China Growth Decline in Focus (ARCO, MCD, NATR, ARCL, BP, NGLPF, DQ)
Stocks traded lower, spurred by China reducing its 2012 growth target to 7.5%. The Chinese economy grew 9.2% last year and 10.4% in 2010. The reduced target hit material stocks particularly hard, while tech names also lagged. A weaker-than-expected Eurozone PMI reading also weighed on the market. That said, the intraday rally in the Dow to near breakeven was a positive.
The Geothermal Stocks Index was the top performing tickerspy Index on the day, led by Nevada Geothermal Power (NGLPF) with a 15% gain. The Chinese Solar Stocks Index was the day’s worst performing tickerspy Index, with Daqo New Energy (DQ) down -9%.
Stocks fell on the day, led by a -26 point, or -0.9%, decline in the Nasdaq to 2,950. The Dow fell -15 points to 12,963, while the S&P lost -5 points to 1,364. Oil edged up 2 cents to $106.72 a barrel, while gold fell -$5.90 to $1,703.90 an ounce.
In economic news, the Institute for Supply Management said its services index rose to 57.3 last month from 56.8 in January, topping the reading of 56.1 economists expected. Elsewhere, the Commerce Department said factory orders fell -1.0% in January, good for the largest decline in 15 months. Non-durable goods orders rose 3.1%.
In earnings news, shares of Arcos Dorados Holdings (ARCO), the world’s largest McDonald’s (MCD) franchisee, plunged -7.5% despite the company saying its fourth-quarter profit rose 12% to $46.2 million, or 22 cents per share, from $41.2 million, or 17 cents per share. Revenue climbed 11% to $958.5 million. The company forecast a 2012 revenue increase of 15%-17%, which works out to $4.21-$4.28 billion. Analysts were expecting sales of $4.07 billion. Seven pros counted Arcos Dorados among their top holdings at the end of Q4 and more than 60 tickerspy members own the stock in their portfolios.
Shares of Nature’s Sunshine Products (NATR) surged 16.0% after the company posted a fourth-quarter profit of $7.6 million, or 48 cents a share, compared with a year earlier loss of -$700,000, or -4 cents per share. Revenue increased 2% to $92.1 million, with sales of its Synergy Worldwide brand up 31% to $25.9 million. A single covering analyst had been looking for EPS of 25 cents on sales of $92.6 million.
Shares of education software maker Archipelago Learning (ARCL) soared 22.7% after the company agreed to be acquired by privately held rival Plato Learning for $291 million. Plato Learning’s offer of $11.10 per share is 23% higher than the stock’s Friday closing price.
Shares of BP (BP) jumped 1.0% after Europe’s second-largest oil company agreed to pay out at least $7.8 billion as part of a settlement related to the 2010 Gulf of Mexico oil spill. BP said the funds will come from the $20 billion compensation fund the company set up following the spill. BP still must face claims from federal and state governments and some partners on the Macondo well project. Sixty-three pros held BP in their portfolios at the end of Q4 and nearly 2,100 tickerspy members own the stock in their portfolios.
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