Stock Market Wrap Mar. 16
New economic data offered a relatively stable level of inflation, but investors took a pessimistic view of the numbers and sent stocks lower on the day. The disappointment stemmed in part from the fact that, while recent data has been pointing to a softening economy, inflation pressure is still being felt. All three major indexes closed moderately lower on the day
Looking at the numbers, the Labor Department's Consumer Price Index (CPI) rose 0.4% in February, ahead of the 0.3% expected by Wall Street. The closely watched core rate, which excludes volatile food and energy prices, was up 0.2%, matching expectations. Coming on the heels of yesterday's Producer Price Index (PPI) numbers, which pointed to some inflationary pressure, the CPI numbers left investors on edge.
In corporate news, several subprime mortgage stocks once again posted outsized gains as the crisis in that sector continues to shake out. Accredited Home Lenders (Nasdaq: LEND - News) added another 16% on top of yesterday's big gains after announcing that it would sell some of its loans at a discount, enabling it to meet looming margin calls. Fremont General (NYSE: FMT - News) tacked on 20% after its credit line with Credit Suisse was boosted by $1 billion.
Elsewhere, in the wake of the January announcement from the Federal Deposit Insurance Corp. delaying its review of bank charter applications from Wal-Mart (NYSE: WMT - News), the retailer has scrapped long-held plans to establish a bank. Wal-Mart's plans had come under fire because, among other arguments, some believe a Wal-Mart bank would have an unfair advantage over traditional banks. Wal-Mart has argued all along that it never intended to open its own bank, but that it sought to be classified as one in order to reduce credit and debit card transaction costs. Home Depot (NYSE: HD - News), which also has a pending application, has not abandoned its efforts.
In other news, CVS (NYSE: CVS - News) moved one step closer to completing its marathon effort to acquire pharmacy benefits manager Caremark Rx (NYSE: CMX - News) after Caremark shareholders approved CVS' $26.5 billion offer. CVS had been engaged in a long-running bidding war with Express Scripts (Nasdaq: ESRX - News) over Caremark.
Elsewhere in M&A, crude oil tanker company OMI Corp (NYSE: OMM - News) jumped 14.5% after management said it was considering putting the firm up for sale. Newmont Mining (NYSE: NEM - News), meanwhile, posted a modest gain after a BusinessWeek report suggested it might be a target of Barrick Gold (NYSE: ABX - News), the world's biggest gold producer. Barrick, however, dismissed the speculation.
Finally, tech giant Hewlett-Packard (NYSE: HPQ - News) announced the biggest stock buyback in its history, authorizing the repurchase of $8.0 billion in shares. The new authorization comes on top of the $3.3 billion HP had remaining, as of January 31st, under its prior $6.0 billion repurchase plan, which was approved in August 2006. The tech leader finished the session only slightly higher on the news.
Looking at the numbers, the Labor Department's Consumer Price Index (CPI) rose 0.4% in February, ahead of the 0.3% expected by Wall Street. The closely watched core rate, which excludes volatile food and energy prices, was up 0.2%, matching expectations. Coming on the heels of yesterday's Producer Price Index (PPI) numbers, which pointed to some inflationary pressure, the CPI numbers left investors on edge.
In corporate news, several subprime mortgage stocks once again posted outsized gains as the crisis in that sector continues to shake out. Accredited Home Lenders (Nasdaq: LEND - News) added another 16% on top of yesterday's big gains after announcing that it would sell some of its loans at a discount, enabling it to meet looming margin calls. Fremont General (NYSE: FMT - News) tacked on 20% after its credit line with Credit Suisse was boosted by $1 billion.
Elsewhere, in the wake of the January announcement from the Federal Deposit Insurance Corp. delaying its review of bank charter applications from Wal-Mart (NYSE: WMT - News), the retailer has scrapped long-held plans to establish a bank. Wal-Mart's plans had come under fire because, among other arguments, some believe a Wal-Mart bank would have an unfair advantage over traditional banks. Wal-Mart has argued all along that it never intended to open its own bank, but that it sought to be classified as one in order to reduce credit and debit card transaction costs. Home Depot (NYSE: HD - News), which also has a pending application, has not abandoned its efforts.
In other news, CVS (NYSE: CVS - News) moved one step closer to completing its marathon effort to acquire pharmacy benefits manager Caremark Rx (NYSE: CMX - News) after Caremark shareholders approved CVS' $26.5 billion offer. CVS had been engaged in a long-running bidding war with Express Scripts (Nasdaq: ESRX - News) over Caremark.
Elsewhere in M&A, crude oil tanker company OMI Corp (NYSE: OMM - News) jumped 14.5% after management said it was considering putting the firm up for sale. Newmont Mining (NYSE: NEM - News), meanwhile, posted a modest gain after a BusinessWeek report suggested it might be a target of Barrick Gold (NYSE: ABX - News), the world's biggest gold producer. Barrick, however, dismissed the speculation.
Finally, tech giant Hewlett-Packard (NYSE: HPQ - News) announced the biggest stock buyback in its history, authorizing the repurchase of $8.0 billion in shares. The new authorization comes on top of the $3.3 billion HP had remaining, as of January 31st, under its prior $6.0 billion repurchase plan, which was approved in August 2006. The tech leader finished the session only slightly higher on the news.
Labels: ABX, CMX, CVS, ESRX, FMT, HD, HPQ, LEND, NEM, OMM, WMT
posted by Stock Administrator @ 5:37 PM
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