Closing Update for Monday, August 31: Trimming August Gains

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Includes: AIG, ATVI, AZN, BBI, BJS, C, CMCSA, DCTH, ETFC, EXPD, GME, HUN, INTC, JCI, LDK, MDCO, MESA-OLD, MS, PACR, SVA, XPER
by: Midnight Trader

4:14 PM, Aug 31, 2009 --

  • NYSE down 65.8 (0.9%) to 6,643.24.
  • DJIA down 47.9 (0.5%) to 9,496.
  • S&P 500 down 8.3 (0.8%) to 1,021.
  • Nasdaq down 19.7 (0.9%) to 2,009.


GLOBAL SENTIMENT

  • Hang Seng down 1.86%
  • Nikkei down 0.40%
  • FTSE up 0.81%


DOWNSIDE MOVERS

(-,+) INTC lower for most of the day despite analyst raising price target, ekes into the green late.

(-) MS gets analyst downgrade.

(-) C down as Barron's article suggests profit-taking in issue.

(-) AIG down as Barron's says stock looks expensive.

(-) LDK loses early upside after signing pact with Chinese city for PV power projects.

(-) JCI loses upside from Barron's story saying stock may gain on continued demand for energy-efficient cars.

(-) CMCSA court rejects limit on market share for cable companies.

(-) EXPD no help from favorable Barron's coverage.

(-) ATVI no help from favorable Barron's coverage.

UPSIDE MOVERS

(+) TSRA remains lower after reports late Friday said company lost ruling.

(+) MDCO gains on data showing Angiomax reduces cardiac mortality.

(+) MESA gained amid reported challenge to Delta's dropped contract.

(+) BBI sells Irish retailer.

(+) PACR gets amended credit pact.

(+) SVA says H1N1 vaccine passes expert evaluation.

(+) ETFC gains after Citadel scraps share sale.

(+) AZN presents positive late results in coronary study PLATO.

(+) GME gets analyst upgrade.

(+) BJS sold to Baker Hughes.

(+) DCTH gets FDA orphan drug status for Doxorubicin.

MARKET DIRECTION

The major averages close down by less than 1%, clawing back from deeper losses earlier in the session. The DJIA will close August up 3.5% for the month, while the S&P 500 gains 3.4% and the Nasdaq Composite is up 1.5%.

Stocks fell as investors bail on financial stocks on advice from Barron's and weakness in Chinese markets trigger concern about the ability of the global economy to recover from the recession. Energy and consumer-discretionary stocks are leading on the downside.

Today's sell-off began with a sharp drop in Chinese equities and falling commodity prices on concerns that asset prices have outpaced economic realities. The Shanghai Composite Index fell to a three-month closing low and recorded its second-biggest monthly loss in 15 years.

Markets got little support from a regional survey, the Chicago PMI, which came in at 50%, topping the consensus call for 47.0% and July's 43.4% reading. It was the strongest gain since September.

Semiconductor sales tumbled 18% in July, but the fall-off continued to moderate, topping June's sales by 5% and beating the year-over-year average decline of 25%, according to the Semiconductor Industry Association, a trade group. Nonetheless, the sector is trading lower across the board.

A measure of investor sentiment has dropped significantly. The AAII survey, which measures the percentage of individual investors who are bullish, bearish and neutral on the stock market over the coming six months, last week saw bullish sentiment falling to 34%, beneath the long-term average of 38.9%; neutral sentiment dropping to 17.5%, below the long-term average of 31.1%; and bearish sentiment climbing to 48.5%, above the long-term average of 30%. Just two weeks earlier, bullish sentiment stood at 51%; neutral sentiment registered at 16% and bearish sentiment came in at 33%.

Mergers did lend some support to the broader market.

Oilfield service company Baker Hughes Inc (BHI) said it will buy smaller competitor BJ Services Co (BJS) for $5.5 billion in stock and cash.

The Walt Disney Co. (NYSE:DIS) is acquiring Marvel Entertainment Inc. (MVL) for $4 billion in cash and stock, bringing characters like Iron Man and Spider-Man into the family of Mickey Mouse and WALL-E. Disney will get the rights to 5,000 Marvel characters.

Chemical company Huntsman (NYSE:HUN) has offered to pay about $415 million for Tronox Inc.'s titanium dioxide and electrolytics businesses in a deal that would make Huntsman the world's second-biggest maker of a whitener used in products as diverse as food, plastics and paint. Tronox is in bankruptcy.

Crude oil fell 3.8% to close regular trading at $69.96 a barrel. It's the first close below $70 in two weeks.