Paul Kangas' Stocks in the News
Friday, July 11, 2008
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PAUL KANGAS: Deepening worries about the fate of Freddie and Fannie, coupled with the surge in oil prices sparked a steep opening selloff on Wall Street. After an hour of trading, the Dow was off 171 points and the NASDAQ down 30 points. A reflex rally attempt failed heading into the midday period, and the Dow fell back down to a 230-point deficit at 11:30 a.m. And that put it just below 11,000. As we mentioned, late in the session, the market snapped back to slightly positive ground on false reports Fannie and Freddie could borrow from the Fed discount window. But then the markets slumped again at the close. So the Dow Industrial Average ended off 128.48 points at 11,100.54. This week it rose twice and fell three times, had a net loss of 188 points exactly overall. Today the NASDAQ fell 18.77, closing at 2,239.08. It also rose twice and dropped three times this week, losing 6.30 points overall. The Standard & Poor's 500 closed down 13.89, ending at 1,239.50 today, and for the week it lost 23.41 points overall. Over in the bond market, the uncertainty surrounding Freddie and Fannie possibly tapping the discount window hit Treasuries hard. The 10-year note slid 1 12/32 to 99 9/32, lifting the yield off a seven-week low up to 3.96 percent.
Big Board volume leader on 48.6 million shares was Fannie Mae (FNM). The stock closed down $2.95, but it traded as low as $6.68 during the day on investors' questioning the viability of these government-sponsored enterprises like Freddie Mac (FRE), which closed down only $0.25, but believe it or not, traded as low as $3.89 today.
Citigroup (C), a $0.09 loss there. The company cut earnings estimates and price targets on most of the major banks.
Lehman Brothers (LEH) down $2.87.
Bank of America (BAC), one of those on the list from Citigroup, downgraded, $0.69 loss.
Wachovia (WB) fell $1.59.
But General Electric (GE), bucking the trend, with a $0.02 gain. GE out with second-quarter operating earnings of $0.54, right in-line with Street estimates. Revenues up 11 percent, a little better than expected. And the company reaffirmed its full-year guidance of $2.20 to $2.30 in earnings per share.
JPMorgan Chase (JPM) down $1.35.
Wells Fargo (WFC) fell $0.61.
And Ford Motor (F) managed to gain $0.28, 10th in volume.
Chevron (CVX) down an even $4, although the company sees a big boost in second-quarter earnings due to the record high oil and natural gas prices. But it said refining margins will suffer and could even have a loss in the second quarter. Of course, oil was very strong today, as you saw earlier.
Anheuser-Busch (BUD) moving up $5.29. The big Belgian brewer InBev has sweetened its buyout bid by $5 a share to $70 a share. Golds were strong amidst all the turmoil in the markets today, up $2.49 on Barrick (ABX). And the New York August gold contract was up $18.60 an ounce at $9.6060 an ounce.
Hercules (HPC), the chemical -- specialty chemical company, up $4.29. Ashland Corp. (ASH) will acquire it for $3.3 billion. It works out to $18.60 a share in cash, and 0.9 of an Ashland share. Today that's a value of just a little under $23. Ashland's stock tumbled $6.31, to $41.10 a share on that news.
URS Corp. (URS) up $2.66. It's in final negotiations to be awarded a contract for a nuclear complex in West Cumbria, England.
Moving along, and we see Syniverse Holdings (SVR). This is a wireless services company. The Baird brokerage upgraded it from neutral to outperform.
And then Jacobs Engineering (JEC) up $3.29. Goldman Sachs added it to the buy list, said the stock is oversold at this level.
DineEquity (DIN), used to be called IHOP, tumbling $7.34. The story here, the company said its cutting its 2008 sales forecast for its IHOP and Applebee's restaurant chains.
Also on the downside, Webster Financial (WBS) down $2.43. It's doubling its provision for second-quarter losses to a total of $25 million. FTN Midwest Securities downgraded it from buy to neutral. Apple (AAPL) down $4.05, as you heard, had some problems activating the new phones.
Research In Motion (RIMM) down $7.34. When Apple gets those phones working, it's going to be tough competition for the BlackBerry from Research.
Google (GOOG) down $6.77.
A $0.20 loss in Microsoft (MSFT).
Baidu.com (BIDU) lost $24.23.
Intel (INTC), a $0.02 gain.
Cisco (CSCO) down $0.31.
Qualcomm (QCOM) a $0.16 advance.
Oracle (ORCL) was down $0.33.
But Wynn Resorts (WYNN) snapping back, $8.20 after losing $7.62 yesterday on lower Las Vegas casino earnings. But after the close the company said it's going to buy back an additional $500 million worth of its own stock and was up sharply today.
Finally, Teva Pharmaceuticals (TEVA) down $3.22 on the threat of competition for its multiple sclerosis drug from a company called Momenta Pharma and that they've developed a generic treatment.
And those are the "Stocks in the News tonight.
