Paul Kangas' Stocks in the News
Tuesday, October 07, 2008
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PAUL KANGAS: A firm start and a miserable finish: that was how the day played out on Wall Street. Stocks opened slightly higher on optimism over the Fed's backstop of the commercial paper market. But stocks had reversed course by the time Fed Chairman Bernanke gave his gloomy economic outlook this afternoon, and the selling after that was sharp and swift right into the closing bell. The Dow Industrial Average plunged 508.39 points, ending at 9,447.11. That is its lowest level since the summer of 2003. The NASDAQ Composite tumbled 108.08 points to 1,754.88. Standard & Poor's 500 Index plummeted 60.66, ending at 996.23. Over in the bond market, the 10-year note fell 13/32 to 104 2/32, putting the yield at 3.51 percent.
Big Board volume leader on 30.6 million shares, General Electric (GE) losing $1.08.
Followed by Bank of America (BAC), off $8.45. Late today, the company said it sold 455 million of its shares at a price of $22 even. Part of the is going to be used for the Merrill Lynch (MER) acquisition.
Citigroup (C) down $2.26 in the weak banking sector.
Pfizer (PFE) down $1.29 there.
JPMorgan Chase (JPM) fell $4.68.
Morgan Stanley (MS) off $5.85, and traded as low as, believe it or not, $14. There were rumors that Mitsubishi (MTU) would pull out of its agreement to acquire up to 25 percent of the voting shares. Morgan Stanley says the deal is still on track.
Merrill Lynch (MER) plunging $6.20. Analysts at Wachovia widened their third-quarter loss estimate for Merrill from $1.03 to $6.12, and they see a full-year loss of $12.50 a share.
IBM (IBM) losing $4.97. Barclays downgraded it from overweight to just equal weight.
And then Ford Motor (F) losing $0.77 to close at $2.92. That's the lowest close since 1983. The company is cutting its vehicle production in Europe.
Advanced Micro Devices (AMD) up $0.36. The company is going to spin off its manufacturing plants into a $5.7 billion joint venture with Abu Dhabi in its investment corporation. That's to better compete with rival Intel (INTC).
General Growth Properties (GGP) plunging $3.25, that's almost 42 percent of its value. Yesterday Standard & Poor's cut the company's credit ratings, noting that it was about -- it had about $1.2 billion of debt coming due by the end of the year and no clear plan as to how to handle it.
Landry's Restaurants (LNY) off $2.35. Fertitta Company's CEO said because of the deterioration of casual dining and gaming industries, his firm's $21 a share buyout bid for Landry is in jeopardy. He is talking about financing the deal with Jefferies (JEF), but at a much lower price.
Advance Auto Parts (AAP) losing $5.77. Third-quarter sales up lower than expected, 2.6 percent. The company sees third-quarter earnings at $0.57 a share. That's well below the Wall Street estimate of $0.66 a share.
Safeway (SWY) lived up to its name today -- in the market, anyway, up $1.08. Third-quarter earnings a bit higher at $0.46 versus $0.44 last year. Same-store sales up 2.8 percent. Standard & Poor's repeated a buy recommendation.
Apple (AAPL) topped the NASDAQ active list, down $8.98.
And Google (GOOG) tumbled $25.20. Stifel Financial cut its price target on Google from $600 a share down $525, and cut its third-quarter earnings estimate from $5.11 down to $4.78 a share.
Microsoft (MSFT) off $1.68.
Research In Motion (RIMM) down $4.61.
Cisco (CSCO) down $1.62.
And finally, shares in First Solar (FSLR) tumbled $31.71 after Goldman Sachs downgraded the stock from buy to sell.
