STOCK CAP WEEK AND MONTH WITH FAT LOSSES

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FROM THE IBD
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Stocks Cap Week And Month With Fat Losses

BY VINCENT MAO

Posted 2/27/2009

Stocks fell for the third-straight session Friday on news that the government would up its stake in Citigroup to as much as 36%. A bigger-than-expected downward revision to fourth-quarter GDP also hurt the market.

NOTE: the stock has a fell for the third-stragth session friday on news.

The S&P 500 dropped 2.4% and NYSE composite 2%. Both closed below their November lows.

Meanwhile, the Dow lost 1.7%. The Nasdaq fought to stay above water for most of the session, but it finished down 1%.

For the week, the NYSE composite, Dow, Nasdaq and S&P 500 tumbled 3.9%, 4.1%, 4.4% and 4.5% respectively. All indexes ended sharply lower for the month. The Nasdaq shed 6.7%, while the other indexes ended with losses of 11% and worse.


NOTE:ALL indexes ended sharply lower for the month.

Volume finished higher across the board, especially on the NYSE.

Citigroup (C) plunged 39% in monster trade as the Treasury said it would convert up to $25 billion in preferred shares to common stock, thus greatly diluting existing shareholder equity.

Other banks suffered.

Huntington Bancshares (HBAN) dived 25%, and Bank of America (BAC) swooned 26%. Wells Fargo (WFC) dropped 16%.

Medical stocks, which made up nearly a quarter of this week's IBD 100, were also hit hard.

Athenahealth (ATHN) gapped down, sliced its 200-day moving average and tumbled 25%. The downturn came despite a big jump in quarterly profit. Athenahealth provides Web-based business services for doctors, including billing and records-keeping.

Gentiva Health Services (GTIV) dived 18% in nearly six times average trade. The sell-off pushed the home health care provider's Accumulation/Distribution Rating to E.

On the upside, Hansen Natural (HANS) popped 7% in heavy trading despite posting a surprising loss. But the stock closed below its 50-day line.

4:15 p.m. Update: Indexes End Volatile Session With Losses

BY JUAN CARLOS ARANCIBIA

The stock market ended a seesaw session with more losses, capping another bearish week.

The S&P 500 tumbled 2.4%, the NYSE composite 2%, the Dow 1.7% and the Nasdaq 1%.

Volume rose on the NYSE but fell slightly on the Nasdaq, according to early readings.

Financials struggled while insurers fell on analysts' comments.

3:15 p.m. Update: Stocks Turn Slightly Mixed In Late Trade

BY VINCENT MAO

Stocks improved to mixed territory in late trading Friday. But the major indexes were on track to close the week and month with losses.

The S&P 500 shed 1.3%, NYSE composite 1.1% and Dow 0.7%. The Nasdaq edged up a fraction.

Volume was tracking sharply higher on the NYSE and a tad higher on the Nasdaq.

Shanda Interactive Entertainment (SNDA) staged a huge reversal and climbed 3%. The stock was down over 12% following a Credit Suisse downgrade.

CA (CA) reversed earlier losses and gained 4%. That recouped the bulk of losses from the last two sessions. Late last month, the software maker easily beat views with a 19% rise in fiscal Q3 profit. But sales in the latest quarter fell 5%.

2:15 p.m. Update: Nasdaq Flirts With Positive Territory

BY VINCENT MAO

Rebound efforts waned, then strengthened in afternoon trading Friday.

The S&P 500 lost 0.8%, the NYSE composite 0.6% and the Dow 0.4%.

Dow component General Electric (GE) slashed its quarterly dividend to 10 cents a share from 31 cents. Shares slipped 2% in volatile trading. Another Dow stock, JPMorgan Chase (JPM), cut its dividend earlier this week.

Meanwhile, the Nasdaq rose 0.1% as it continued its fight to stay above water.

Turnover was again tracking sharply higher on the NYSE and slightly lower on the Nasdaq.

Amgen (AMGN) gapped down and dropped 3% to a four-month low. A lawsuit was reportedly filed against the biotech over the marketing of its Enbrel and Aranesp drugs.

