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Contributors: Douglas McIntyre Jon C. Ogg

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Tuesday, August 01, 2006

Market Wrap (August 1, 2006)


DJIA 11,125.73; Down 59.95 (0.54%)
NASDAQ 2,061.99; Down 29.48 (1.41%)
S&P500 1,270.92; Down 5.74 (0.45%)
10YR-Bond 4.983%

Today was all about inflation and the further risk of tightenings. August is often the slowest and one of the worst performing stock months. Today we started that trend off as if it was in a play book. We had many big shortfall stocks on disappointing earnings and here is a list of the more active movers:

It was a mixed bag in telecom stocks today. Qwest (Q) rose 8% to close at $8.42 after beating earnings expectations. Verizon fell 1.6% to $33.27, despite the fact that the company beat earnings expectations. Vodafone (VOD) also fell 0.7% to $21.53 after it renewed its agreement with Verizon on Verizon Wireless, signaling it will not yet be able to unlock the underlying value in Verizon Wireless.

US Auto makers reported dismal numbers, with both DaimlerChrysler (DCX) and Ford reporting a more than 30% drop in sales and GM (GM) reporting more than a 19% drop. F fell 1% to $6.60, DCX fell 1.3% to $50.95, and GM fell 2.7% to $31.34.

Boyd Gaming (BYD) rose 2.4% to $34.36 at the end of the day after talk surfaced that BYD's 11.8+ million share secondary offering had been fully subscribed to and may price one night early. That secondary and the telegraphed filing of it last week has been acting as an overhang in the stock.

Burger King (BKC) fell 12% to $13.40 after posting wide losses after charges for its IPO and management terminations.

Coach (COH) beat earnings and raised guidance; COH rose 2.6% to $29.48.

Sirius Satellite Radio (SIRI) fell despite posting a narrower loss and reporting that subscribers would be higher than expected. This is perhaps on word that Cramer said yesterday that SIRI may acquire XM Satellite Radi (XMSR). XMSR rose 5% to $12.21 and SIRI closed down 3% at $4.07.

Yankee Candle (YCC) rose over 2.9% to $25.03 after Goldman Sachs reported that the company was seeking a sale.

Eastman Kodak (EK) fell a disgraceful 13.8% to $19.18 to new multi-year lows after posting huge losses and signalling evben more layoffs would be necessary. They also said Flextronics (FLEX) would finally start manufacturing their digital camera operations in a move that is about 6 years or 8 years too late. FLEX also fell

Finish Line (FINL) fell 5% to $11.68 on no real news, although it is possible that since Foot Locker has not yet been bought that the street is turning its back on the stock.

Despite the fact that AMD (AMD) was being included in new powerful IBM computing and despite talk that Dell was going to use its chips in laptops, AMD shares closed down 1.3% at $19.12.

Whole Foods (WFMI) turned organic into spoiled after beating earnings per share targets; but its revenues were soft and forecasts were not good enough for a 50+ P/E grocery store company. WFMI fell 11.7% to $50.74.

Vonage (VG) closed down about 5.5% at $6.70 after reporting much wider losses than estimates. The issue that kept it from falling off a cliff was that analysts and traders were able to start coming up with some sort of guestimated model to determine if it would survive all on its own.

Expeditors International (EXPD) fell 11% to $40.38 after missing its EPS target by a mere penny.

Jon C. Ogg
August 1, 2006

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