CIT Tumbles 75% on No Bailout
Stocks close up today after most of today's trading was tightly range bound. The Dow soared to 8,730 from 8,607 around
The Nasdaq showed an even greater percentage gain (1.19% v. 1.11%) to close up 22 points and finish the day at 1,885. The S&P 500 closed at 940, up 8 points on the day.
The Russell 2000 was 7 points to close at 523.
The volume leader in the small-cap space include
Small-cap gainers were lead by ARCA biopharma (Nasdaq:
That was a terrific rally yesterday. Intel's (Nasdaq:INTC) earnings truly were a surprise. We've now seen the two biggest up days in 6 weeks come on consecutive days. The major indices had been looking weak, but not anymore.
JP Morgan (NYSE:JPM) is the latest company to beat earnings expectations. But let's not forget that it's widely believed that analysts really low-balled the company earnings estimates across the board for the 2nd Quarter, so companies should be besting them.
What matters is guidance going forward. That's why Intel's news was so surprising.
*****China's 2nd Quarter GDP number is out. The country grew at 7.9%, and may hit 10% by the 4th Quarter. Industrial production and fixed asset investment grew strongly.
Several banks upped their growth forecasts for China today.
I've seen some concern that lending is getting too loose in China and that a disaster is waiting to happen. But I'm not worried about that right now. China's government has showed in the past that it's pretty good at clamping down on lending standards when the economy gets too hot.
(If you're interested in tapping into the run-up in China stocks, check out my new report. Click here for your copy.)
*****Despite all the good news this morning, the chinks in the armor are clear to see. The number of households facing foreclosure was up 15% in the first half of the year. As many 336,000 homeowners received a foreclosure notice in June.
Year over year, foreclosure filings were up 33% in June. And they were up 5% just since May.
Foreclosures are on the rise despite the government's $50 billion program to assist loan modifications for troubled mortgage holders.
This will no doubt weigh heavily on banks that still have outsized exposure to the sub-prime market and reinforces our strategy of looking for investment opportunity outside the housing and financial sectors, JPM and GS notwithstanding.
Ian Wyatt
Editor
P.S.-Just yesterday I released the updated Predictions Issue for Top Stock Insights readers. Find out which sectors and stocks will be hot over the next six months and which ones to stay far, far away from. Click here for more
Small caps remain lower after short-lived data bounce
Small-cap stocks opened lower, slightly trimmed losses after the Consumer Confidence report came out at 10:00 a.m. ET, but then retreated right back to pre-release levels. The report showed an upward revision to the March report, which provided a brief bid to the market, but it was not enough to catch hold (at least immediately). At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was down 1.84, or 0.25%, at 723.53.
The Consumer Confidence report was pegged at 62.3 in April, which was in line with the forecast of 62, but the March number was revised upward to 65.9 versus 64.5. Still, the April figure was the lowest in five years.
Next on line … President Bush is slated to hold a press conference at 10:30 a.m. ET, where he is expected to talk about the economy.
The opening action was soft in line with overnight declines on a dip in European shares as Deutsche Bank posted its first quarterly loss in five years, and French tire company Michelin tumbled 9% on sloppy earnings.
Large-cap companies influencing trade this morning included drug company Merck & Co. (NYSE:MRK), which was down 7% on news that the FDA rejected a new cholesterol drug. From an overall stock market picture, the news had a somewhat muted impact, because it lifted Merck competitor Abbott Labs (NYSE:ABT) by 4%. In addition, Visa (NYSE:V) posted decent earnings ahead of the opening, but the financial firm was down 3% in early action.
The S&P 500 stalled approaching the 1,400 level on the latest push upward, and that key figure resistance will be closely watched through the rest of the week’s major economic events. In the Russell 2000, the market yesterday climbed . . .
Angiotech Pharmaceuticals falls to 52-week low, expects Q3 loss
Shares of Angiotech Pharmaceuticals Inc. (Nasdaq: ANPI) have sunk to a 52-week low following news before the start of trading that the company expects a third-quarter net loss and has lowered its fiscal 2007 outlook.
A slowdown in sales will result in a net loss for the three months ended Sept. 30, the Vancouver-based specialty pharmaceutical and medical device company announced today. Wall Street was projecting a profit of $0.06 per share, according to a poll of eight analysts by Thomson Financial.
Angiotech said it expects revenues of $68 million for the quarter, 11.5% lower than the $76.8 million projected by analysts. Significantly, the company reported that the sales revenue from certain new products will show up during the first part of 2008, not as expected in the second half of 2007.
Consequently, full year 2007 adjusted EBITDA outlook range was lowered to between $47 million and $50 million, compared with a previous forecast of between $85 million and $95 million.
The final results for the third quarter will be released on Nov.1.
At 3:29 p.m. ET, Angiotech Pharmaceuticals (ANPI) shares had lost $2.60, or 35%, to $4.93, a new 52-week low. The previous 52-week low was $5.28, established on Apr. 2. The 52-week high of $9.81 was set on Oct. 19.
Russell 2000 in free fall
The Russell 2000 (NYSE: IWM) is posting steep losses as investors react to news of poor earnings and more credit fears. At 1:37 p.m. ET, the small-cap index was down 13.78 points, or 1.67%, to 811.25. The Dow Jones Industrial Average (INDU) had retreated 2098.26 points, or 1.5%, to 13,680.70.
The bears have been running the show ever since Wachovia Corp. (Nasdaq: WB) reported before the opening that its third-quarter profit fell 10% due to difficult credit market conditions.
Charlotte, N.C.-based Wachovia, the fourth largest U.S. bank, also said that it recorded a provision for credit losses of $408 million, about four times the level during the same three months of 2006.
Contributing to more poor earnings news was heavy equipment maker Caterpillar Inc. (NYSE: CAT), which announced that quarterly profit missed analysts’ forecasts. The company forecasts that the ongoing slump in the U.S. housing sector will result in a 12% drop in sales of machinery and engines in 2007. Peoria, Ill.-based Caterpillar expects international sales to pick up the slack.
In commodities news, the price of oil has eased $1.43 to $88.04 a barrel. The recent spike in oil prices was partially attributed to tensions along the border between Iraq and Turkey and the weakness of the U.S. dollar.