Other biotechs lost ground. Vertex Pharmaceuticals (VRTX) shed 10%, Celgene (CELG) lost 8% and Gilead Sciences (GILD) fell 4%. On Thursday, President Obama called for access to cheaper generic drugs.

On the upside, LKQ Corp. (LKQX) quickly erased early losses and rallied 15% to a four-month high. On Thursday, the auto-parts recycler reported a wider-than-expected drop in Q4 earnings. But it guided current quarter profit in line to slightly above views.

Dollar Tree (DLTR) also reversed higher. It jumped 5% and regained its 200-day moving average. But resistance from the stock's 50-day line lies just ahead.

1:15 p.m. Update: Stocks Lower In Midday Trade; Nasdaq Goes Red

BY VINCENT MAO

Stocks were stuck in the red in midday trading Friday, but off the worst levels of the session.

The S&P 500 fell 1.1%, the NYSE composite 0.8% and the Dow 0.5%. Meanwhile, the Nasdaq slipped back into negative territory, down 0.3%. The tech-heavy index poked into positive territory a number of times today, but has been unable to hold above water.

Volume was tracking vastly higher on the NYSE due to the onslaught in the financials. Citigroup (C), which tumbled 35%, has already traded over a billion shares vs. an average daily volume of 265 million. Nasdaq volume eased.

MetLife (MET) and Hartford Financial Services (HIG) dived 20% and 14% respectively. Late Thursday, Standard & Poor's cut ratings on both firms, along with eight other insurers.

World Fuel Services (INT) jumped 7% in heavy trading on strong earnings. Late Thursday, the provider of aviation and marine fuel products smashed views with a 68% rise in Q4 profit. But sales slumped 30%. World Fuel's board doubled its quarterly dividend to 7.5 cents per share.

J. Crew (JCG) reversed early losses and rallied 6%. In efforts to cut costs, the trendy apparel maker will eliminate 95 jobs or about 10% of its work force. The company will also suspend matching employees' 401 k contributions and certain wages raises.

TransDigm (TDG) also reversed early losses and climbed 3% in fast trade. The engine maker turned higher after finding support at the confluence of its 50- and 200- day moving averages.

12:15 p.m. Update: Stocks Stay Lower In Mixed Volume

BY PATRICK CAIN

Stocks dropped again, and the indexes' attempted rally ended as recent lows were undercut.

The count for a potential follow-through day had been at Day 4 for all four major indexes until Friday's intraday decline.

The Dow fell 0.8%, the S&P 500 1.4%, the Nasdaq 0.4%. The NYSE composite sank 1.3%.

Volume was higher on the NYSE but slightly lower on the Nasdaq.

Athenahealth (ATHN), a provider of Web-based business services for doctors, gapped down and was off 21% in huge volume. The company reported after the close Thursday, beating both earnings and revenue estimates. The dive slashed the stock's 200-day moving average.

Novo Nordisk (NVO), an insulin maker, gapped down and was trading 5% lower. This week is likely to end as one of distribution for Novo. It would also be its highest-volume week since October 1984.

On the upside, credit card companies Visa (V) and MasterCard (MA) were higher in above-average trade. Visa was up 2% and nearing what could be the high of a three-weeks-tight pattern. MasterCard is also up 2%.

ITT Educational Services (ESI) was up 1% and finding support at its 50-day moving average. This also could be the third straight down week, though the closes in the weeks' upper ranges suggest accumulation. That's a nice way to start the left side of a possible base.

11:15 a.m. Update: Stocks Fight Back In Morning Trade

BY VINCENT MAO

Stocks battled back from heavy losses and turned mixed in late-morning trade Friday.

The NYSE composite shed 1.5%, up from -2.5%. The S&P 500 lost 1.3% and the Dow 1%.

The Nasdaq briefly turned positive, but fell back into the red, down 0.2%. Still, high-profile issues Google (GOOG), Apple (AAPL), Amazon.com (AMZN) and Research In Motion (RIMM) all sported gains.

