Buying Opportunities Emerging Amid Market Overreaction? (CTRP, ADM, PH, OMX, SNCR, ECPG)

Despite the debt ceiling being raised, stocks took it on the chin today, as personal spending unexpectedly fell in June; the fear of a U.S. debt downgrade continued to loom; and worries over Europe continue, with yields for Italian and Spanish bonds climbing. Retailers and industrials were particularly hurt by the news. We think the reaction to the personal spending data is a big overreaction, as retailers put up huge June same-store numbers. The Japanese earthquake and tsunami is still impacting some of the economic data, particularly in the auto space, but today’s July numbers show that non-Japanese automakers are still seeing pretty good sales. With the Dow down eight days in a row, we think some good buying opportunities could start to be emerging.

The Telecom Customer Care Stocks Index was the top performing tickerspy Index on the day, led by Synchronoss Technologies (SNCR) with a 22% gain. The Bill Collector Stocks Index was the day’s worst performing tickerspy Index, with Encore Capital Group (ECPG) down -12%.

Stocks were walloped, with the Nasdaq plunging -75 points, or -2.8%, to 2,669. The Dow nosedived -266 points to 11,867, while the S&P dropped -33 points to 1,254. Oil fell -$1.10 to $93.79 a barrel, while gold jumped $22.80 to $1,644.50 an ounce.

In economic news, the Commerce Department said personal spending fell -0.2% in June, good for the biggest monthly drop since September 2009 and well below the increase of 0.1% economists were forecasting. Personal incomes rose 0.1% in June.

In earnings news, shares of Chinese online travel reservations firm Ctrip.com (CTRP) plunged -10.9% after the company forecast third-quarter revenue of $139.6-$145.7 million, below the $151.6 million analysts were expecting. For the second quarter, Ctrip said it earned 35 cents on a non-GAAP basis on revenue of $129.0 million. Analysts had been expecting a profit of 29 cents on revenue of $129.6 million.

Shares of Archer Daniels Midland (ADM), the world’s largest grain processor, slid -6.2% after the company said its fiscal fourth-quarter profit fell -15% to $381 million, or 58 cents a share, from $446 million, or 69 cents a share, a year earlier. Sales jumped 46% to $22.9 billion. Analysts were expecting a profit of 85 cents a share. Thirty-two pros held ADM in their portfolios at the end of Q1 and nearly 600 tickerspy members own the stock in their portfolios.

Shares of Parker Hannifin (PH) tumbled -8.5% after the maker of motion control products reported a fiscal fourth-quarter profit of $292.2 million, or $1.79 per share, compared with $222.2 million, or $1.35 per share, a year earlier. Revenue climbed 22% to $3.41 billion. Analysts were expecting a profit of $1.80 a share on revenue of $3.34 billion. Parker Hannifin forecast a fiscal 2012 profit from continuing operations of $6.70-$7.50 a share. Analysts were expecting $7.51. Twenty-one pros held Parker Hannifin in their portfolios at the end of Q1 and more than 160 tickerspy members own the stock in their portfolios.

Shares of OfficeMax (OMX) jumped 4.4% after the office supply company reported results that topped analyst estimates. For Q2, the retailer reported a loss of -$3 million, or -4 cents a share, compared with a year-earlier profit of $11.8 million, or 14 cents a share. Sales fell -0.3% to $1.65 billion, while same-store sales fell -0.5%. On an adjusted basis, OfficeMax earned 7 cents a share. Analysts were expecting break-even on revenue of $1.64 billion. For the current quarter, the company expects its operating income to be flat to slightly higher than the year-earlier period.

Tags: ADM, CTRP, ECPG, OMX, PH, SNCR