Markets Lower, Closing News 6/6/11

Markets closed lower for the fourth consecutive session as the Dow finished the day 61 points lower. The continued sell-off was because of continued concerns over last week’s data and reports that a German official denied a second Greek bailout was finalized. The S&P closed at 1,286.17, below the key technical resistance level of 1,295, causing some bears to believe that the sell-off will continue.

Pedro Passos Coelho, the Prime Minister of Portugal, reaffirmed his commitment to the bailout terms, and announced he may make deeper cuts than the austerity measures required by the EU and IMF. Pressure is mounting on Greek Prime Minister George Papandreou after 80,000 people protested in a public square in Athens, and reports leaked that a German official suggested a second Greek bailout was not yet finalized. Papandreou is presenting the austerity plan, unpopular with many Greeks, to his council tomorrow, before it is sent to the full Greek Parliament on Wednesday.

Oil fell below $100 a barrel today because of concerns about the economic recovery. OPEC is expected to meet later in the week, and will discuss increasing supply because of concerns that the high price of oil is hurting demand. Natural Gas traded 2.2% higher today on the hot weather expected in the coming weeks.

The wedding dress from the British royal wedding will be on display at Buckingham Palace from July 23 through October 3, giving the Duchess of Cambridge’s admirers a chance to see the dress in person. Also on display will be the Royal Wedding cake, and somewhere within the exhibition lies a Seinfeld joke about eating old Royal Wedding cake...

Market Indices/Statistics:

  • Dow closed down 61.30 pts/-0.50% to 12,089.96
  • S&P closed down 13.99 pts/-1.08% to 1,286.17
  • Nasdaq closed down 30.22 pts/-1.11% to 2,702.56
  • 23 of the 30 Dow stocks closed lower / 7 closed higher
  • All ten S&P 500 sectors closed lower
  • Energy was the worst performing sector (down 2.03%)
  • The VIX is up 0.54 pts to 18.49
  • Oil is down $1.38 to $98.83
  • Nat Gas is up $0.109 to $4.816
  • Gold is up $2.20 to $1,544.60
  • Euro vs. Dollar down $0.0053 to $1.4573
  • Dollar vs. Yen down $0.11 to $80.10

Companies in the News:

Ocwen Financial closed lower today (-1.60% to $12.30) after announcing a deal to acquire the outstanding partnership interests of Litton Loan Servicing from Goldman Sachs. The purchase price is $273 million in cash, and Ocwen will enter into a $2.47 billion credit facility to finance the deal.

Peruvian companies tumbled today after Ollanta Humala won the Presidential election, causing investors to speculate that the left-winged candidate could push for nationalization of business in Peru. The stock exchange in Lima closed down over 12%, and Credicorp (-18.81% to $82.55), Compañia de Minas Buenaventura(-14.96% to $35.75), and Southern Copper Corp. (-11.35% to $30.78), the three NYSE-listed Peruvian companies, also closed significantly lower.

Acorn International announced this morning that the Board of Directors has received and is considering a tender offer from Bireme Limited (a company whose two largest shareholders are the CEO of Acorn, and the co-founder and Chairman of the Board’s wife) for $6.00 per ADS. ATV shares closed lower (-0.34% to $5.78) on the day.

Dollar Thrifty Automotive shares also fell (-2.28% to $81.83) on tender offer news. DTG’s Board of Directors recommended that shareholders take no action on Hertz Global Holding’s tender offer, citing the uncertainty surrounding the regulatory process.

Earnings:

Claude Resources Inc. shares slid today (-4.43% to $1.94) after reporting Q1 earnings before the bell. CGR reported Q1 earnings per share of C$0.01 per share, below the C$0.05 per share that analysts were expecting.

Hudson Pacific Properties Inc. also fell (-1.44% to $15.03) after announcing they updated their FY view. HPP revised their FY11 guidance down from $1.01-1.06 to $0.99-1.04 because their previous guidance did not include transactions that have been completed, including an 11.1 million share issuance.

Coming Tuesday:

Economic Reports: None; Earnings from: Pep Boys, Navistar International, Talbots, and Hovnanian Enterprises


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