Turnover was tracking heavier across the board, especially on the NYSE.

Health care issues, which tumbled Thursday on President Obama's plan to cut Medicare payments, continued to sicken. Almost Family (AFAM) dropped 8%, Amedisys (AMED) 4% and Psychiatric Solutions (PSYS) 3%.

Deckers Outdoors (DECK) gapped down and tumbled 18% to its lowest levels since July 2006. Late Thursday, the footwear maker delivered Q4 results above views, but gave a disappointing 2009 profit outlook.

On the upside, Thoratec (THOR) rose 3% on an upgrade. Piper Jaffray raised the medical device maker to buy from neutral, saying that the recent pullback represents a buying opportunity.

Syngenta (SYT) gained 3% in its fourth straight advance. The stock's Accumulation/Distribution Rating has improved to B+ from a worst possible E in October.

In economic news, the Chicago PMI unexpectedly improved to 34.2 in February from 33.3 in January. Readings under 50 signal contraction. Although that marked the fifth straight month of contraction, the figure was better than expected.

10:15 a.m. Update: Stocks Open Lower On Brisk Trade

BY VINCENT MAO

Stocks opened lower Friday following news of the government's deal with Citigroup and a worse-than-expected read on gross domestic product. But they have since pared some losses.

The NYSE composite and S&P 500 shed 2.2% and 2%, respectively. Both undercut their November lows. The Dow lost 1.7%, while the Nasdaq fell 0.7%.

Volume was tracking higher across the board.

Financials were sharply lower.

Citigroup (C) plunged 25% amid concerns that its new deal with the government will greatly dilute the bank's shares. Bank of America (BAC) fell 18% and Wells Fargo (WFC) shed 8%.

Meanwhile, Shanda Interactive Entertainment (SNDA) declined 8% after Credit Suisse downgraded the online gaming firm to underperform from neutral following Thursday night's earnings release.

AstraZeneca (AZN) fell 3% on news that the Food and Drug Administration is seeking more information on its Seroquel anxiety treatment.

On the bright side, Hansen Natural (HANS) rose 6% despite posting an unexpected loss late Thursday.

9:15 a.m. Update: Citigroup Deal Sinks Stock Futures

BY VINCENT MAO

Stock futures signaled a vastly lower open Friday as Citigroup announced a deal that cedes more control to the government.

Nasdaq futures tumbled 14 points vs. fair value, S&P 500 futures dropped 18 points and Dow futures dumped 123 points.

Citigroup (C) reached a deal in which the U.S. government will exchange up to $25 billion in emergency bailout money for an equity stake of up to 36% in the firm. The Treasury Department and some private investors will convert preferred shares into common shares. Once completed, current shareholders will see their ownership stakes in the struggling bank fall to about 26%. Citi shares plunged 42% in the pre-market.

Group mates Bank of America (BAC), JPMorgan Chase (JPM) and Wells Fargo (WFC) were also sharply lower in the pre-open.

Lloyds Banking Group (LYG) dived 23% in the pre-market after the British bank reported a 75% decline in annual profit. Its HBOS unit, which reported results separately, lost 7.5 billion pounds ($10.6 billion) in 2008 vs. a profit of 4.05 billion pounds in 2007.

Fannie Mae (FNM) late Thursday said it would need $15.2 billion in government aid after losing more than $25 billion in the fourth quarter. This morning the mortgage finance giant said it expects home prices to fall 7% to 12% this year. Shares lost 8% in the pre-open.

Elsewhere, a unit of drugmaker Cephalon (CEPH) offered to buy Australia's Arana Therapeutics for $207 million.

In economic news, gross domestic product fell 6.2% in the final quarter of 2008 vs. estimates for a 5.4% shortfall. It was the biggest decline since a 6.4% drop in the first quarter of 1982 and worse than a prior estimate of 3.8%.

The Chicago PMI regional factory gauge will be out at 9:45 a.m. EST. Economists see a small dip to 33.

Crude oil dropped $2.41 to $42.81 a barrel.

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