Markets Lower, Closing News 4/3/12

Markets were in negative territory all day but closed off their lows after being down 132 points on FOMC minutes that expressed little enthusiasm over pursuing additional quantitative easing measures.

The FOMC minutes showed that Federal Reserve officials saw moderate economic improvement but remain cautious on their outlook for the jobs market.  They did, however, leave room for the consideration of additional stimulus should the economic recovery stall or if inflation remains below the target 2% rate.  Officials continue to be committed to keeping interest rates at low levels until late 2014.

President Obama struck out against a federal budget adopted by House Republicans stating that “broad-based prosperity has never trickled down from the success of a wealthy few.”  He called the budget a “Trojan horse” that would greatly deepen inequality in the U.S.

Market Indices/Statistics:

  • Dow closed down 64.94 pts/-0.49% to 13,199.55

  • S&P closed down 5.66 pts/-0.40% to 1,413.38

  • Nasdaq closed down 6.13 pts/-0.20% to 3,113.57

  • 5 of the 30 Dow stocks closed higher

  • 1 of 10 S&P 500 sectors closed up

  • Utilities was the only positive sector (+0.05% each); Energy was the biggest declining sector (-0.98%)

  • The VIX was up 0.02 to 15.66

  • Oil is down $1.12 to $104.11

  • Nat Gas is up $0.018 to $2.170

  • Gold is down $31.80 to $1,647.90

  • Dollar vs. Euro is up $0.003 to $1.335

  • Dollar vs. Yen is down $0.220 to $81.84

Companies in the News:

CVR Energy Inc. (CVI, +$1.60/+5.9% to $28.80) was higher after Carl Icahn announced that about 55% of the outstanding shares of CVR Energy had been tendered, bringing him closer to a hostile acquisition of the company.  The expiration for the tender offer has been extended to April 30.  CVR Energy made a statement pointing out that Icahn cannot purchase the shares tendered in his offer and that those shares can be withdrawn at any time.  CVR Energy is calling for the shareholders to make the final determination during the company’s annual meeting when they will need to vote on directors.

General Motors (GM, -$1.22/-4.6% to $25.54) was under pressure after announcing a March sales increase of 11.8% which was lower than expectations.

Goldman Sachs (GS, -$2.19/-1.8% to $122.71) is in focus after-hours again today on reports that the labor union, American Federation of State, County and Municipal Employees, (“AFSCME”) disapproves with Goldman’s appointment of James Schiro as lead director; they feel he is not the right choice given his other board roles.

Ivanhoe Mines Ltd (IVN, -$1.20/-7.6% to $14.56) traded lower after analysts reduced their ratings on the company citing higher operating and capital cost projections at its Oyu Tologi gold and copper mine amid delayed production. 

Molson Coors Brewing Co (TAP, -$2.48/-5.4% to $43.18) shares were in the red after the company announced its intention to acquire European brewer StarBev for $3.54 billion.  The company is optimistic about its sales growth from new markets and sees $50 million in annual savings by 2015.  There were some negative comments made about the deal ranging from the cost Molson Coors paid to their diverting attention away from the U.S. market where beer demand has suffered.

Research in Motion (RIMM, -$1.37/-9.5% to $13.01) continues to struggle as it announced Mobile Fusion, the company’s next-generation mobile device management solution for enterprise customers which will provide a single web-based console for easily managing all devices. However, later in the morning, there were reports that NXP BV is suing Research in Motion for patent infringement. 

Coming Wednesday:

Economic Reports:  Mortgage Applications (-2.7% previously) at 7:00 a.m.; ADP Employment Change (206k expected) at 8:15 a.m.; ISM Non-Manufacturing Composite (56.8 expected) at 10:00 a.m.  Earnings:  Acuity Brands Inc. (est: $0.61), Monsanto Co. (est: $2.12), MSC Indus Direct Co. (est: $0.95), Harry Winston Diamond Corp. (est: $0.18), Tuesday Inc. (est: $0.16)

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