Closing Update for Monday, August 17: Global Sell-Off Visits U.S.

by: Midnight Trader

4:06 PM, Aug 17, 2009 --

  • NYSE down 185.6 or 2.8% to 6,352.25
  • DJIA down 184.9 or 2% to 9,137
  • S&P 500 down 24.4 or 2.4% to 979.70
  • Nasdaq down 54.7 or 2.8% to 1,931


  • Hang Seng down 3.62%
  • Nikkei down 3.1%
  • FTSE down 1.72%


(-) Lowe's (NYSE:LOW) misses with results, guidance.

(-) Home Depot (NYSE:HD) is lower in wake of LOW results; HD due to report in Tuesday's pre-market.

(-) Guaranty Financial (GFG-OLD) drops as regulators reportedly want bids for company by today.

(-) E*Trade (NASDAQ:ETFC) down as regulators delay decision on Citadel deal.

(-) Rosetta Stone (NYSE:RST) terminates plans for stock offering, cuts earnings view.

(-) First Solar (NASDAQ:FSLR) declines as Barron's article says upbeat earnings were likely the result of aggressive accounting.

(-) BB&T (NYSE:BBT) sets stock offering.

(-) Aeterna Zentaris (NASDAQ:AEZS) does not achieve statistical significance in drug for benign prostatic hyperplasia.

(-) SinoEnergy (SNEN) not in complience with debt covenants and reports quarterly loss.


(+) Coca-Cola (NYSE:KO) gets favorable coverage in Barron's.

(+) Protalix (NYSEMKT:PLX) says FDA OKs treatment protocol for gaucher disease.

(+) BioSante (BPAX) gives H1N1 vaccine presentation.

(+) Goldleaf Financial (GFSI) sold to Jack Henry & Associates.


Stocks end near session lows, coming under pressure throughout Monday's session on concerns the global economy could remain weak, particularly if consumers continue to show restraint. Asian and European stocks suffered. Chinese stocks recorded their steepest drop since November, overshadowing a stronger-than-expected U.S. regional manufacturing gauge. Today's stock decline is the steepest in some six weeks.

The New York Fed's Empire State Index registered at 12.1 for August, the best reading since November 2007, according to reports.

The global equity drubbing and firmer dollar took a toll on commodities trading. The slide in commodity prices pressured shares of companies like Alcoa (NYSE:AA), AK Steel (NYSE:AKS) and US Steel (NYSE:X).

Crude futures close regular trading lower though end off the worst levels of the day. September fell $0.76 to end at $66.75 a barrel on the New York Mercantile Exchange. The contract earlier touched an intraday low of $65.23 a barrel in electronic trading. Crude is trading just positive, up $0.10 at $66.85 early in the after-hours session.

Financial stocks declined following a swoon for the group in European trade. UBS (NYSE:UBS) reportedly may disclose details on thousands of US clients and although the bank may not pay fines, its clients may have to pay taxes and penalties.

Home improvement retailers were weaker after retailer Lowe's (LOW) reports Q2 earnings of $0.51 per share, down from $0.63 per share in the year ago quarter and shy of the Street view of $0.54 per share. Sales were down 4.6% to $13.8 bln, below expectations of $14.3 bln. The company also guided largely below the Street's view. Rival Home Depot (HD), which is due to report its results in the Tuesday pre-market session, fell in sympathy.

First Solar (FSLR) declined after being tugged by mixed reports. Jefferies & Co. analysts are backing their Buy rating on FSLR and disputing a largely negative Barron's article on the stock.

Barron's said the solar company's latest results were the result of aggressive accounting and actually show deteriorating cash flow. Jefferies' analysts said First Solar remains the "best positioned solar name due to its lowest cost structure" and that the company will likely offer 50% to 100% better margins than its peers, according to reports.

On the upside, health insurers like Aetna (NYSE:AET), Humana (NYSE:HUM) and Cigna (NYSE:CI), gained on talk that President Obama's administration will drop the public option in its plans to revamp health care in the United States.

In mergers and acquisitions, Goldleaf Financial (GFSI) rallied after it agreed to be bought by Jack Henry & Associates (NASDAQ:JKHY) for $0.98 per share.

Agilent Technologies (NYSE:A) is slated to report its Q3 results in the extended-hours today, and analysts polled by Thomson Reuters expect the company to report a profit of $0.11 per share on revenue of $1.01 billion.