24/7 Wall St. Closing Bell -- October 11, 2012: Markets Fail to Hold Morning Gains (COST, ZNGA, PCS, EA, HST, ADTN, RT, SWY, DRWI, WGO, SCHW, JBHT, WFC, ICPT, KYTH, SSTK, RLGY, CLWR, S, ANR, THC, DLTR)

The three major U.S. stock indexes opened higher this morning on traders initial reaction to a sharp drop in the weekly report on new claims for unemployment (more coverage here). In Asia, South Korea lowered its GDP growth forecast from 3.2% to 2.4% for 2012 and from 3.8% to 3.2% for 2013 and dropped interest rates by 0.25%. In Europe, Spanish stocks fell on a downgrade from S&P, but markets in other eurozone countries were up on little new data. The U.S. trade deficit rose more than expected in August, while export and import prices both rose (more coverage here). After a good start, equities closed the day mixed, right about where they started.

The U.S. dollar index rose today, now down 0.18% at 79.770. The GSCI commodity index is down fractionally at 664.76, with commodities prices mostly higher today. WTI crude oil closed up 0.9% today, at $92.07 a barrel, following today’s reported increase in crude supplies (more coverage here). Brent crude trades up 1.2% at $115.74 a barrel. Natural gas is up 3.8% today to nearly $3.61 per thousand cubic feet after the weekly storage report showed only a modest build in inventories (more coverage here). Gold closed at $1,770.60 an ounce, up 0.3%.

The unofficial closing bells put the DJIA down nearly 17 points to 13,328.12 (-0.13%), the NASDAQ fell more than 2 points (-0.08%) to 3,049.38, and the S&P 500 rose 0.02% or less than 1 point to 1,432.88.

There were several analyst upgrades and downgrades today, including Costco Wholesale Corp. (NASDAQ: COST) reiterated as ‘buy’ and target price raised to $113 at Argus; Znyga Inc. (NASDAQ: ZNGA) started as ‘underperform’ with a $3.00 target price at Credit Suisse (more coverage here); MetroPCS Communications Inc. (NYSE: PCS) cut to ‘underperform’ at Oppenheimer; Electronic Arts Inc. (NASDAQ: EA) started as ‘neutral’ at Credit Suisse; and Host Hotels & Resorts Inc. (NYSE: HST) cut to ‘neutral’ at Goldman Sachs.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading: ADTRAN Inc. (NASDAQ: ADTN) is down 0.6% at $15.88; Ruby Tuesday Inc. (NYSE: RT) is up 0.5% at $7.06; Safeway Inc. (NYSE: SWY) is down 3.2% at $15.77 (more coverage here); Dragonwave Inc. (NASDAQ: DRWI) is up 15% at $2.53; and Winnebago Industries Inc. (NYSE: WGO) is down 1.2% at $12.05 (more coverage here).

Before markets open tomorrow we are scheduled to hear from The Charles Schwab Corp. (NYSE: SCHW), J.B. Hunt Transportation Services Inc. (NASDAQ: JBHT), and Wells Fargo & Co. (NYSE: WFC).

There were four hugely successful IPOs today: Intercept Pharmaceuticals Inc. (NASDAQ: ICPT) opened at $15 a share and is trading at $19.00 currently; Kythera Biopharmaceuticals Inc. (NASDAQ: KYTH) opened at $16.00 and current trades at $19.56; Shutterstock Inc. (NYSE: SSTK) opened at $17 a share and currently trades at $21.80; and Realogy Holdings Corp. (NYSE: RLGY) priced at $27 a share and trades currently at $34.01 (more coverage here).

Some standouts from today include the following stocks:

Clearwire Corp. (NASDAQ: CLWR) is up 57.7% at $2.05. The wireless carrier is jumping on the news that Sprint Nextel Corp. (NYSE: S) is negotiating a sale of a stake in Sprint to Japan’s SoftBank. More coverage here.

Alpha Natural Resources Inc. (NYSE: ANR) is up 15.6% at $8.47. The coal miner is leading other coal stocks in a sharp climb today on the continuing rise in natural gas prices and the prospects for a colder winter.

Tenet Healthcare Corp. (NYSE: THC) is up 305% at $24.18. The healthcare provider executed a 1-for-4 reverse stock split today.

Dollar Tree Inc. (NASDAQ: DLTR) is down 8.2% at $43.07. The discount retailer cut its sales outlook today.

Stay tuned for Friday. Richmond Fed President Jeffrey Lacker is giving a speech. We have also noted the following events on the schedule (all times Eastern):

  • 8:30 a.m. – Producer price index
  • 9:55 a.m. – University of Michigan/Thomson Reuters consumer sentiment index
  • 2:00 p.m. – Treasury budget

Paul Ausick

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