Stock Market News
Last month, Velocity Shares Daily 2x VIX Short Term ETN (NYSEARCA:TVIX) fell 61% over the course of three days from 22 to 26 March. Though the stock has somewhat recovered from its bottom of $5.90, it is currently only trading at $7.04, a far cry from $17 in early March and over $30 at the start of the year. (TVIX is currently down 77% for the year.)
The Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) are now looking into the matter. Credit Suisse, which manages TVIX, said that it was cooperating with the authorities.
Last week, Research in Motion Limited (NASDAQ:RIMM) traded between $13.50 and $14.10, until Friday, when it rallied by 7.5% to close at $14.70. This followed the comments by new CEO Thorsten Heins (who took over at the beginning of the year) in response to the disappointing fourth-quarter performance announced on Thursday.
Last Friday, chip maker Intel (NASDAQ:INTC) closed at $28.11, marking a 0.86% gain for the week. Intel, which has been on an upwards trajectory since the start of the year, is currently up 14.5% for 2012. On 22 March, the company announced a 21 cents per share (84 cents per share on an annual basis) quarterly dividend on its common stock.
Last Friday, Cisco Systems, Inc. (NASDAQ:CSCO) closed at $21.15, marking a 3% rise for the week. Since early March, the stock has been on an upward trajectory, registering an 8.6% climb in the preceding weeks. Cisco is currently up 15.9% for the year. The network equipment maker, which has been trying to boost growth after market-share losses to rivals, is currently on an aggressive technology acquisition. Moreover, CEO John Chambers is looking to add more profitable products as part of a turnaround plan undertaken last year, when he cut jobs and eliminated businesses.
Bank of America (NYSE:BAC) closed at $9.57 last Friday, marking a 2.84% drop for the week. After making dramatic increases in January and early March, the bank has been trading in the $9.50 - $10.00 region since mid-March. BAC is currently up 75% for the year, which is largely attributed to increased investor confidence about its balance sheet. CEO Brian Moynihan has been shedding assets and businesses that are deemed non-essential to the company, such as its Canadian credit card business and a stake in China Construction Bank.
US economic data this week was mostly positive and, though international data painted a more sanguine view, helped push US markets to close the week higher. Once more, the Nasdaq starred, with Apple (NASDAQ: AAPL) pushing strongly through the $600 mark before closing slightly below on Friday. The Nasdaq has improved by 21% this quarter, whilst the Dow Jones has added 7% and the broader S&P 500 12%.
Last Friday, global biopharmaceutical company Bristol Myers Squibb Co. (NYSE:BMY) closed at $32.96, marking a 0.18% gain for the week. The stock is currently 6.6% down for the year. Starting off at $35 in January, it experienced a big drop in the succeeding two months, bottoming out at $31.85 in mid-February, before making moderate gains in recent weeks.
KB Home (NYSE:KBH) fell 8.45% to close at $10.29 last Friday. This also marked a 19.4% drop for the week. Nonetheless, the stock is actually still up 53% for the year, having peaked at $13.06 in mid-March, after which it began to fall to the current price. Last week’s dramatic price drop was the result of disappointing first-quarter results. For the quarter ended 29 February, KB Home reported a loss of $45.8 million, or 59 cents a share, compared with a year-earlier loss of $114.5 million, or $1.49 a share.
Window dressing refers to a strategy adopted by some mutual fund and portfolio managers to improve their fund performance, usually near the year or quarter end, before presenting it to clients or shareholders. This could be done in several ways. Firstly, the fund manager could sell stocks with large losses and purchase high-flying stocks before the quarter end. For example, stocks such as Nvidia, KLA-Tencor, Micron, Tesoro and Netflix (that are up more than 20% year-to-date) would probably face upward pressure in the coming days.
News Corporation (NASDAQ:NWSA) closed at $19.79 last Friday, marking a 0.35% gain for the week. Notwithstanding its ongoing legal troubles, News Corp has been trading around $18.6 - $20.29 for the past three months. Since the outbreak of the phone hacking scandal last year, the stock has bottomed out at $13.62 in August 2011, before recovering ever since. The stock is now up 10.7% for the year.
Last Friday, telecommunications giant AT&T (NYSE:T) closed at $31.52, marking a 0.6% loss for the week. Earlier in the week, the stock has been on the rise, peaking at $31.96 on Wednesday, before easing for the rest of the week. AT&T, which is currently up 7.6% for the year, has been on an upward trajectory in recent weeks, since bottoming out at $29.16 in late January.
Apple Inc. (NASDAQ:AAPL) continued its impressive stock performance last week, at one point breaching the $600 mark. (The stock peaked at $609.58 on Wednesday.) On Friday, Apple eased at $596.05, marking a 0.55% drop for the week. In fact, the stock has been on an upward trajectory since early 2009, and has been making excellent monthly gains since last December. (The stock is up 47% for the year.) Apple is also currently the largest company by market capitalization.
Last week, Hercules Offshore Inc. (NASDAQ:HERO) had a bit of a roller-coaster ride at the stock market. (Hercules Offshore Inc. is a provider of shallow-water drilling and marine services to the oil and natural gas exploration and production industry.) On Tuesday, the company announced its agreement to pay a subsidiary of Diamond Offshore Drilling Inc. $40 million in cash for the Ocean Columbia, an offshore drilling rig that will be used for a three-year drilling contract with Saudi Aramco. The contract is expected to generate total revenue of $160 million.
