Last week, Frontier Communications Corporation (NASDAQ:FTR), a provider of voice, data and video services to residential, business and wholesale customers especially those in the rural areas, continued its upward trajectory to close at $3.93, marking a 13.9% weekly gain. While the stock appears to have recovered from its doldrums in mid-May when it reached a record low of $3.06, it is also 18% below the recent peak of $4.78 set in mid-February.
Stock Market News
Facebook Inc. (NASDAQ:FB) finally had a brief respite from sliding stock prices when it delivered a 10.7% weekly gain, primarily brought about by a 6.1% single-day gain on Friday. Closing at $30, the stock is 21% down from its IPO price, although it also represents a 17.6% gain from its all-time low of $25.52 in early June.
Cisco Systems, Inc. (NASDAQ:CSCO) defied the general trend last week to deliver a 2.2% weekly gain. Closing at $17.10 on Friday, Cisco achieved a second consecutive weekly gain after bottoming out at $15.98 in early June. However, the stock is still down 6.3% for the year.
Last Friday, ATP Oil and Gas Corporation (NASDAQ:ATPG) rose 29.8% in a single day to close at $5.23, though the dramatic gain did not claw back the losses made earlier in the week. (Intraday trading saw the stock briefly cross the $6 mark.) Not only did the stock end 1.5% down for the week, it is also currently down 26% for the year.
In a week that saw the markets swing first one way then the other, equities managed to post gains of up to 1.7% as European authorities came to the aid of Spain’s banks, and the UK’s Chancellor signaled a pre-emptive move to shore up its own banking system.
"The central banks are preparing for coordinated action to provide liquidity," said a senior G20 aide familiar with discussions among international financial diplomats. His statement was confirmed by several other G20 officials.
Wall Street stocks jumped sharply on the news, with the S&P 500 and the Dow Industrials both up more than 1 percent. The euro added to gains and U.S. government debt prices fell, boosting yields."
"The problem is that Facebook has already gone and messed up its core value proposition. At the beginning, the potentially great thing about Facebook was that you could use it to share personal information, stories, and photos with your friends, replacing the “new baby” email blast and solving a real problem that people face in our data-heavy world."
Korn/Ferry International (NYSE: KFY) is trading down over six percent in pre-market action after the company posted disappointed investors with its earnings report yesterday after the close.
Although the company announced a net profit of 25 cents a share it said that it was unable to make an accurate prediction for next year's earnings due to "uncertainty and challenges facing the global economy and financial markets."
The price of US benchmark crude oil fell to $84.10 per barrel last Friday, following the release of weak economic data and no signs of further quantitative easing from the Federal Reserve. During mid-day trading, oil prices even fell to $82.89 at one point.
Newmont Mining (NYSE:NEM)’s recent weekly gains came to an end last week, when the stock delivered a flat performance to close at $50.28 on Friday. Newmont Mining, which is currently down 16.7% for the year, has been steadily rising after bottoming out at $43.23 in mid-May. The mining company’s lackluster stock performance was primarily due to disappointment over no indication of a new round of easing from Fed Chairman Ben Bernanke during his congressional testimony. Moreover, gold has also been losing its investment appeal lately.
Oracle Corporation (NASDAQ:ORCL) continued its upward momentum to close at $27.16 last Friday, marking a 4.5% weekly gain. Oracle, which has been steadily rising again after bottoming out at $25.38 in mid-May, is currently up 5.3% for the year. Last week’s gain was primarily due to Oracle’s announcement that it would, as part of its buying spree of web-based software, acquire text-mining and analytics software maker Collective Intellect. (Collective Intellect’s cloud-based software, whose clientele include Hasbro Inc., Nestle S.A.’s Nestle Purina PetCare Co.
Last Friday, Facebook Inc. (NASDAQ:FB) continued its weekly decline to close at $27.10, a 2.2% drop for the week. The stock, which is now trading at 28.7% below its IPO price of $38, hit an all-time low of $25.52 last Wednesday. With a current market cap of $58 billion, pre-IPO speculation of a $100 billion valuation only served as reminder of a cruel joke whereby media hype has overtaken market fundamentals.
Last Friday, Zynga Inc. (NASDAQ:ZNGA) eked out a 0.67% weekly gain to close at $6.05. The online game maker, which is currently down 35.4% for the year, hit an all-time low of $5.51 earlier in the week, before making some gains in the latter half. Given the current uncertainty about the long-term viability of the business models of many social media companies, investors are now looking out for signs of Zynga’s attempts to reduce its traditional reliance on the Facebook platform, as well as whether it has better game offerings in the pipeline beyond existing ones.
