Paul Kangas' Stocks in the News
Tuesday, July 31, 2007
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PAUL KANGAS: Wall Street opened with a rollicking rally, thanks to this morning's generally positive news on the economy and General Motors better than expected results, which we'll detail in a moment. The Dow jumped over 130 points at the outset of trading and the NASDAQ gained 22 points. The market began to lose its luster on reports of more mortgage woes however. Then around 1:30 this afternoon, American Home Mortgage said it could no longer borrow money and its stock plunged 90 percent, taking the overall market with it. The selling continued right on into the final bell. Dow Jones Industrial Average plunged to a closing loss of 146.32 points at 13,211.99. The NASDAQ Composite tumbled 37.01 to 2,546.27, while the Standard & Poor's 500 Index fell 18.64 closing at 1,455.27. Over in the bond market, the 10-year note rose 16/32 to 98 4/32, lowering the yield to 4.74 percent.
Topping the big board's active list on 25.8 million shares, Ford Motor Co (F) down $0.23.
Followed by General Electric (GE) $0.51 loss there.
Pfizer (PFE) fell $0.25.
Citigroup (C) in a weak financial sector, down $0.62.
JPMorgan Chase (JPM) down $0.74 in that weak group.
Then we see Alcatel-Lucent (ALU) losing $1.66, big drop. Second quarter loss of $0.20 out this morning. That's versus earnings of $0.18 a year ago. The Street was looking for a profit.
Motorola (MOT) managed to buck the overall trend with a $0.02 gain.
Then more weak financials, Bank of America (BAC) down $0.28.
ExxonMobil (XOM) fell $0.88 despite the higher oil prices.
And then Countrywide Financial (CFC) down $1.10 in the weak group.
Verizon Communications (VZ) moved up $1.11. UBS financial brokerage upgraded it from "neutral" to "buy" on the company's improving fundamental outlook.
Then Johnson & Johnson (JNJ) a $0.43 gain. The company's going to restructure due to a slump in stent sales and expiring drug patents. The company will cut 4 percent of its work force. That's about 4800 jobs.
Health Management (HMA), big percentage drop, off $2.59. Second quarter earnings plunged 85 percent from last year to just a nickel, versus $0.32 then. The Street estimate was for earnings of $0.17, not just a nickel. Standard & Poor's issued a "strong sell." And incidentally, that tumble you see on the chart in March was due to the payment of a special $10 a share cash dividend.
Anadarko Petroleum (APC) edged up only $0.23 on the close, but traded as high as $53.31 this morning after reporting second quarter earnings of $1.38. That was $0.59 better than the Street was expecting.
Avon Products (AVP) down $2.84. Second quarter earnings fell to only $0.26 from $0.33 a year ago.
And Wendy's Intl (WEN) up $1.34. Investor Nelson Peltz, who controls Arby's restaurants said he's prepared to bid up to $31 a share on a takeover for Wendy's.
Under Armour (UA), this is a sports apparel firm, closed up $6.23, traded as high as $64.74. Second quarter earnings more than doubled from last year, $0.11 versus only a nickel then. Revenues soared 51 percent. Those earnings of $0.11, $0.08 above the Street estimate.
Then came the mortgage group, American Home Mortgage Investment (AHM) losing just over 90 percent of its value just in today alone. The company as we heard said it can no longer fund home loans and may liquidate assets.
And that spread into other companies as well like MGIC Investment (MTG) down $6.78. The company said it's been getting heavy margin calls from its lenders due to the disruption in the credit markets. And its merger partner Radian Group stock plunged $6.49 today.
Then Nelnet (NNI) off $2.42. Second quarter earnings $0.30, down from $0.84 last year and the company will pay New York state a $2 million fine to settle a business practice probe regarding its student loans.
NASDAQ topped by Apple (AAPL) down $9.67 on rumors and I emphasize rumors, the company is cutting production of iPhones and iPods or iPods. We're not sure, a very nebulous rumor.
Google (GOOG) down $6.11.
Microsoft (MSFT) $0.41 loss.
Cisco Systems (CSCO) fell $0.58.
Amgen (AMGN) down $2.45. Intel (INTC)
fell $0.23.
Research in Motion (RIMM) losing $6.11.
And then Sun Micro (SUNW), one of the few gainers, up $0.21. More on that in just a moment in an interview with CEO Jonathan Schwartz.
amazon.com (AMZN) down $4.16.
And Sandisk (SNDK) was off $2.93.
Over on the American exchange, Midwest Air Group (MEH) up $1.33. The company will begin talks with potential suitor Airtran, which has already offered $15 a share on a takeover.
Those are the stocks in the news tonight.
