
Those are our stocks in the news tonight.
