Mid-Day Update: Stocks Dip Sharply as Investors Focus on US Debt
Here's where markets stand at mid-day:
-NYSE down 160.15 (-1.91%) to 8,240.16
-DJIA down 210.17 (-1.7%) to 12,131.66
-S&P 500 down 20.80 (-1.58%) to 1,298.88
-Nasdaq down 50.24 (-1.82%) to 2,714.21
Hang Seng down 0.74%
Nikkei down 0.36%
FTSE down 2.1%
MID-DAY NYSE INDEX WATCH
NYSE Energy down 5.27% at 13,638.11
NYSE Financial down 3.37% at 5,027.89
NYSE Health Care down 1.78% at 6,863.75
NYSE Arca Tech 100 down 2.03% at 1,128.97
(+) AMRN (+75.9%) reported positive, statistically significant top-line results from its ANCHOR trial for the company's lead product candidate AMR101.
(+) C (+1.4%) finding traction after initial decline; earnings report mixed.
(+) INVE (+12.8%) reports orders.
(+) AONE (+10.3%) upgraded.
(+) RIMM (+0.6%) gets favorable Barron's coverage.
(+) THOR (+12.6%) upgraded.
(+) CHTP (+24.8%) reports Northera NDA filing plan.
(+) CYTR (+3.8%) gains on positive study data in journal.
(+) GWW (+2.1%) beats Q1 estimates, raises guidance.
(+) TITN (+14.5%) easily beats with earnings.
(-) KEY (-3.9%) swings to profit.
(-) THC (-4.1%) gets $6 per share offer from Community Health Systems ( CYH ).
(-) CYH (-4.1%) makes offer for THC; downgraded.
(-) GPS (-3.6%) downgraded.
(-) BBY (-0.6%) downgraded.
(-) TOT (-3.9%) downgraded.
(-) BMC (-3.6) downgraded.
Stocks are sharply lower at the session's half as the major ratings agencies weigh in on the global debt situation. For its part, Standard & Poor's raised concern over U.S. debt and cut its outlook on the US government, saying that the US fiscal profile may become "meaningfully weaker" absent policymaker action on the budget deficit, The Wall Street Journal reports.
Also, Moody's Investors Service on Monday downgraded the ratings of several Irish banks following its recent downgrade of Irish government bonds, according to news reports. The rating agency cut the long-term bank deposit ratings of Allied Irish Bank ( AIB ) and Bank of Ireland ( IRE ), EBS Building Society and Irish Life & Permanent by two notches and that of ICS Building Society by one notch. Bank of Ireland and ICS are now rated Ba1 and the other affected firms are rated Ba2.
On the economic data front, the National Association of Home Builders/Wells Fargo Housing Market Index fell by a point to 16 in April, the level it's been at for five of the last six months. Economists polled by MarketWatch had expected the gauge to stay at 17.
A survey by the National Association for Business Economics shows the U.S. economy continues its recovery, overcoming such headwinds as higher oil prices and the disasters in Japan. The survey found both higher sales and hiring as well as expectations for greater economic growth. Improving profit margins were cited as a factor behind the uptick in job creation. However, the NABE survey also found signs of building inflationary pressures.
In company news:
Shares of Johnson & Johnson ( JNJ ) are higher after Swiss firm Synthes Inc. confirmed it's in talks with the health care products giant about a potential business combination. The Wall Street Journal first reported the talks last week and said the deal could be valued at roughly $20 billion.
Shares of Yahoo ( YHOO ) are lower ahead of the company's first quarter earnings report due after the stock market closes on Tuesday. Analysts polled by FactSet see EPS of $0.16 on revenue of $1.05 billion, after subtracting Yahoo's ad commissions.
Qualcomm (QCOM) shares are down after Barron's reported over the weekend that the chipmaker may rebound on its smartphone and tablet growth outlook if the disruptions caused by Japan's earthquake and tsunami are temporary,
Principal Global Investors (PFG) eases after it says it will acquire a majority stake in Finisterre Capital LLP, and Finisterre Holdings Limited, (together Finisterre Capital). The transaction is expected to close early in Q3. It estimates the acquisition will be EPS neutral in 2011 and accretive in 2012.
Ford Motor Co. (F) said on Monday it is taking a test fleet of electrified vehicles to China later this year, including the Fusion hybrid. On the eve of the Shanghai auto show, the car maker unveiled three electric vehicles: the new Focus all-electric vehicle, the C-MAX Energi plug-in hybrid, and the Fusion hybrid.
In earnings news:
--Citigroup (C) says it earned a dime per share in Q1, a penny ahead of the Thomson Reuters mean estimate. Sales were $19.7 billion, below estimates for $20.5462 billion. Shares were down 0.2%.
--Amylin Pharmaceuticals (AMLN) shares are down after the company reported a net loss excluding restructuring charges was $34.5 million, or $0.24 per share versus $38.2 million, or $0.27 per share for the same period in 2010. According to a Thomson Reuters poll, analysts had expected a loss per share of $0.23.
--Eli Lilly and Co. (LLY) is down after costs weighed on Q1 profits, but still managed to top the Street, ex-items, on a 6% revenue gain.
--Halliburton reports Q1 adjusted EPS of $0.61, topping the Thomson Reuters mean analyst estimate for $0.58. Revenue increased to $5.2 billion compared to $3.7 billion a year earlier. The Street expected $4.9 billion.
Commodities are mixed. June gold contracts are up $9, or 0.58%, to $1,494 an ounce while May crude oil contacts are up 2.37%, or $2.6, at $107.01 a barrel.
In energy ETFs, the United States Oil Fund (USO) is down 2.37% to $42.68 and the United States Natural Gas fund (UNG) is down 1.77%, to $10.82.
In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.43% at $145.68. Market Vectors Gold Miners (GDX) is down 1.74% to $60.38. iShares Silver Trust (SLV) is up 0.05% to $41.86.