Equities Update: Stocks End Lower, Helped Modestly By Fed's Latest Pledge

by: Midnight Trader

4:21 PM, Aug 10, 2010 --

  • NYSE down 48 (-0.7%) to 7,139.75
  • DJIA down 54 (-0.5%) to 10,644
  • S&P 500 down 6.73 (-0.6%) to 1,121
  • Nasdaq down 28.5 (-1.2%) to 2,277


  • Hang Seng down 1.50%
  • Nikkei down 0.22%
  • FTSE down 0.63%


(+) MBI gains on improved quarter.

(+) PPCO sold to Endo for $144 Mln.

(+) QNST lifts sales outlook.

(+) AAU gains on drilling results.

(+) AKAM gets upgraded.

(+) RIMM strikes deal with Saudis.


(-) ABK reports another loss, exploring prepackaged bankruptcy.

(-) NUAN issues mixed Q3 report.

(-) NGLS selling notes.

(-) QGEN misses with sales.

(-) HQS down after latest results.

(-) FEED swings to a loss.

(-) JASO beats with revenue.


Stock indexes end down 0.5% to 1.2%, off earlier lows in the wake of the Federal Reserve's latest statement pledging more help for the economy. Stocks began the day lower, when disappointing productivity data before the bell combined with a downturn in Chinese import demand.

The Fed maintained lending rates at historic lows and said it would reinvest proceeds from maturing mortgage-backed securities into Treasury bonds. Wall Street analysts said the action reassured investors that the bank is willing to keep liquidity flowing as the recovery has shown its vulnerability in recent months.

The Fed now believes economic growth will be "more modest" than it had anticipated at its late June meeting. The Fed, citing "subdued" inflation, said it would keep its target for a key interest rate at zero to 0.25 percent for a "extended period," the AP reported.

A pre-market report showed a decline in workforce productivity in Q2 after an upwardly revised Q1. The report showed U.S. non-farm productivity fell 0.9% compared to the 0.4% expected. The first quarter was revised up to 3.6% from 2.8%, the report said.

In company news:

Bank of America (NYSE:BAC) could get $13 billion from it stake in China Construction Bank Corp., which had an original cost of $9.2 billion according to a Bloomberg News report. BofA couldn't sell the shares because they were locked up, the report said. Now that lockup is expiring and accounting rules say the bank will need to value the stake at a market value of $22.1 billion, the report said.

In the pharma space, a new study of patients who receive Vertex Pharmaceuticals (NASDAQ:VRTX) hepatitis C drug revealed the vast majority of previously untreated patients who respond early to telaprevir are cured in half the time of current therapy, according to a Reuters report.

Wendy's/Arby's Group (NYSE:WEN) said it will open 180 restaurants in Russia over the next 10 years, according to a Reuters report. The move is the latest from a U.S. fast-food chain to look to Russia for new growth, the report said.

Oracle Corp. (NASDAQ:ORCL) Chief Executive Officer Larry Ellison came down hard on Hewlett-Packard (NYSE:HPQ) for ousting HP CEO Mark Hurd. The move came following an investigation of a sexual harassment claim that revealed Hurd had not violated HP's sexual harassment policy, Reuters reported. But the CEO was said to have been fired for falsifying expense reports to hide his relationship with an HP contractor.

Research in Motion Ltd (RIMM) is up after Saudi Arabia said it will allow the the BlackBerry maker to continue operating in the country. Research in Motion has, however, been asked to put a system in place that will allow the government to monitor use.

Wal-Mart Stores Inc. (NYSE:WMT) was lower after J.P. Morgan Securities released a study showing the famed discounter has been raising prices. Based on a study of stores in Virginia, J.P. Morgan said Wal-Mart raised prices at its Supercenter by 5.8%, the biggest increase since it started tacking prices in January 2009.

Intel Corp. (NASDAQ:INTC) was falling in step with other chipmakers, including rival Advanced Micro Devices Inc (NYSE:AMD), after a JP Morgan analyst expressed concern about a slowdown in the personal computer market. Analyst Christopher Danely stated that PC orders are "falling off a cliff."

International Business Machines (NYSE:IBM) said it had purchased Datacap Inc., a privately held software company. Datacap's software helps companies capture, manage and automate the flow of business information. Financial terms were undisclosed.

CVB Financial (NASDAQ:CVBF) is down sharply after the company says it got a subpoena from the SEC, MarketWatch reports. The July 26 subpoena from the Los Angeles office of the SEC requests information about CVBF's loan underwriting guidelines, its allowance for credit losses and the way the bank calculates its allowance for loan losses, according to a quarterly regulatory filing on Monday.

Google's (NASDAQ:GOOG) South Korean office was raided by police as part of an investigation into possible breaches of privacy laws due to the company's data collected for its street view mapping service.

Evergreen Energy (EEE) says it approved a reverse split of its common shares at a ratio of 1-for-12 to be effective August 20. Shares of several companies were moving after earnings announcements.

Delta Petroleum (DPTR) shares were lower after the company said late Monday it lost $0.54 per share in Q2, smaller than the loss a year ago but wider than the Thomson Reuters mean for a $0.09 loss. Sales were $36 million, more than forecasts for $34.2 million.

InterContinental Hotels Group (NYSE:IHG) was falling in pre-market trade even though the British group reported returning to the black in the first half of the fiscal year. InterContinental reported pretax pforit at $141 million, compared to a net loss of $29 million a year ago.