Close the Door on a Terrible Q3 (MU, IR, VRUS, CF, MOS, P, ISS)
Stocks ended a poor quarter on a down day, as the major market indices tumbled into the close. The market was hit with several negative data points overseas, including news that Chinese manufacturing shrank for a third-straight month. German sales, meanwhile, fell the most in over four years and European inflation checked in at the fastest pace in nearly three years. The economic news out of the U.S. was much better, but not enough to turn the negative tide in the market today. We’re expecting a much better Q4 than Q3, albeit the bar is set very low.
The Radio Stocks Index was the top performing tickerspy Index on the day, led by Pandora Media (P) with a 10% gain. The Chinese IT Stocks Index was the day’s worst performing tickerspy Index, with iSoftStone Holdings (ISS) down -15%.
Stocks plunged on the day, with the Dow falling -241 points to 10,913. The S&P lost -29 points to close at 1,131, while the Nasdaq tumbled -65 points to 2,415. Oil dropped -$4.45 to $82.90 a barrel, while gold fell -$2.10 to $1,625.00 an ounce.
In economic news, personal incomes fell -0.1% in August. Economists expected an increase of 0.1%. Personal spending, meanwhile, rose 0.2% for the month after jumping 0.8% in July, in line with estimates. Elsewhere, the Thomson Reuters/University of Michigan final September reading of consumer sentiment checked in at 59.4, up from the previous estimate of 57.8. Economists expected no change from the first September reading. The August reading was 55.7.
In earnings news, shares of Micron Technology (MU) plunged -14.1% after the chipmaker posted a fiscal fourth-quarter loss of -$135 million, or -14 cents per share. Revenue dropped -14% to $2.14 billion. Analysts had expected a profit of a penny a share on revenue of $2.11 billion. Twelve pros counted Micron among their top holdings at the end of Q2 and nearly 700 tickerspy members own the stock in their portfolios.
Shares of Ingersoll-Rand (IR) tumbled -12.1% after industrial products maker cut its full-year profit and revenue forecasts. Ingersoll-Rand now expects a full-year profit of $2.70-$2.80 a share on revenue of $14.85-$15.0 billion, down from previous estimates for EPS of $2.90-$3.10 on revenue $15.3-$15.5 billion. Analysts were expecting a profit of $2.94 a share on revenue of $14.8 billion. The company also slashed its third-quarter profit forecast to 77-80 cents a share from 85-95 cents.
Shares of biotech firm Pharmasset (VRUS) surged 6.6% after positive data for the company’s Hepatitis C drug, PSI-7977 was released. The treatment is viewed as one of the most compelling Hepatitis C treatments currently in development.
Shares of fertilizer makers CF Industries (CF) and Mosaic (MOS) slid -12.5% and -9.7%, respectively, after a USDA crop report showed a surprise increase in corn inventories. Corn futures plunged by more than -6% on the news. Fifty pros held Mosaic in their portfolios at the end of Q2 and nearly 1,900 tickerspy members own the stock in their portfolios.
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