49 pts is now a tumble?
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DJ UPDATE: US Stocks Tumble, With Circuit City Among Decliners
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(Adds information on stock prices and companies' news beginning in the ninth paragraph.)
By Karen Talley
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--As stocks pulled back after interest-rate enthusiasm waned, Meridian Gold shone, Circuit City Stores short-circuited, and FedEx fell after delivering bad news.
The Dow Jones Industrial Average dropped 48.86 points, or 0.4%, to 13766.70 after rising 412.14 points over the prior two sessions as investors basked in the central bank's big rate cut. The Standard & Poor's 500 Index on Thursday dropped 10.28, or 0.7%, to 1518.75. The Nasdaq Composite Index lost 12.19, or 0.5%, to 2654.29. The New York Stock Exchange Composite Index slipped 34.43, or 0.3%, to 9936.47.
"You had merging concerns today, about oil over $83 a barrel and the price of gold rising, which is a reflection of a weak dollar and inflationary concerns," Sam Rahman, head of North American equities at Baring Asset Management. "It took the shine off of the euphoria of the last couple of days."
Meridian Gold gained 2.08, or 6.4%, to 34.51. Yamana Gold boosted the cash portion of its hostile takeover offer for fellow miner Meridian and cut the level of support needed for the $3.3 billion proposal to go forward amid waning shareholder backing. Yamana rose 18 cents, or 1.4%, to 12.66, with both stocks part of a strong gold group that saw the precious metal settle at $732.40, a nearly 28-year high.
Circuit City Stores lost 1.90, or 18%, to 8.67, its lowest level in more than four years as it marked its biggest percentage drop in five and a half years. The consumer electronics retailer swung to a wider-than-expected fiscal second-quarter loss, highlighting its struggles to update stores and hold onto sales amid the shining of rival Best Buy, which on Tuesday posted better-than-expected quarterly earnings and raised full-year earnings guidance. With the drop, Circuit City assumed small-cap status, now carrying a market-capitalization of $1.46 billion, below the $1.5 billion cut-off this column uses to gauge whether a stock is large or small.
FedEx lost 3.06, or 2.8%, to 104.45. The package-delivery giant posted a 4% increase in fiscal first-quarter earnings, topping Wall Street expectations, but warned that a soft U.S. economy will weigh on its performance for the rest of the fiscal year.
Carnival was buoyed by a rise of 1.23, or 2.6%, to 48.53. The cruise ship operator posted a 12% rise in third-quarter pretax profit, despite higher fuel costs eating into margins, and will increase its share-buyback program by $422 million, to $1 billion.
Volume on the New York Stock Exchange was 1.27 billion shares. Down volume exceeded up by 888 million to 374 million, and stocks that fell in value exceeded those that rose by 2,337 to 986.
U.S.-traded shares of China Eastern Airlines soared past the 100 mark with a gain of 26.24, or 28%, to 121.24. The Chinese airline and Chinese plane maker AVIC I have entered into a joint venture to start operating a regional carrier next year, state press China Daily reported.
Herman Miller (Nasdaq) fell 1.48, or 5.1%, to 27.60. The office furniture maker forecast second-quarter earnings and revenue that fell below analysts' estimates.
The two major investment banks that reported results experienced reversals of fortune.
Goldman Sachs dropped 1.97, or 1%, to 203.53, after being up as much as 2.7%. Shrugging off major disturbances in the credit and mortgage markets, the investment bank reported a 79% surge in fiscal third-quarter net income amid record revenue.
And Bear Stearns ended with a loss of just 18 cents, or 0.2%, after being down as much 1.5%, closing at 115.46. The big brokerage posted a 61% drop in fiscal third-quarter net income on a big drop in fixed-income trading revenue and $200 million in hedge-fund losses.
Nasdaq Stock Market rose 49 cents, or 1.4%, to 36.51 on the Nasdaq, after being up as much as 8.3%. Dubai plans to buy a 20% stake in the electronic exchange in a four-way pact also involving exchanges in London and Stockholm. The stock faded on word that President Bush said the deal would be carefully scrutinized for national-security implications, amid similar calls by members of Congress.
Kohl's lost 77 cents, or 1.3%, to 58.55. On the heels of announcing plans to buy back up to 13% of its stock at current valuations, Standard & Poor's and Fitch Ratings cut their credit ratings for the retailer, saying credit-protection metrics will weaken as the company shifts to a more aggressive financial strategy.
Electronic Arts (Nasdaq) rose 86 cents, or 1.5%, to 56.42. The videogame maker is looking for a partnership or acquisition in Japan to achieve greater penetration in the second-biggest gaming market after the U.S., the Financial Times reported.
Clarcor lost 4.89, or 12%, to 34.92. The filtration and industrial-packaging product company's industrial and environmental-filter unit reported disappointing third-quarter sales, weighed down by delayed shipments of new manufacturing equipment and the elimination of low-margin customers.
Motorola rose 47 cents, or 2.7%, to 17.82. Cowen & Co. upgraded the stock to outperform from neutral, saying the handset maker could see some improvement in the crucial North American market during the third quarter.
Dow industrial General Motors fell 51 cents, or 1.5%, to 34.47. Talks between the auto maker and the United Auto Workers union were said to have resumed amid reports that the UAW's president has decided to temporarily shelve talk about the union taking over retiree health care.
Ford Motor lost 15 cents, or 1.8%, to 8.25. The auto maker has extended by two weeks the deadline for submitting bids to buy its Jaguar and Land Rover brands, the Detroit News reported.
Benetton Group's American depositary receipts rose 2.71, or 8.8%, to 33.36. Deutsche Bank raised its rating on the shares to buy from hold, saying the turnaround the fashion retailer has achieved should allow it to boost both its revenue and operating margins in the medium term.
Tribune lost 41 cents, or 1.5%, to 27.37. The media conglomerate's August consolidated revenue fell 5.2% to $391 million, from $413 million a year earlier.
Alexandria Real Estate Equities fell 3.73, or 3.7%, to 96.16. The real estate investment trust plans a follow-on public offering of 2 million shares.
Cytec Industries rose 56 cents, or 0.8%, to 69.56. Goldman Sachs followed up a meeting with management by reaffirming what it calls the chemical and material company's attractive turnaround story.
-By Karen Talley, Dow Jones Newswires; 201-938-5106; karen.talley@dowjones.com
(END) Dow Jones Newswires
September 20, 2007 17:18 ET (21:18 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.- - 05 18 PM EDT 09-20-07 |
