Paul Kangas' Stocks in the News
Tuesday, August 19, 2008
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PAUL KANGAS: The slump in housing starts and the jump in producer prices combined to lead Wall Street broadly lower at the opening. Home Depot's disappointing earnings and outlook added to the selling, as did a surge in oil prices to above the $114 a barrel level. So, by noon, the Dow was off 155 points, NASDAQ down 31 points. With stagflation talk making the rounds this afternoon, there was hardly a hint of a rally and stocks ended near their lows of the session. The Dow Industrial Average closed off 130.84 points at 11,348.55. The NASDAQ Composite was down 32.62 ending at 2384.36, while the Standard & Poor's 500 Index fell 11.91 to 1266.69. Over in the bond market, the 10-year note lost 5/32 to 101 11/32, putting the yield at 3.84 percent.
Most active New York exchange issue on 14 million shares, Citigroup (C) down $0.43. Goldman Sachs recommended shorting Citigroup stock. Goldman today also expects or downgraded, cut earnings estimates or downgraded most of the major investment banks.
Freddie Mac (FRE) in there with a $0.22 loss after dropping 25 percent yesterday.
Bank of America (BAC) in the weak group, down $1.22.
Pfizer (PFE) fell $0.30.
Kraft Foods (KFT) in there with a $0.01 loss.
American Intl Group (AIG) lost $1.28. Goldman Sachs cut its price target from $30 to $23 in the belief the company's financial products unit will have more cash losses. Goldman Sachs recommended investors not buy AIG stock right now.
General Electric (GE) $0.64 loss.
Wells Fargo & Co (WFC) down $1.01.
Ford Motor Co (F) fell $0.17.
And completing the blizzard of minus signs, JPMorgan Chase (JPM) off $1.16.
Lehman Brothers Holdings (LEH) lost $1.96. JPMorgan sees another third quarter loss for Lehman and the "Wall Street Journal" reported the company approached potential bidders about buying a piece of its investment management group to raise more money apparently.
Home Depot (HD) down exactly $1. Second quarter earnings fell to $0.71 from $0.81 last year, but that was about $0.10 above the Street estimate, although the company is very cautious about the outlook and that seems to be what hurt the stock the most.
Target (TGT) down $0.33. Second quarter earnings a bit higher, $0.82, versus last year's $0.80, $0.06 above the Street estimate, but profits at its credit card operations fell 65 percent and like Home Depot, Target is also cautious about the outlook.
American Express (AXP) down $1.26. Analysts concerned that the high inflation data out today, along with the low housing report, portends poor business conditions for American Express and other credit card firms.
Wellcare Health Plans (WTG), finally a gainer, up $4.13. The company's $35 million payment to U.S. authorities regarding accounting errors is an indication to investors apparently the company is moving to put a government probe behind it and that's a positive.
Federated Investors (FII) up $1.30. The board has declared a special $2.76 percent (ph) cash dividend, bringing its total third quarter payments to $3 even. The board also approved a new five million share stock buyback.
Las Vegas Sands (LVS) tumbling $5.40. Macau casino stocks are down on reports China may again tighten visa restrictions on its citizens visiting Macau. That could hurt Las Vegas Sands because 60 percent of its revenues are from the Macau operation.
Albany International (AIN) off $4.41. Eclipse Aviation, a major customer, is cutting production of its Eclipse 500 jet and reducing purchases of components from a subsidiary of Albany International.
And Saks Inc (SKS) down $0.93, traded as low as $9.60, widened its second quarter loss to $0.23 a share versus a loss of $0.17 last year.
NASDAQ's most active, Apple (AAPL) down $1.86. The company is working to fix a connection problem in its iPhone with a patch.
Intel (INTC) $0.42 loss there.
Google (GOOG) down $7.80.
Research in Motion (RIMM) fell $1.06.
Microsoft (MSFT) more minus signs, down $0.26.
Staples (SPLS) was off $1.03. It issued a profit warning for the second quarter and also cut full year earnings estimates.
Cisco Systems (CSCO) down $0.25.
Baidu.com (BIDU) bucking the trend with $1.59 gain.
Qualcomm (QCOM) off $0.55.
UAL Corp (UAUA) down $1.37, the higher oil prices hurt the airlines.
Finally, Concurrent Computer (CCUR) losing $1.27, big percentage drop. The company had a fourth quarter loss of $0.12 a share on a 9 percent drop in sales. The Street was looking for $0.12 in earnings, not a loss.
Those are the stocks in the news tonight.
