Best Money

« EnCana profit falls on writedown

EnCana Corp. said Wednesday that its first-quarter earnings fell due to accounting losses on its commodity price hedges. The Calgary-based company said it made an overall profit of $497 million US, or 64 cents a share in the quarter. That was pulled down by a $423-million US loss on accounting for its price hedges. In the same quarter of last year, EnCana made $1.47 billion US, or $1.70 a share. The energy company’s operating earnings per share diluted rose 24 per cent year-over-year...

Stocks Finish With Sharp Losses; Volume Up

April 28, 2008 on 4:29 am | In Finance |

Stocks got hammered Friday, putting the current rally under renewed stress.

The NYSE composite plunged 2.8%, the S&P 500 2.7%, the Nasdaq 2.6% and the Dow 2.5%.

Volume rose across the board, according to preliminary figures. That gave the market its second distribution day since a Feb. 13 follow-through.

The NYSE indexes touched their 50-day moving averages earlier this week, but rolled over from there. It would have been far more encouraging if the indexes had been able to establish themselves above that support line, even though it’s a secondary trend indicator.

The major indexes opened lower and fell from there. The market had much to cope with, all of it bad. Accounting for inflation, consumer spending was flat. And, it seems, the subprime mess is getting, well, messier.

UBS now says it expects the global toll from the subprime mire to total $600 billion.

Dow component American International Group () suffered its biggest-ever quarterly loss after writing down $11 billion in soured mortgages. AIG gapped down and closed 3.29 lower at 46.86 in heavy trade.

CNBC reported that a plan to bolster bond insurer Ambac Financial Group () has hit a “snag.”

The market deems it essential that confidence be restored in companies like Ambac and MBIA. These bond insurers serve as a safety mechanism for an economy riddled with bad debt.

In another troubling sign, energy stocks got hit hard.

Their losses seemed far more severe than would be warranted by crude’s decline.

Oil stocks had been one of the leading sectors in the market’s recent uptrend. And if they can’t thrive on $100 crude, it calls the market’s leadership into question.

Dell (), one of the biggest components on the Nasdaq, missed Q4 earnings late Thursday. That put added pressure on the Nasdaq. Shares fell 0.97 to 19.90.

3:15 p.m. EST Update: Indexes Worsen In Late Trading

Stocks continued to plunge in late trading Friday, on pace to post losses for the day and the week.

At 2:45 p.m. EST, the NYSE composite was down 2.5%, S&P 500 2.3%, Dow 2.2%. The Nasdaq, down 2.1%, threatened its lows from earlier this month.

Volume was tracking higher across the board. If that trend continues through the close, the indexes will have a new distribution day. It would be the second day of higher-volume selling since the Feb. 13 follow-through.

Declining stocks were running worse than 6-to-1 on the NYSE and about 7-to-2 on the Nasdaq.

HMS Holdings () lost 1.79, or 6%, to 27.51 in heavy trading. Late Thursday, the company reported a 114% surge in Q4 profit, in line with views.

Capella Education () dropped 2.20 to 51.75. The for-profit school now lies 31% off its November peak.

Continental Resources () fell 0.94 to 28.04 in brisk trading as energy stocks eased. The oil producer pulled back after clearing a six-week consolidation Thursday.

Crude oil retreated after it topped $103 a barrel. The April contract slipped 36 cents to $102.23 a barrel.

Gainers remain scared. Advancers were mainly thinly traded, second-tier issues.

1:15 p.m. EST Update: Stocks Down Near Lows; Volume Turns Mixed

By VINCENT MAO

The major stock indexes hovered near session lows in midday trading Friday as worries over the economy and an outlook for more bank losses weighed.

At 12:49 p.m. EST, the NYSE composite was down 1.9%, S&P 500 1.8%. The Dow and Nasdaq gave up 1.7% each.

The day’s losses easily were the worst of the week, which was shaping up as a modest success before today.

Volume was tracking mixed, with NYSE trading lower and the Nasdaq’s higher.

Breadth improved slightly from earlier today. Decliners outpaced advancers by 5-to-1 on the NYSE and about 3-to-1 on the Nasdaq.

