Markets Lower, Closing News 4/13/12

Markets spent the day in negative territory in reaction to slowing growth in China and lower than expected consumer sentiment.


Q1 Chinese GDP fell to 8.1% down from 8.9% in the previous quarter.  This marks a three year low for China’s economy.


Investors were forced to keep a close eye on the euro zone debt situation; the Spanish government bonds came under renewed pressure after data showed the country's banks borrowed heavily from the European Central Bank in March and bond yields moved higher.


The University of Michigan Confidence Index was 75.7, lower than the expected 76.2, showing a pullback in the faith of the U.S. economic recovery particularly after recent disappointing employment numbers.  U.S. consumer prices eased a bit in March, as much tamer energy costs hinted at lighter inflation pressures heading into the spring; the March Consumer Price Index was in line at +0.3%.


This was the worst week for the Dow since mid-September; Nasdaq had its worst week in 2012.


Hope your Friday the 13th was not an unlucky one.  Happy weekend.


Market Indices/Statistics:



  • Dow closed down 136.99 pts/-1.05% to 12,849.59

  • S&P closed down 17.31 pts/-1.25% to 1,370.26

  • Nasdaq closed down 44.22 pts/-1.45% to 3,011.33

  • 28 of the 30 Dow stocks closed lower

  • All 10 S&P 500 sectors closed down

  • Consumer Staples was the least negative sector (-0.09%); Financials was the biggest laggard (-2.52%)

  • The VIX was up 2.35 to 19.55

  • Oil is down $0.75 to $103.35

  • Nat Gas is down $0.002 to $1.981

  • Gold is down $21.60 to $1,65.00

  • Euro vs. Dollar is down $0.011 to $1.3073

  • Dollar vs. Yen is up $0.05 to $80.89

Companies in the News:


Barnes & Noble Inc. (BKS, -$0.20/-1.8% to $10.78) was in focus today after the company introduced a new NOOK Simple Touch with GlowLight, which is the first e-book device to offer the capability to read in the dark.  The NOOK Simple Touch can also be used at the beach.


Coinstar Inc. (CSTR, +$4.51/+7.4% to $65.78) moved up on increased Q1 and FYE guidance.  Q1 revenue expectations are now $567-$569.2 million up from $530-$555 million vs. expectations of $537.7 million.  EPS are now expected to be $1.62-$1.66 per share vs. expectations of $0.90.  Higher sales at the company’s Redbox kiosks and lower card processing fees are driving earnings expansion.


Chipotle Mexican Grill (CMG, +$7.18/+1.7% to $440.40), Panera Bread (PNRA, +$0.53/+0.3% to $162.33) and Yum Brands (YUM, +$1.99/+2.8% to $72.86) were all bright spots in today’s trading as each company received analyst ratings increases and higher price targets.


Dow Chemical (DOW, +$0.53/+1.6% to $33.20) shares were higher after the company announced that the board approved a 28% increase in its quarterly dividend thanks to confidence in the growth of its core business which is expected to translate into higher earnings.


There was some focus on videogaming companies after NPD Group reported that March videogame sales are down 25% year over year.  Without a blockbuster game, videogame companies are hurting as consumers shift to more mobile games and apps.  GameStop Corp (GME, -$0.33/-1.5% to $21.23) and Activision Blizzard (ATVI, -$0.11/-0.9% to $12.42) both traded lower.


Sony Corp (SNE, -$1.37/-7.3% to $17.36) traded down after the company’s new CEO, Kazuo Hirai, met with a disappointing reaction from investors over hearing his plan for the company’s recovery.   Mr. Hirai announced plans to push into the smartphones arena; grow its games and cameras business; and cut its waning television offering.


Earnings


JP Morgan Chase & Co. (JPM, -$1.63/-3.6% to $43.21) reported EPS of $1.31 vs. expectations of $1.18; revenue was $27.4 billion, 6.3% higher than the $25.8 billion reported in the year ago period. Improved trading and mortgage businesses drove earnings higher while better credit quality and increased loan demand also helped.  Shares were under pressure today on macroeconomic concerns, particularly the continued financial troubles in Europe.


Wells Fargo & Co. (WFC, -$1.18/-3.5% to $32.84) reported EPS of $0.75 vs. expectations of $0.73; revenue was $21.6 billion, 6.4% higher than the $20.3 billion reported in the year ago period.  Wells Fargo also gained on a stronger mortgage business but shares were hurt by a slowdown in the company’s cost cutting efforts and worldwide growth concerns.


Coming Monday:


Economic Reports:  April Empire Manufacturing (18.0 expected), March Retail Sales (+0.3% expected) at 8:30 a.m.; Feb. Business Inventories (+0.6% expected) and April NAHB Housing Market Index (28 expected) at 10:00 a.m.  Earnings:  Charles Schwab Corp. (est: $0.15), CitiGrp Inc. (est: $0.99), Gannett Co. Inc. (est: $0.31), M&T Bank Corp. (est: $1.47), Seaspan Corp. (est: $0.24), Triangle Petroleum Corp. (est: $-0.03), Brown & Brown Inc. (est: $0.34)


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