Paul Kangas' Stocks in the News
Thursday, August 16, 2007
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PAUL KANGAS: That 10-year low in July housing starts, on top of sharp losses in global financial markets, sent stocks on Wall Street broadly lower early today. After an hour of trading, the Dow posted a 170-point loss, and the NASDAQ Composite was off 34.
Deepening the sell-off was that news that Countrywide Financial was forced to draw down an entire $11.5 billion credit facility to fund its operations.
By early afternoon, the Dow was off over 340 points. But that oversold level triggered a buying stampede, which almost wiped out the losses. The Dow Industrial Average closed off only 15.69 points at 12,845.78. The NASDAQ Composite down just 7.76 at 2,451.07. Standard & Poor's 500 index actually gained 4.57, ending at 1,411.27.
In the bond market, the 10-year note gained 6/32 to par and 12/32, putting the yield at 4.70 percent.
Let's have a look at the most active Big Board issue. And that, for the second day in a row, topped by Countrywide Financial (CFC), trading 48.8 million shares today. Down $2.34 on the close, but it traded as low as $15 a share this morning after the company said it's drawing down all of an $11.5 billion credit facility to fund operations. But it said 60 percent of that will be repaid within nine months.
You can see that the comeback this afternoon was led by the financials. Citigroup (C) up $1.94, and Bank of America (BAC) gain of $1.62.
GE (GE), a $0.30 rise, and then Ford Motor (F) down $0.30 a share.
Moving along, Pfizer (PFE), a $0.13 drop.
And some more strength in the financials -- JPMorgan Chase (JPM) up $2.47.
And then Co Vale do Rio (RIO), down $1.40. This is a big Brazilian mining company, and it's down on a sharp drop in copper prices. Also yesterday, investor George Soros cut its stake from 10.8 million shares down to 8.7 million shares.
EMC Corp (EMC) edged up $0.05, and another strong bank, Wells Fargo (WFE), rising $1.83 a share.
All of the Dow stocks didn't make it back into the plus column. There were still some substantial losses. Alcoa (AA), Boeing (BA), Caterpillar (CAT) and IBM (IBM) still in the red, but those prices are much improved from their lows of the day.
Another strong financial, Bear Stearns (BSC), up $13.29 on speculation the company may get funding from an outside investor, perhaps a Chinese bank. Also, Bear Stearns said it's cutting 240 subprime lending jobs. Stock up very nicely indeed.
JC Penney (JCP) did well, up $1.57. Second quarter earnings from operations, $0.78 up from $0.75 a year ago, $0.01 above the Wall Street estimate.
Longs Drug Store (LDG) has gained $1.75. Second quarter operating earnings $0.67 up from $0.51 a year ago, $0.04 better than the Street was expecting.
FTD Group (FTD), the floral delivery service, they are up $1.30. Good earnings fourth quarter, $0.36 up from $0.30 last year, and a 20 percent rise in revenues.
Then, the big gainer of the day, Lamson & Sessions (LMS). This is a company that makes electrical conduit and connection boxes, things like that. Thomas & Betts is going to acquire the company for $27 a share in cash. Thomas & Betts stock fell $2.03 on that news.
KKR Financial Holdings (KFN). This is an interesting story -- up $2.73 today. Yesterday, it tumbled $4.75 after the Friedman Billings brokerage downgraded it from outperform to market perform. Today, Friedman Billings reversed that rating, and went from market perform to outperform, and the stock rebounded rather nicely.
Continental Airlines (CAL) is up $2.57. JP Morgan added it to its focus list, and has a 12-month price target of $37 a share.
Then we see Estee Lauder (EL) losing $2.85 despite fourth quarter earnings higher, $0.45 up from last year's $0.23. But that was lower than expected by $0.05, and the company says first quarter earnings will be short of expectations.
Apple (AAPL) topped the NASDAQ's active list, down $2.85.
Google (GOOG) got clipped for over a $6 loss.
And then Cisco Systems (CSCO), $0.62 loss; a $0.12 drop on Intel (INTC).
Research in Motion (RIMM) was up $0.27.
Microsoft (MSFT), $0.27 loss. Qualcomm (QCOM), $0.84 gainer.
E*Trade Financial (ETFC) was down $0.36 a share. Traded as low as $9.92 on liquidity concerns, but the company dismissed those concerns, saying all is just fine.
And then Baidu.com (BIDU) off nearly $11, and Dell (DELL) down $0.37. As you heard, it's going to restate its financials from the year 2003 all the way to 2006. In after-hours trading, it was up about $0.60 from this price.
First Charter (FCTR), a $7.69 gain on news Fifth Third Bancorp will acquire it for $31 a share in cash and stock.
Those are the stocks in the news tonight.
