Stock market: worst quarter since 2008
September 30, 2011
Stock market ends on down note over renewed worries about Europe. The S&P 500 stock market index has lost 14.3 percent in the third quarter. The worst quarter for the stock market since the financial crisis ended on another down note.
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Stock market ends on down note over renewed worries about Europe. The S&P 500 stock market index has lost 14.3 percent in the third quarter.
The worst quarter for the stock market since the financial crisis ended on another down note.
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Stocks fell broadly Friday on fresh signs that Europe’s debt problems and the U.S. economy continue to languish. Makers of raw materials, industrial companies and banks — which would have the most to lose if the economy turns sour — had the biggest losses.
The Dow Jones industrial average dropped 240.60 points, or 2.2 percent, to 10,913.38. Hewlett-Packard Co. fell the most of the 30 stocks in the average, 5.6 percent. Aluminum maker Alcoa Inc. was close behind with a 4.9 percent decline. JPMorgan Chase & Co. fell 4.1 percent.
The broader S&P 500 index shed 28.98, or 2.5 percent, to 1,131.42. All 10 industry groups in the S&P 500 index fell.
The Nasdaq composite index fell 65.36, or 2.6 percent, to 2,415.40.
Markets have been wracked this summer by growing fears about a possible default by Greece and the increasing likelihood of a global recession. Uneven economic data have touched off sudden bouts of buying and selling. The Dow, S&P 500 and Nasdaq each lost more than 12 percent this quarter, the first time that’s happened since the financial crisis crested at the end of 2008.
The S&P 500, the benchmark for most U.S. stock mutual funds, has lost 14.3 percent since July 1, the start of the third quarter. That’s the biggest quarterly drop since the three months ended Dec. 31, 2008, when global financial markets seized up. Excluding that period, the S&P has not dropped that much in a quarter for nine years. The Dow dropped 1,500.96 points, or 12.1 percent, over the same time frame.
“The market has really seen some damage this quarter,” said Mike Hurley, portfolio manager of Highland Trend Following Fund.
The weakness appears to be the start of a longer decline, Hurley said, because bonds are increasing in value and interest rates are low. Traders also are selling commodities such as oil, which would lose value in an economic downturn.
“Lower interest rates and commodity prices are definitely an indication that the market thinks economic activity is going to be weak,” Hurley said.
Stocks in France, England and Germany fell on the latest signs of discord among European leaders. Germany and France proposed managing the region’s shared currency through meetings of national leaders, rather than by centralized institutions. The head of the European Commission balked at the proposal.
Persistent squabbling over financial policy has been a major obstacle to achieving a lasting solution to Europe’s debt crisis. France and Germany, the currency union’s strongest economies, want countries to coordinate their spending and borrowing more closely. Other countries see that as a threat to their sovereignty.
Many European leaders and traders believe Greece will default in the coming weeks or months. Greece’s lenders and neighbors are preparing as best they can to prevent that from causing a worldwide financial panic.
As a result, traders have reacted strongly to news and rumors out of Europe about how the crisis is being addressed. Markets gyrated wildly this summer in some of the most volatile trading on record. The Dow Jones industrial average swung more than 100 points in more than half of the trading days this quarter.
Traders also have made big moves in response to U.S. economic data, which has mostly suggested a slowdown. A recession in the U.S. looks increasingly likely, mainly because of Europe’s struggles and signs of weakness in developing countries like China that have been driving global economic growth.
The government said Friday U.S. consumers spent slightly more in August, but earned less for the first time in nearly two years. That suggests that people are tapping their savings to pay for costlier gasoline and to offset lost wages. The savings rate fell to its lowest level since late 2009.
Micron Technology Inc. plunged 14 percent, the most of any company in the S&P 500 index, after the chipmaker disappointed investors with a quarterly loss. Analysts had expected a profit. Sales were hurt as the company transitions to selling a newer array of memory chips.
Ingersoll-Rand dove 13 percent after cutting its profit forecast for the third and fourth quarters. The machinery maker said North American sales of climate-control and security products have been weaker than expected.
Bank of America Corp lost 3.6 percent after Warren Buffett told Bloomberg Television that the bank’s problems will take longer than a year to clean up.
Four stocks fell for every one that rose on the New York Stock Exchange. Volume was above average at 4.7 billion shares.
OTTR Stock Crowded With Sellers
September 30, 2011
In trading on Friday, shares of Otter Tail Corp. (NASD: OTTR) entered into oversold territory, changing hands as low as $18.40 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100.
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In trading on Friday, shares of Otter Tail Corp. (NASD: OTTR) entered into oversold territory, changing hands as low as $18.40 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In the case of Otter Tail Corp., the RSI reading has hit 29.8 — by comparison, the universe of energy stocks covered by Energy Stock Channel currently has an average RSI of 41.1, the RSI of WTI Crude Oil is at 38.8, and the RSI of Henry Hub Natural Gas is presently 38.1.
A bullish investor could look at OTTR’s 29.8 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.
Looking at a chart of one year performance (below), OTTR’s low point in its 52 week range is $18.40 per share, with $23.48 as the 52 week high point — that compares with a last trade of $18.52. Otter Tail Corp. shares are currently trading down about 1.5% on the day.
According to the ETF Finder at ETF Channel, OTTR makes up 1.17% of the Global Listed Private Equity Portfolio ETF (AMEX: PSP) which is trading lower by about 2.3% on the day Friday.
