Stock Market Wrapup Mar. 27
Stocks traded weakly today as investors became skittish over fears that problems in the subprime mortgage market are going to spill over into other sectors and lead to a slowing of the economy. Exacerbating those fears was a sharp loss by one of the nation's largest homebuilders, which said it could no longer accurately forecast its results for this year, along with a report of declining consumer confidence. The 10-year Treasury note also traded lower today, while crude oil futures closed up fractionally.
The catalyst for today's slump was the fiscal Q1 profit report from Florida-based homebuilder Lennar (NYSE: LEN - News). The company's FQ1 profit plunged -73%, driven lower by weak sales, the woes of the subprime sector, and rising land prices. Lennar joins fellow builders KB Homes (NYSE: KBH - News), Hovnanian Enterprises (NYSE: HOV - News), and Toll Brothers (NYSE: TOL - News) as reporting sharply lower earnings in the past month. The company acknowledged it would not meet its previously issued forecast for full-year earnings, and said it was "not comfortable" with making any further predictions at this time.
Lennar's report was in many respects not surprising, given what its competitors previously announced and coming as it did on the heels of yesterday's surprisingly weak report on February new-home sales from the Commerce Department. January sales were also sharply lower, the government previously said. The bad news from the housing sector, and a recent surge in prices at the pump, was reflected in a drop in consumer confidence as measured in a monthly survey by The Conference Board, a private business group.
In market news today, Pennsylvania utility operator PPL (NYSE: PPL - News) hit its second-consecutive new 52-week high after Lehman Brothers upgraded the stock to "overweight" from "equal weight," and boosted its target to $47 from $38. The stock added 2.7%, topping the $40.05 one-year high it set on Monday.
Independent refiner Valero Energy (NYSE: VLO - News) closed higher after announcing in a regulatory filing that it was delaying a planned expansion in Quebec and canceling another refinery project in Texas. The company was expected to discuss its plans at an industry conference tomorrow. Valero cited the need for controlling its capital spending in the face of rising refinery construction costs.
Shares of automaker DaimlerChrysler (NYSE: DCX - News), meanwhile, rose on reports that two different private equity groups, assisted by Wall Street banks, would submit bids for the company's troubled Chrysler unit by as early as Thursday. According to a report in the Detroit News, Blackstone Group and Centerbridge Partners have assembled a group of banks that includes Lazard (NYSE: LAZ - News), Lehman Brothers (NYSE: LEH - News), and Bank of America (NYSE: BAC - News) for one bid. Another offer for the carmaker, the newspaper reported, may come from Cerberus Capital Management with help from Goldman Sachs Group (NYSE: GS - News).
By the BullMarket.com Staff
The catalyst for today's slump was the fiscal Q1 profit report from Florida-based homebuilder Lennar (NYSE: LEN - News). The company's FQ1 profit plunged -73%, driven lower by weak sales, the woes of the subprime sector, and rising land prices. Lennar joins fellow builders KB Homes (NYSE: KBH - News), Hovnanian Enterprises (NYSE: HOV - News), and Toll Brothers (NYSE: TOL - News) as reporting sharply lower earnings in the past month. The company acknowledged it would not meet its previously issued forecast for full-year earnings, and said it was "not comfortable" with making any further predictions at this time.
Lennar's report was in many respects not surprising, given what its competitors previously announced and coming as it did on the heels of yesterday's surprisingly weak report on February new-home sales from the Commerce Department. January sales were also sharply lower, the government previously said. The bad news from the housing sector, and a recent surge in prices at the pump, was reflected in a drop in consumer confidence as measured in a monthly survey by The Conference Board, a private business group.
In market news today, Pennsylvania utility operator PPL (NYSE: PPL - News) hit its second-consecutive new 52-week high after Lehman Brothers upgraded the stock to "overweight" from "equal weight," and boosted its target to $47 from $38. The stock added 2.7%, topping the $40.05 one-year high it set on Monday.
Independent refiner Valero Energy (NYSE: VLO - News) closed higher after announcing in a regulatory filing that it was delaying a planned expansion in Quebec and canceling another refinery project in Texas. The company was expected to discuss its plans at an industry conference tomorrow. Valero cited the need for controlling its capital spending in the face of rising refinery construction costs.
Shares of automaker DaimlerChrysler (NYSE: DCX - News), meanwhile, rose on reports that two different private equity groups, assisted by Wall Street banks, would submit bids for the company's troubled Chrysler unit by as early as Thursday. According to a report in the Detroit News, Blackstone Group and Centerbridge Partners have assembled a group of banks that includes Lazard (NYSE: LAZ - News), Lehman Brothers (NYSE: LEH - News), and Bank of America (NYSE: BAC - News) for one bid. Another offer for the carmaker, the newspaper reported, may come from Cerberus Capital Management with help from Goldman Sachs Group (NYSE: GS - News).
By the BullMarket.com Staff
Labels: BAC, DCX, GS, HOV, KBH, LAZ, LEH, LEN, PPL, TOL, VLO
posted by Stock Administrator @ 5:06 PM
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