YAHOO [BRIEFING.COM]: Equities
started the day on a mixed note before a broad sell-off sent the major averages
to their session lows. The weakness started in the technology sector where a
slew of companies lowered their third quarter guidance. After reaching their
worst levels of the day, the key indices traded sideways until late day selling
coincided with reports the U.S. Attorney in Manhattan filed a civil mortgage
fraud lawsuit against Wells Fargo (WFC 35.12, -0.68). The company has since
come out and denied any wrongdoing. As a result, the S&P 500 fell 1.0%
while the Nasdaq underperformed with a loss of 1.5%.
The technology sector was the biggest laggard. Early weakness resulted from Apple (AAPL 635.85, -2.32) slipping as much as
2.0% intraday. However, shares of the tech giant proved to be resilient as the
stock reversed and closed with a loss of 0.4%. Despite the intraday recovery in
Apple, the rest of the technology sector was unable to reclaim its losses.
Technology bellwether Intel (INTC 21.90, -0.61) slipped 2.7% after Bernstein downgraded
the stock from ‘market perform' to ‘underperform.' It should be noted that
today's selling dropped Intel to its 52-week low.
Netflix (NFLX 65.52, -7.99) slid 10.9% after Bank
of America/Merrill Lynch downgraded the stock from ‘buy' to ‘underperform' with
a $72 price target. The downgrade resulted from valuation questions following
the recent rally as well as concerns over the company's domestic streaming
business and its international profitability. Today's selling follows yesterday's
10.0% rally which resulted from a Morgan Stanley upgrade.
VASCO
Data (VDSI 7.34,
-1.60) adds to the list of technology companies who cut their third quarter
outlook. The stock sank 17.9% after the company lowered its third quarter and
full-year 2012 guidance below consensus. The company commented on the lowered
guidance by saying that "the lower than expected order intake in Q3
requires [the company] to lower [its] estimates of full-year revenue and
related operating margins."
The energy sector was the top performer as crude oil advanced 3.3%. Within the
complex, Gulfport Energy (GPOR 32.65, +2.22) gained 7.3% after reaffirming its 2012
guidance. The company continues to estimate 2012 production to range from 2.9
million to 3.1 million.
Coal stocks were broadly higher and the Market Vectors Coal ETF (KOL 24.35, +0.38) added 1.6%. Among
individual coal producers, Alpha Natural Resources (ANR 7.28, +0.50) advanced 7.4% while CONSOL Energy (CNX 33.11, +1.38) and Peabody Energy (BTU 23.93, +1.29) saw gains between 4.3%
and 5.7%.
Meanwhile, Penn Virginia (PVA 5.49, -1.04) fell 15.9% after announcing concurrent
public offerings of 12 million shares of common stock and $50 million of
depositary shares representing convertible preferred equity.
The Dow Jones Transportation Average slid 1.1% to break its recent streak of
outperformance. Airlines were among the weakest components as they erased a
portion of their recent gains. Delta Air Lines (DAL 9.89, -0.24) slipped 2.4%, while Alaska Air (ALK 36.43, -0.52) and United Continental (UAL 20.49, -0.41) fell between 1.4% and
2.0%. Out of the twenty transportation stocks, only Matson (MATX 21.36, +0.38) advanced. Shares of
the shipping company settled higher by 1.8%.
Chinese internet stocks were under pressure after Credit Suisse downgraded Baidu.com (BIDU 106.48, -7.80) from ‘neutral' to
‘underperform.' In addition, the price target was lowered from $118 to $83. As
a result of the downgrade, Baidu.com slid 6.8%, and traded at levels last seen
in early September.
Other Chinese internet names also declined in sympathy. SINA (SINA 60.36, -0.77), Sohu.com (SOHU 39.58, -1.12), and Youku Tudou (YOKU 19.16, -0.36) all registered losses
between 1.2% and 2.8%.
Tomorrow, the MBA Mortgage Index will be reported at 7:00 ET. In addition, the
September Treasury Budget and Federal Reserve's September Beige Book will be
released at 14:00 ET.
Crude oil extended overnight gains as escalated tension between
Turkey and Syria overshadowed the IMF cutting its global growth forecast. The
energy component came off its pit session low of $90.08 per barrel and steadily
climbed to a session high of $92.91 per barrel before settling with a 3.2% gain
at $92.41 per barrel.
Natural gas dipped to a session low of $3.35 per MMBtu in morning action.
However, a reversal took prices into positive territory and to a session high
of $3.51 per MMBtu as investors reacted to forecasts of a slightly colder turn
in computer weather projections. Natural gas lost some steam as it headed into
the close but still settled 1.8% higher at $3.46 per MMBtu.
Gold fell into negative territory as a stronger dollar put pressure on the
yellow metal. It tumbled to a pit session low of $1762.00 per ounce after
trading as high as $1780.20 per ounce in early morning action. Gold eventually
settled 0.6% lower at $1765.70 per ounce. Silver also slid to a session low of
$33.57 per ounce but managed to erase most of the loss by afternoon action. It
closed pit trade at $33.99 per ounce, or 0.1% lower.
The U.S. Treasury will hold a $21 billion, 10-yr reopening.DJ30 -110.12 NASDAQ
-47.33 SP500 -14.40 NASDAQ Adv/Vol/Dec 542/1.59 bln/1935 NYSE Adv/Vol/Dec
694/612.5 mln/2348