24/7 Wall St. Closing Bell — July 19, 2012: Market Sags on More European, Spanish Woes

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The three major US stock indexes opened lower this morning after Spanish bond yields rose above 7% again and the country’s Valencia region asked for central government assistance in paying its debts. The euro hit a two-year low against the dollar following an announcement from the European Central Bank that Greek debt will no longer be accepted as collateral in Eurozone monetary policy actions (more coverage here). Investors’ hopes for any kind of positive encouragement from Europe were dashed early and often today. Investors also seem to have figured out the US earnings reports only look good because expectations had been set so low.

The US dollar index rose sharply today, now up 0.76% at 83.486, almost 12% higher than a year ago. The GSCI commodity index rose about 2.3% to 654.73, with commodities prices mostly higher today. Corn posted a new 12-month high of near $8.30/bushel today, before giving some of the gain back. WTI crude oil fell -1.1% today, closing at $91.44/barrel. Brent crude trades down -0.9% at $106.83/barrel. Natural gas is up 2.67% today to $3.079/thousand cubic feet. Gold settled at $1,582.80/ounce, up 0.2%.

The unofficial closing bells put the DJIA down more than 120 points to 12,823.33 (-0.93%), the NASDAQ fell nearly 41 points (-1.37%) to 2,925.30, and the S&P 500 fell  -1% or nearly 14 points to 1,362.70.

There were several analyst upgrades and downgrades today, including United Parcel Service Inc. (NYSE: UPS) cut to ‘underperform’ at RBC Capital; Steel Dynamics Inc. (NASDAQ: STLD) raised to ‘overweight’ at Morgan Stanley; Wynn Resorts Ltd. (NASDAQ: WYNN) started as ‘buy’ at SunTrust; TransCanada Co. (NYSE: TRP) raise to ‘outperform’ at Credit Suisse; and Nokia Corp. (NYSE: NOK) raised to ‘hold’ at SocGen.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Chipotle Mexican Grill Inc. (NYSE: CMG) is down -21.3% at $318.05 (more coverage here); Google Inc. (NASDAQ: GOOG) is up 3% at $611.09; Rambus Inc. (NASDAQ: RMBS) is down -17.4% at $4.31; SanDisk Corp. (NASDAQ: SNDK) is up 10.8% at $38.86; Microsoft Corp. (NASDAQ: MSFT) is down -1.7% at $30.16; American Electric Power Co. Inc. (NYSE: AEP) is down -0.2% at $41.91 (more coverage here); Baker Hughes Inc. (NYSE: BHI) is up 9.4% at $45.65 (more coverage here); General Electric Co. (NYSE: GE) is up 1% at $20.00 (more coverage here); ManpowerGroup (NYSE: MAN) is down -6.5% at $33.39; and Xerox Corp. (NYSE: XRX) is down -5.7% at $6.78 (more coverage here).

Before markets open on Monday we are scheduled to get earnings results from Coca-Cola Enterprises Inc. (NYSE: CCE), Eaton Corp. (NYSE: ETN), Hasbro Inc. (NYSE: HAS), and McDonald’s Corp. (NYSE: MCD).

Some standouts from today include the following stocks:

Palo Alto Networks Inc. (NYSE: PANW) is up 31.2% at $55.12 after hitting a high of $62.07. The network security software company held its IPO today. More coverage here.

Kayak Software Corp. (NASDAQ: KYAK) is up 30.8% at $34.00 after reaching a high of $35.00. The Internet travel site launched its IPO today as well.

Onyx Pharmaceuticals Inc. (NASDAQ: ONXX) is up 11.9% at $76.55 after posting a new high of $79.19 earlier today. The pharmaceutical maker received approval for one of its cancer drugs today. More coverage here.

Gold Resources Corp. (NYSEMKT: GORO) is down -28.6% at $18.00. The exploration stage gold miner lowered its production target by -15% after markets closed last night.

Stay tuned for Monday. We have noted the following events on the schedule (all times Eastern):

  • 8:30 a.m. – Chicago Fed national activity index
  • 11:30 a.m. – 3- and 6- month bill auctions
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Have a great weekend!

Paul Ausick