Tuesday's Closing Update: Broadly Lower

4:14 PM, Jun 16, 2009 --

• NYSE down 80.50 (1.4%) to 5,886.76.
• DJIA down 107.5 (1.3%) to 8,505.
• S&P 500 down 11.7 (1.3%) to 911.97.
• Nasdaq down 20 (1.1%) to 1,796.

GLOBAL SENTIMENT

• Hang Seng down 1.8%
• Nikkei down 2.56%
• FTSE up 0.06%

DOWNSIDE MOVERS

(-) BBY reports EPS below year ago though tops Street; backs FY EPS view that straddles Street mean.

(-) PCX selling shares.

(-) CPST extends evening decline.

(-) SPPI selling shares to institutional investors.

(-) T gets analyst downgrade.

(-) SFD swings to Q4 loss on lower sales.

(-) LEA government aid and auto company payments.

(-) APWR swings lower after pre-market.

UPSIDE MOVERS

(+) MSFT gets analyst downgrade.

(+) TEL trading near new extended-hours highs in continued reaction to raised guidance.

(+) EMKR inks NASA contract.

(+) CDII inks new contract.

(+) MRNA says it's repaid all debt to GE Capital.

(+) LZB extends after-hours gain seen on surprise report of profit.

(+) GSK gets FDA extension for leukemia drug.

(+) SOAP okays liquidation plan.

MARKET DIRECTION

The major averages end broadly lower for a second session, with each shedding around 1% Tuesday. Stocks end near the bottom of the day's range, reversing morning gains that followed mixed economic news. Consumer and energy stocks were leading decliners, while banks were also lower.

Stocks opened higher after positive housing construction and wholesale price reports were better than expected, but a larger-than-expected drop in industrial production pared the morning's advance.

U.S. housing starts bounced back in May, rising 17.2% to a seasonally adjusted annual rate of 532,000 after plunging 12.9% in April. Building permits rose 4% in May.

The May producer price index rose 0.2%, below the 0.5% rise that Wall Street expected. Core PPI, which strips out food and energy costs, fell 0.1%, less than the 0.1% the Street was looking for. For some analysts, the decline indicated that much of the hand-wringing over inflation may be premature.

In the day's third report, a larger-than-expected 1.1% drop in May industrial production also suggested that the economy remained weak last month. The drop, which was the seventh straight, was also the deepest since a 1.8% plunge in March.

Individual movers included Best Buy (BBY), as Wall Street appeared to focus more on same-store sales results over the bottom line. BBY said Q1 adjusted EPS were $0.42 vs $0.43 a year earlier and topping the Thomson Reuters mean analyst estimate for $0.34. Revenue rose to $10.1 billion from $9 billion a year earlier and in line with the Street view. However, same-store sales fell 6.2% vs a gain of 3.7% in the same period a year earlier. The company maintains its FY 2010 guidance, expecting EPS of $2.50 to $2.90 ex-charges. The Street is at $2.79.

Nucor (NUE) was up after it predicted a Q2 loss that was smaller than analysts' expectations. It says it expects to lose between $0.55 to $0.65 per diluted share in Q2 compared with a loss of $0.60 in Q1 and earnings of $1.94 a year ago. The Thomson Reuters average analyst estimate is a $0.70 per share loss.

STEC (STEC) firmed after raising its Q2 non-GAAP EPS outlook to $0.32 to $0.36, versus the previous guidance of $0.20 to $0.22 and versus the average analyst estimate at Thomson Reuters of $0.21. Sales are now seen between $82 million to $84 million, versus the previous estimate of $68 million to $70 million. The average analyst estimate is $69.05 million. The raised outlook is primarily the result of increases in ZeusIOPS sales which now are estimated to exceed $55 million.

Comments

[tunaman4u2:]

Isn't it funny that the maximum point of green shoots, inflation, get in before its too late was the worst time to buy?
Classic

Jun 16 06:02 PM

[frosty:]

VIX is on the move again ahead of quadruple witching day. Does this and the two day tumble foretell a BIG selloff on Friday?

Jun 16 07:45 PM

[sg hammer:]

Since May 15th, the S7P 500 has been locked in a narrow 2 point range. Ranges don't last forever and typically some exogenous event triggers either pent up selling or buying. My work suggests that the recent trading range has been broken and that we're in for a 4-6 week down cycle.

Jun 16 08:00 PM

[chleoku:]

Market enters volatility and more dips will be coming especially this week:

www.wealthalchemist.co.../

this correction is expected to be aroun 15%-30%

Jun 16 08:18 PM

[jgbooker:]

I think sg hammer and chleoku are correct, we are probably going to see a correction of about 20% that will take until the end of July to finish.

Jun 17 07:10 AM

[Snitzer:]

From the bottom looking up: This newbie investor/trader thinks short term down is good, allowing portfolio building on the cheap. Following strong feelings that now, if ever, is the time to enter the market, I jumped in early April, and then, after I actually learned to read charts, discovered I'd managed to miss the bottom by about a month. But then, what do I know? Hopefully more, with time.

Jun 17 09:46 AM