Paul Kangas' Stocks in the News
Tuesday, August 12, 2008
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PAUL KANGAS: The financial stocks led an early sell-off on Wall Street as firms like Morgan Stanley (MS), JPMorgan, and Wachovia (WB) warned that stormy conditions in the credit market would result in more write-downs. A brokerage downgrade on Goldman Sachs (GS) added to the selling. An hour into trading, the Dow posted a 110-point loss and the NASDAQ was off 12 points. That drop in oil helped the market stabilize for several hours, but then some late renewed weakness in the financials resulted in a broadly lower close. The Dow Industrial Average ended off 139.88 points at 11,642.47. The NASDAQ Composite was down 9.34, ending at 2,430.61. While the Standard & Poor's 500 Index fell 15.73 to 1,289.59. In the bond market, the 10-year note gained 26/32 to 100 27/32, putting the yield down to 3.90 percent.
Big Board volume leader, a familiar name, Citigroup (C), losing $1.28 on 15 million shares today.
Followed by JPMorgan Chase (JPM). The company warned it will be forced to take a $1.5 billion write-down on mortgage-backed securities this month.
Wells Fargo (WFC) is down $1.23.
Bank of America (BAC) fell $2.25.
Wachovia (WB) losing $2.21. The company said it will record an additional $500 million in legal reserves related to auction rate securities. And this will boost its previously reported second-quarter loss of $4.20 a share up to $4.31 a share.
Kraft Foods (KFT) in there with a $0.14 loss.
General Electric (GE) fell $0.21.
American International Group (AIG) fell $1.62.
Petrohawk Energy (HK) moving up $1.35. The company is in the midst of 25 million share common stock offering, which was priced last night at $26.53. It looks like demand is rather good.
Washington Mutual (WM), 10th in volume, was down $0.44.
Just after the market closed, it was announced by CVS Caremark (CVS) it has agreed to acquire Longs Drug Stores (LDG) for $71.50 a share. Longs' after hours stock was up to $70 a share, from $54.04. And CVS fell $0.49 on the regular way of trading, dropped about a dollar after that on this news.
Moving along, Morgan Stanley (MS) down $2.89. It will buy back $4.5 billion in auction rate securities from its retail accounts.
Goldman Sachs Group (GS) down $10.70. Deutsche Bank downgraded from buy to hold, and Oppenheimer cut 2008 and 2009 earnings estimates on Goldman.
UBS (UBS) financial down $1.39. The company had a second-quarter loss of $330 million and sees little second-half improvement in the financial markets for this year.
Finally, a bank that is up. UnionBancCal (UB) of California, of course, up $7.32. Mitsubishi UFJ Financial (MTU), which already owns 65 percent, has offered $63 a share for the remaining 35 percent of UnionBancCal stock.
McDonald's (MCD) down $2.01. UBS financial downgraded it from buy to just a neutral rating.
Big gainer in LDK Solar (LDK), up $5.79. The company in with second- quarter earnings of $1.29, way up from $0.45 last year. And it boosted its outlook for the rest of the year.
Major loser, Constellation Energy (CEG), tumbling $11.79. It traded as low as $57.12 today. Analysts say high volatility in fuel and electricity prices have increased the risk of a debt downgrade. And the company said if that happens, it could be forced to post billions of dollars in extra collateral. That would be bad news.
Fluor Corporation (FLR) down $4.54. Second-quarter earnings jumped to $1.13 from $0.53 last year. But Citigroup downgraded it from buy to hold on the likely softening of the stock's valuation as commodity prices come down.
NASDAQ's most active, Apple (AAPL), up $3.17. Singapore Communications will launch sales of the company's iPhone starting August 22nd.
Research In Motion (RIMM) down $3.13.
Microsoft (MSFT) a $0.22 gain.
Google (GOOG) fell -- or gained $1.77.
Intel (INTC) a $0.14 rise there.
Moving along, Cisco (CSCO) down $0.12.
Qualcomm (QCOM) fell $0.21.
Baidu.com (BIDU) up $7.13.
Dell (DELL) up $0.14. You heard the company's new lightweight laptop.
And then Amazon.com (AMZN), an $0.84 loss.
Fossil Incorporated (FOSL), which makes those fashion watches, second- quarter earnings, $0.36, up from $0.21 last year on a 15 percent jump in revenues.
And finally, Altus Pharmaceuticals (ALTU) fell $2.44, or over 49 percent to $2.50 a share after late-stage trials of its cystic fibrosis treatment called Trizytek failed to meet expectations.
