A Band-Aid on Gangrene (CNC, ES, ZAZA, HES, FB, PCRX, UEC)
A plan to help bail out Spanish banks by the EU initially lifted the market, but by the end of the day, stocks were trading decidedly lower. The concern is that the deal is like putting a band-aid on a gangrenous limb when amputation is what is ultimately needed before the infection spreads. Despite last week’s market rally, Europe remains an overhang as the EU continues to just kick the can down the road without any real solutions to its problems.
The Pain Management Stocks Index was the top performing tickerspy Index on the day, led by Pacira Pharmaceuticals (PCRX) with a 7% gain. The Uranium Stocks Index was the day’s worst performing tickerspy Index, with Uranium Energy (UEC) down -10%.
Stocks dropped on the day, with the Dow falling -143 points to 12,411. The S&P sunk -17 points to 1,309, while the Nadsaq plunged -49 points to 2,810. Oil fell -$1.40 to $82.70 a barrel, while gold rose $5.40 to $1,596.80 an ounce.
In earning news, shares of Centene (CNC) plunged -22.2% after the health insurance provider lowered its full-year profit forecast to $1.45-$1.65 a share from $2.64-$2.84. Analysts had been expecting a profit of $2.68 a share before the announcement. Five pros counted Centene among their top holdings at the end of Q1 and nearly 30 tickerspy members own the stock in their portfolios.
Shares of EnergySolutions (ES) tumbled -54.9% after the company pared its 2012 earnings before interest, taxes, depreciation and amortization, or EBITDA, to $130-$140 million from $150-$160 million. The company also named a new CEO. Four pros counted EnergySolutions among their top holdings at the end of Q1 and nearly 130 tickerspy members own the stock in their portfolios.
Shares of independent oil producer ZaZa Energy (ZAZA) surged 21.9% after the company said it will end exploration and development accords with Hess (HES) in the Eagle Ford Shale in South Texas and in France as well. The companies will also swap certain oil, gas and mineral interests, well bores, and production. As a result, ZaZa’s land holdings in the Eagle Ford shale will rise to about 72,000 net acres and it will also receive a $70 million payment from Hess on top of a $15 million payment already received.
Facebook (FB), the largest social media company, had 158 million unique visitors to its site in April, up just 5% from April 2011. The rate was down from 24% growth in April 2011 and 89% growth in April 2010, according to comScore. Shares of Facebook fell -0.4%.
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