See what other ETFs contain OTTR »
See what other stocks are held by PSP »
OTTR operates in the Electric Utilities sector, among companies like Empresa Nacional de Electricidad S.A. (Chile) (NYSE: EOC) which is off about 2.2% today, and Xcel Energy, Inc. (NYSE: XEL) trading lower by about 0.4%. Below is a three month price history chart comparing the stock performance of OTTR, versus EOC and XEL.
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5 Stock Quickfire: Buy, Sell, or Hold?
September 30, 2011
[unable to retrieve full-text content]I revisit five previous stock picks to give you the lowdown on whether they are still worthy investments.
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[unable to retrieve full-text content]I revisit five previous stock picks to give you the lowdown on whether they are still worthy investments.
Berkshire Bought $4B in Common Stock in Q3
September 30, 2011
[unable to retrieve full-text content]Warren Buffett’s Berkshire Hathaway Inc. added about $4 billion in common stock to its investments during the third quarter, taking advantage of undervalued equities as stock markets slid.
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[unable to retrieve full-text content]Warren Buffett’s Berkshire Hathaway Inc. added about $4 billion in common stock to its investments during the third quarter, taking advantage of undervalued equities as stock markets slid.
Aeropostale Should Be A $19 Stock As It Makes Global Moves
September 30, 2011
$18.75 target With the Aeropostale’s stock hitting a new 52-week low, the desperate teen apparel retailer has announced the launch of international shipping with partner FifyOne. [] The move will allow international consumers in more than 90 countries to purchase directly from Aeropostale.com in their local currency. We believe that Aeropostale is targeting two objectives with this deal.
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$18.75 target
With the Aeropostale’s stock hitting a new 52-week low, the desperate teen apparel retailer has announced the launch of international shipping with partner FifyOne. [] The move will allow international consumers in more than 90 countries to purchase directly from Aeropostale.com in their local currency.
We believe that Aeropostale is targeting two objectives with this deal. First, the company is trying to diversify globally after a continuing to struggle this year in the domestic market. Second, and more importantly, Aeropostale is trying to improve its margins by increasing the share of Internet sales to its net sales.
Aeropostale together with Abercombie & Fitch and American Eagle Outfitters form the triad of teen apparel retail.
See our complete analysis for Aeropostale stock here
U.S. Sales Struggling
A lack of balance in the merchandise assortments for Q2 caused net sales to decline by 5%, with comp sales dropping by 14%. The situation was exacerbated by a dismal performance in the crucial back to school season. With the U.S. economy standing on the brink of yet another recession and the consumer spending expected to decrease, Aeropostale has been forced to look out for options internationally.
The move to expand via e-commerce channel makes sense as it requires much lesser investments when compared to retail channel.
Internet Sales Will Boost Margins
Shrinking margins is the biggest source of concern plaguing Aeropostale at the moment. Gross margin declined by over 10% in Q2 due to rising production costs and an increase in promotions to attract customers. To address the falling margins, the company has now focused on Internet sales which carry higher margins than retail sales.
Aeropostale does have a decent Internet ambit, having a loyal Facebook fan base with over 5 million fans across the globe. We expect the margins to improve as the share of Internet sales to the overall sales increase.
We have revised our $18.75 price estimate for Aeropostale stock, which is nearly double the current market price. The decline in our price estimate primarily reflects a weak long-term growth outlook and sales adjustments after a disappointing back to school season.
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Dollars Connecting With Services Stocks, AMZN, NFLX, LVS, GOOG, IBM Report Otcstockriot.com
September 30, 2011
Amazon.com, Inc. broke even at $222.44 in today’s trading.
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Dollars Connecting With Services Stocks, AMZN, NFLX, LVS, GOOG, IBM Report Otcstockriot.com
Dollars Connecting With Services Stocks, AMZN, NFLX, LVS, GOOG, IBM Report Otcstockriot.com
September 30, 2011
Amazon.com, Inc. broke even at $222.44 in today’s trading.
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Dollars Connecting With Services Stocks, AMZN, NFLX, LVS, GOOG, IBM Report Otcstockriot.com
What a Dick (NYSE: BAC) (NYSE: JPM) Report Otcstockriot.com
September 30, 2011
NEW YORK – U.S. Senator Dick Durbin has unwittingly caused the banking industry and consumers nightmares while catering to stores like Wal-Mart. But this little game that Durbin played for his corporate chum Wal-Mart may come to an ironic end
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What a Dick (NYSE: BAC) (NYSE: JPM) Report Otcstockriot.com
Special Delivery from the Stock Market (ARII) (SAIA) (HUBG) (VLCCF) (MIC) Report Otcstockriot.com
September 30, 2011
American Railcar (ARII) soared 10.26% higher, moving up $1.5 to $16.12 per share. Shares of American Railcar have traded as high as $28.74 per share and as low as $13.68 in the last year.
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Special Delivery from the Stock Market (ARII) (SAIA) (HUBG) (VLCCF) (MIC) Report Otcstockriot.com
Special Delivery from the Stock Market (ARII) (SAIA) (HUBG) (VLCCF) (MIC) Report Otcstockriot.com
September 30, 2011
American Railcar (ARII) soared 10.26% higher, moving up $1.5 to $16.12 per share. Shares of American Railcar have traded as high as $28.74 per share and as low as $13.68 in the last year. Saia Inc.
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Special Delivery from the Stock Market (ARII) (SAIA) (HUBG) (VLCCF) (MIC) Report Otcstockriot.com