I just did an interview with David Frazier of integrativeinvesting.com. David combines both technical and fundamental indicators to forecast movements in the stock market and make investment decisions.
David sees this correction of the past few days as nothing to get all worked over and sees opportunities in China, Brazil, and homebuilding and banking stocks in the US.
Rentech, Inc. (NYSE:RTK) a provider of clean energy solutions, closed at $2.00 last Friday, posting a 7.5% gain for the week. Since the start of the year, the stock has risen by 51.5%. (In fact, Rentech has been on an upward trajectory since bottoming out at $0.75 in early October 2011.)
Last Friday, Paramount Gold and Silver Corp. (NYSE:PZG) closed at $2.25, marking a 6.25% loss for the week. Last week's performance was primarily due to the declining gold prices over the week. Since trading above $2.70 in February, Paramount has been declining ever since, although it is currently still up 9.2% for the year. A natural resource company, with a market cap of $308 million, Paramount is involved in the acquisition, exploration and development of gold, silver and other precious metals in the US and Mexico.
Last Friday, Chimera Investment Corporation (NYSE:CIM) fell by almost 3% to close at $2.95, also marking a 2.3% loss for the week. While the stock is still up 15.7% for the year, having been on an upward trajectory since early January, it has been rather volatile, trading between $2.51 and $3.12 in the past three months.
JPMorgan & Chase Co. (NYSE:JPM), the biggest and most profitable US bank, closed at $44.57 last Friday, marking an 8.6% gain for the week. The stock surged 7% on 14 March, after the company's announcement that it has received regulatory approval for a 20% dividend increase. The company's rally also helped lead financial stocks in the Standard & Poor’s 500 Index (SPX) to a 5.9% gain.
Last Wednesday (14 March), wireless broadband operator Clearwire Corp. (NASDAQ:CLWR) announced that it has signed Cricket cell service parent Leap Wireless as a customer for its new network. According to Clearwire, the deal will see it supplementing Leap Wireless' own network with the fourth-generation Long Term Evolution technology over a five-year period. The news pushed up the stock by 2.1% to close at $2.19. There were subsequent gains in the rest of the week, with the stock closing at $2.27 on Friday.
The Dow Jones moved above 13000, to a level not seen since December 2007, and the S&P500 passed through 1400 for the first time since the summer of 2008 as inflation remained subdued and retail sales picked up. The technology sector saw the Nasdaq hit its highest level since late 2000.
Armour Residential REIT (NYSE:ARR) experienced a 3.36% drop last Friday, ending at $6.80. ARR, which has been trading above $7 from last December, has not dropped to this level since October 2011. This was primarily due to the company's announcement on Friday that it was commencing an underwritten public offering of 26 million shares of common stock. ARR said that it planned to use the net proceeds of the offering to "acquire additional agency securities as market conditions warrant and for general corporate purposes."
Last Friday, videogame maker Activision Blizzard Inc. (NASDAQ:ATVI) closed at $11.91, marking a 2.06% gain for the week. After bottoming out in early March, the stock is now down 3.17% for the year. The sharp drop of 2.25% on 1 March came about after the Santa Monica, Calif. game maker announced that it was cutting a tenth of its workforce, even though it pointed out that an overwhelming majority of the job cuts were not “related to game development”. Activision also emphasized that the layoffs have already been factored in its earnings forecast and will not affect its results this year.
Last Tuesday, pharmaceutical giant Merck & Co. (NYSE:MRK) posted its estimates of first-quarter profits, declaring that it would earn about 95 to 98 cents a share, excluding expenses associated to acquisitions and restructuring. This is slightly below the consensus estimate of $1.01 a share. The company also said that it expected its revenues this year “to be at or near 2011 levels on a constant currency basis. At current exchange rates, sales would be unfavorably affected by about 2-3%.” (Merck’s calculations are based on an exchange rate of $1.31/euro.)
Last Friday, Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) fell by 15.7% to end at $52.59, also marking a 23% drop for the week. After rising to $70.65 in mid-February, the stock has been on the decline ever since. Stocks of the single-cup coffee machine maker slumped on Friday after Starbucks said that it would sell its own single-cup machine (Verismo).
After falling by around 2% on Wednesday as worries over the Greek debt swap deal weighed, equity markets recovered to end the week flat, depressed by data from China but with optimism injected by a better than expected US jobs report.
Early in the week, markets were dominated by a number of bearish factors:
Blackberry maker Research in Motion Limited (RIM) (NASDAQ: RIMM) continued its decline last week, ending at $13.79, a 6.4% drop for the week. Since peaking at $17.57 in mid-January, the stock has been on a downward trajectory. With the company facing increased competition from rivals such as Apple and Samsung, many analysts are starting to lower their expectations in the run-up to the company’s earnings announcement on 29 March.
Last Friday, Rite Aid Corporation (NYSE:RAD) closed at $1.67, marking an 18.44% gain for the week. (The stock is up 34.7% since the start of this year.) Initially, there was only slight trading activity. However, trading volume subsequently spiked sharply later in the morning. In the end, about 15 million stocks were traded last Friday, more than double its usual intraday average of about 7.5 million stocks. While there has not been any confirmation of any company-specific news, there were some rumors that Walgreen Co.