Paul Kangas' Stocks in the News
Tuesday, July 15, 2008
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PAUL KANGAS: Fed Chairman Bernanke's comments about energy and the economy helped send oil prices tumbling today, notching their steepest one-day dollar decline in 17 years. At one point prices were down $10 a barrel from the day's high, before creeping back up. Light sweet crude settled down $6.44 to $138.74 a barrel. And we see an extremely volatile session, no question about it. Now while that big tumble in oil prices played a major roll in afternoon trading on Wall Street, the scope of the financial crisis was a big overhang at the start of trading, sending stocks sharply lower. A bigger than expected 1.8 percent jump in June wholesale prices was another negative. That had the Dow plummeting over 200 points at mid-morning with the NASDAQ off 34 points. Stocks made a sharp recovery thanks to those plunging oil prices, but after moving to a 50-point gain at 3:00 p.m., the blue chips fell back at the close. So the Dow Industrial Average ended down 92.65 points at 10,962.54, that's the first close below 11,000 in about two years. The NASDAQ Composite managed to gain 2.84, ending at 2,215.71. Standard & Poor's 500 lost 13.39 at 1,214.91. Over in the bond market, the 10-year note rose 10/32 to par and 13/32, putting the yield at 3.82 percent.
Big Board volume leader on a heavy 40.3 million shares was Citigroup (C), down $0.66.
Followed by Wachovia (WB), a $0.76 drop there. And Wachovia traded as low as $7.81. Standard & Poor's repeated a strong sell recommendation. Oppenheimer downgraded it from market perform to underperform in the belief that Wachovia will have difficulty in growing earnings.
Another weak bank stock, Bank of America (BAC), down $1.63.
But Washington Mutual (WM) edged up $0.38.
Lehman Brothers (LEH), an $0.82 gain, traded as high as $14.57. The New York Post reported that CEO Dick Fuld is seriously mulling over a way to take the company private and out of the public eye, what with all of these rumors as to whether it's solvent or not. Moving along, Freddie Mac (FRE) down $1.85 on concerns that rescue plans may hurt the equity stakes of current shareholders.
And for the same reason, that's why Fannie Mae (FNM) was down $2.66.
General Electric (GE), a $0.53 drop there.
Wells Fargo (WFC) fell a $1.06.
And JPMorgan Chase (JPM) lost $0.67, 10th in Big Board volume.
American International Group (AIG) off $1.91. Wachovia downgraded it from outperform to just a market perform rating.
Johnson & Johnson (JNJ), another Dow stock, but this one is up $1.29. Second-quarter earnings $1.18, up from $1.05 last year, that's $0.06 above the Street estimate. Standard & Poor's upgraded it from buy to a strong buy.
State Street Corporation (STT), look at this, a bank with earnings and a nice gain of $3.95. Second-quarter operating earnings came in at $1.40, $0.04 above the Street estimate, and that's up from $1.07 a year ago. Revenue jumped 39 percent. The company now sees 2008 operating earnings at the high end of 10 to 15 percent growth factor. Safeco (SAF), the insurance company, up $3.25. Liberty Mutual has reaffirmed it will acquire Safeco for $68.25 a share in cash.
Schering-Plough (SGP) was up $0.94. Lehman Brothers upgraded it from equal weight to overweight.
On the downside, we have Eaton Corp. (ETN) losing $5.42. Second-quarter operating earnings were higher, $2.10, up from $1.70 last year. But the company cut its full-year earnings estimate by $0.20 a share.
The coal and other related stocks in the energy field were very weak today on Fed Chairman Bernanke's comment that the U.S. economy would slow down and cut demand for a lot of commodities. Arch Coal (ACI), CONSOL Energy (CNX), Massey (MEE), Patriot Coal (PCX), and Peabody Energy (BTU), all significant losses on that news today.
Sonic Automotive (SAH) down $1.91. The auto retailer sees second-quarter earnings of $0.48 to $0.50, well below the $0.55 Street estimate.
Then Worthington Industries (WOR) off $2.31. The metal processing company got a downgrade to sell from Goldman Sachs.
Apple (AAPL) topped the active list, down $4.24.
Google (GOOG) off $5.53.
Research In Motion (RIMM) fell almost $2 a share.
Microsoft (MSFT) moving up a dollar. Earnings are due out Thursday for Microsoft.
Intel (INTC), we told you the story earlier, up $0.24, better-than-expected earnings.
Baidu.com (BIDU) down $9.36.
Cisco (CSCO), a $0.26 loss.
Qualcomm (QCOM) fell $0.94.
Oracle (ORCL), a $0.20 drop.
And then First Solar (FSLR) off $8.96.
Evergreen Solar (ESLR), however, up $1.05. The company got a $1.2 billion contract to supply solar panels to a German firm called IBC Solar.
And then finally we see CSG Systems International (CSGS) up $2.68. Citigroup upgraded it from hold to a buy.
Those are the "Stocks in the News" tonight.
