Macro Woes in Focus (LEN, NFLX, GR, UTX, COL, RAH, CAG, IPGP, JKS)
Stocks slid on the day, dragged down by renewed worries concerning Greece and news that President Obama is looking to propose new taxes. Greece could run out of money by next month, and the IMF told the country that it must implement the agreed upon reforms to receive its next 8 billion euro ($11 billion) rescue payment. Greece’s finance minister said the country would do what it takes, but IMF officials seemed peeved. President Obama, meanwhile, is looking to let the Bush tax cuts for couples making over $250,000 expire, to place limits on certain deductions, and to close certain loopholes and subsidies for oil and gas companies. He is also looking to cut $580 billion on mandatory benefit programs such as Medicare and Medicaid. Despite the European and political wrangling, stocks did close off their lows, but the five-day winning streak did come to an end.
The Laser Stocks Index was the top performing tickerspy Index on the day, led by IPG Photonics (IPGP) with a 5% gain. The Chinese Solar Stocks Index was the day’s worst performing tickerspy Index, with JinkoSolar Holding (JKS) down -28%.
Stocks traded lower on the day, with the Dow falling -108 points to 11,401. The S&P lost -12 points to 1,204, while the Nasdaq slipped -9 points to 2,613. Oil fell -$2.26 to $85.70 a barrel, while gold dropped -$35.80 to $1,778.90 an ounce.
In economic news, the National Association of Homebuilders said homebuilder sentiment fell one point in September to 14 from 15. Economists were expecting a reading of 15. Readings below 50 are considered poor.
In earnings news, homebuilder Lennar (LEN) said its fiscal third-quarter profit slipped -31% to $20.7 million, or 11 cents a share, from $30 million, or 16 cents a share, a year earlier. Revenue fell -1% to $820.2 million. Analysts were expecting a profit of 11 cents a share on revenue of $794.4 million. The company said it expects to be profitable in the fourth quarter and for the full year. Shares of Lennar rose 4.9%.
Shares of movie rental firm Netflix (NFLX) fell -7.4% after the company said it will separate its movie streaming business from its DVD rental service. The streaming business will keep the Netflix brand. The DVD-by-mail service will be named Qwikster and Netflix said customers who subscribe to both services will see no pricing changes and two separate debits on their credit card statements — one from Netflix and one from Qwikster. More than 40 pros held Netflix in their portfolios at the end of Q2 and nearly 1,100 tickerspy members own the stock in their portfolios.
Shares of aircraft parts maker Goodrich (GR) surged 15.8% on speculation Dow component United Technologies (UTX) is mulling a takeover offer for the company. Sources told Reuters that United Technologies is looking to secure $10 billion to $20 billion in financing to make an offer for Goodrich. Shares of Rockwell Collins (COL), which had been considered another potential UTX takeover candidate, meanwhile, fell -4.2% on the news. Twenty-two pros held Goodrich in their portfolios at the end of Q2 and nearly 140 tickerspy members own the stock in their portfolios.
Shares of cereal maker Ralcorp (RAH) slipped -1.3% after the company rejected a $5.17 billion takeover from food maker ConAgra (CAG). Ralcorp has rejected multiple bids from ConAgra since March. Nebraska-based ConAgra cannot pursue a hostile bid because Ralcorp instituted a poison pill plan earlier this year.
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