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Stocks Slump, But Off Lows, as Investors Eye Revised GDP Data; Commodities in Red

By: MT Newswires
Posted: 6/24/2011 12:28:00 PM
Referenced Stocks: ABT;BBBB;BIDU;IRE;PTIE

Stocks are lower for the second session in a row after new data showed the US economy grew slower than analysts had expected, and reports from two tech names failed to inspire investor confidence.

The U.S. economy grew at a slightly faster 1.9% clip in Q1 compared to 1.8% revealed in the initial reading, although a touch shy of Wall Street expectations for a revised 2%. In Europe, just as progress on Greek aid cheered investors, a suspension in Italian banking share trade rattled markets anew.

Trading in Italian bank stocks was suspended Friday after a sudden drop in share prices, MarketWatch reports. A spokeswoman for Borsa Italiana said the suspension was temporary and was triggered by "technical problems about volatility."

In earnings, Oracle (ORCL) is down after the company reported a rise in fiscal Q4 profit that topped analyst expectations. However, traders look to be focusing on the report's details. Hardware sales dropped during the quarter in contrast to Oracle's previous forecast of a rise of up to 12%.

On its conference call, ORCL said it expects Q1 revenue growth in the range of of 9% to 12%. Non-GAAP EPS is seen in the range of $0.45 to $0.48 per share. The Street is at 9% revenue growth and earnings of $0.46 per share. Earlier, the company reported Q4 revenue of $10.77 bln, just ahead of the analyst consensus of $10.74 bln on Thomson Reuters. EPS $0.75, vs. expectations of $0.71 per share.

Also, Micron (MU) is lower after it reports late Thursday Q3 sales of $2.13 billion, below the analyst consensus of $2.36 billion on Thomson Reuters. EPS was $0.07 per share, vs. expectations of $0.16 per share.

Elsewhere in company news:

NYSE Euronext (NYX) and Deutsche Boerse AG will pay $910 million in dividends to shareholders to settle lawsuits challenging the $9.53 billion buyout of the parent company of the New York Stock Exchange, according to court papers, Bloomberg reports.

Shares of Abbott Laboratories ( ABT ) are down even as new data showed that an experimental drug from Abbott and Reata Pharmaceuticals reversed declining kidney function in diabetics, the companies said in a statement. The stude showed that bardoxolone bolstered kidney performance by about 30 percent.

Blackboard ( BBBB ) gains after the WSJ reports that it is in exclusive talks with Providence Equity Partners. The acquisition may happen next week, the WSJ said.

Baidu ( BIDU ) says it will make a US$306 million strategic investment in Qunar, which will make BIDU the majority shareholder. The parties currently expect that the transaction will close in Q3.

Pfizer (PFE) and Pain Therapeutics ( PTIE ) shares are lower as the U.S. Food and Drug Administration delayed approval of a new pain killer for the second time. The companies announced that a complete response letter was received from the U.S. Food and Drug Administration on the resubmission to the new drug application for REMOXY (oxycodone) Extended-Release Capsules CII. Pfizer said it is working to evaluate the issues described in the letter and plans to have further discussions with FDA around them.

Bank of Ireland Plc ( IRE ) slips after it says it may raise a total of 2.5 billion euros from its offer to swap subordinated debt for equity or cash, according to Glas Securities, Bloomberg reports.

Commodities are down. August gold contracts are down 0.65% to $1,511 an ounce while August crude oil contacts are down 0.23% to $90.78 a barrel.

In energy ETFs, the United States Oil Fund (USO) is down 1.17% to $35.59 and the United States Natural Gas fund (UNG) is down 0.01%, to $10.70.

In precious metal ETFs, the SPDR Gold Trust (GLD) is down 0.87% at $147.04. Market Vectors Gold Miners (GDX) is down 1.98% to $52.94. iShares Silver Trust (SLV) is down 1.08% to $34.