Last Saturday, Spain managed to secure a massive €100 billion (US$125) bailout loan from the euro zone’s finance ministers to prop up its banking sector, although it could not specify the exact amount it would require until two independent auditors had assessed the capital needs. This made the country the fourth euro zone member to seek assistance, after Greece, Ireland and Portugal.
Last week, Newmont Mining Corp (NYSE: NEM) continued its climb for the second consecutive week, closing at $50.30 on Friday. This marked a 3.4% weekly gain and continued upward momentum for the gold-mining stock since bottoming out at $43.44 in mid-May. Among the gold-mining stocks, Newmont stood out last Friday by rising 6.7% to buck the broader downward trend among equities and even recoup previous losses from a three-session decline. The stock, which is currently down 16.7% for the year, appears to have reversed its decline.
Groupon Inc. (NASDAQ:GPRN) continued its downward trajectory last week, closing at $9.69 on Friday. The stock, which is down 54.7% for the year, has been falling since early February, when it peaked around $24. Last week’s across-the-board decline, together with the domino effect from Facebook’s stock performance on all social media stocks, only increased the downward pressure on the online deals company.
Last week, Apple Inc. (NASDAQ:AAPL) failed to deliver a second consecutive weekly gain, having closed at $560.99, marking a 0.77% drop for the week. Nonetheless, given the across-the-board fall in stocks last week, it was still a notable performance. The tech giant appeared to have regained its footing after bottoming out at $530 in mid-May.
Online marketplace eBay Inc. (NASDAQ: EBAY) fell by 2.1% last week to close at $38.82 on Friday. The stock continued its downward trajectory that began in early May. While eBay, which has a market cap of $54 billion, is currently up 27.8% for the year, fears of an imminent slowdown in e-commerce spending in the US have been putting downward pressure on its stock price.
Social networking company Facebook (NASDAQ:FB) continued its downward price spiral after its IPO, closing at $27.72 on Friday, marking a 16% drop for the week. It fell again Monday to close below $27 for the first time, reinforcing views that many investors might have bought into the media hype, rather than the company’s true potential or fundamentals. Morningstar analyst James Krapfel, who advised investors to be cautious, said that the company “is likely to disappoint investors over the next 12 to 18 months.”
The Spanish government was put on the defensive last week amid growing concerns over the country’s ability to weather the economic turmoil, brought about by the state of its public finances and banking sector. On Saturday, Spanish PM Mariano Rajoy publicly reiterated his government’s commitment to stick to austerity measures “as long as is necessary”. Finance Minister Cristobal Montoro insisted to reporters that the government’s plan to curb its budget deficit was working.
A few days ago I did a promotion with Amazon.com to make the ebook version of my book Strategic Stock Trading free through Amazon.com until today at midnight. This morning the book hit the top 100 list of all free ebooks on Amazon.com.
It's a pretty amazing and humble thing for me to see this happen.
Yesterday gold and gold stocks were down even though the stock market was up. Some people were wondering what is up with that? There has been an assumption among many that the stock market correction that began over a month ago has been overdone and the market should just go up. Those people are ignoring the seriousness of the Greece debt situation and the potential of the European debt crisis to spread to Italy, Portugal, or Spain.
European and Asian economic data is weakening, but after a three week losing streak which has seen the Dow Jones Industrials slip by 6.5% firmer US economic data helped the ship steady this week, with the Dow posting a o.7% advance.
With Greece looking ever more likely to leave the Eurozone and default on its debts, the G8 meeting was hijacked by attempts to address these concerns. Unsurprisingly, the meeting came up with little more than a tacit agreement to do all in the group’s power to support Europe and the wider economy.
I got a free surprise for you at the end of this post.
Two big things have been happening over the past month. We've seen the Facebook IPO disaster and suffered through a pretty tough stock market correction. There are lessons to be had from both of these events and huge opportunities to actually profit from them.
What we are seeing in Facebook is one of the craziest things I've ever seen in the stock market, and I've seen a lot of crazy things over the years. Right now the company is engulfed in controversy and people are filing lawsuits only days after it went public and started to trade on the Nasdaq last Friday.
I just did this podcast with Jeff Pierce who runs the popular trading blog www.zentrader.ca. When I last talked with Jeff he was bullish and bonds and today the TLT 20-year Treasury Bond ETF is trading at new highs.
I got Jeff's thoughts on bonds now and the rest of the market.
Market Vectors ETF Trust (NYSE:GDX), the ETF for gold-mining stocks, fell by 1.75% last week, marking the third consecutive weekly decline. Closing at $41.62 last Friday, GDX has been on a downward trajectory since late February when it was still above the $57 level. The ETF, which is currently down 18.7% for the year, has also been down 9 of the past 11 weeks.