Earlier this morning, Swiss investment bank UBS warned that financials faced more pain ahead. Losses from the fallout of the credit markets are slated to top $600 billion from $160 billion thus far.

On Thursday, American International Group () booked $11 billion in write-downs from investments related to subprime mortgages. And Freddie Mac () took $3.1 billion in write-downs.

GFI Group () gave up 3.48 to 77.22 on a big spike in volume. The provider of brokerage services and data analytics continued last week’s downturn. Its Accumulation/Distribution Rating has fallen to D from B earlier this month.

FMC Technologies () dropped 3 points, or 5% to 56.88 in brisk trading. The maker of valves and fittings for the energy industries pulled back after a five-session advance. FMC is forming in a double-bottom base, but it’s a distance away from the possible 66.06 buy point.

Dril-Quip () gapped down and sliced its 200-day moving average. Shares tumbled 5.47, or 10%, to 46.96 on huge volume. The maker of oil drilling and production equipment reported Q1 earnings and sales below views. And it guided Q1 profit below consensus estimates.

Gainers were scarce. But FTI Consulting () gapped above its 50-day moving average. Shares rallied 6.21, or 11%, to 62.09. But it pulled back after hitting an all-time high of 63.41. Late Thursday, the company reported a 20% rise in Q4 earnings and a 29% increase in sales. Both were above views.

11:15 a.m. Update: Indexes See More Red

By VINCENT MAO

Stocks extended harsh losses Friday as a string of reports added to worries over the economy.

At 10:48 a.m. EST, the NYSE composite slumped 2.1% and S&P 500 1.9%. The Dow and Nasdaq dropped 1.8% each. All 30 Dow components were in the red. American International Group () took the hardest hit, as it tumbled 7%.

Volume was tracking higher on both exchanges. Breadth was horrid, with decliners swamping advancers by about 6-to-1 on the NYSE and nearly 5-to-1 on the Nasdaq.

The Chicago Purchasing Managers index came in at a worse-than-expected read of 44.5. The downturn marked a contraction in regional factory activity and provided more evidence of a slowing economy.

Meanwhile, the revised University of Michigan consumer sentiment index rose to 70.8, ahead of estimates. But stocks largely ignored this bit of good news.

China Medical Technologies () gapped down and dived 6.60, 12%, to 47.91 in wicked trade. Late Thursday, the company handily topped views with a 40% rise in fiscal Q3 earnings. Its gross margins, however, fell to 63.2% from 72.6% in the year-ago period.

Central European Distribution () dropped 2.57 to 57.30 in heavy trading. That pushed the liquor distributor about 1% under a 57.91 buy point from a cup-with-handle pattern.

Gafisa () gave up 1.18 to 39.40. The Brazilian home builder pulled back after a six-session run.

On the upside, Greif () added 0.84 to 68.58. On Wednesday, the container maker reported a 93% jump in fiscal Q1 earnings. And it improved its after-tax margin for the fourth-straight period.

10:15 a.m. Update: Stocks Take Early Beating

By VINCENT MAO

Stocks were down hard in early trading Friday. They opened lower and have kept on sliding.

At 9:54 a.m. EST, the NYSE composite tumbled 1.6%, the S&P 500 1.5%, the Dow 1.4% and the Nasdaq 1.2%.

Volume was tracking slightly lower on both exchanges.

Hansen Natural () gapped down and sank 3.14, or 7%, to 41.01. Late Thursday the beverage supplier delivered Q4 earnings and sales ahead of views, thanks to strength in its Monster Energy line. But concerns over its margins pushed the stock down. Hansen’s gross profit as a percentage of net sales slipped to 51% from 53.1% in the year-ago period.

Nokia () gave up 1.15 to 36.75. The cell phone maker’s Relative Strength line is already at a new high a good sign. But big volume has been missing in recent weeks as the stock shapes a new base.

On the upside, Southwestern Energy () climbed 1.69 to 69.34 in fast trade. After Thursday’s close, the oil producer easily beat views with a 105% pop in Q4 profit. It was also the third straight period of accelerating growth. The company also raised its production outlook and announced a 2-for-1 stock split.

Esterline Technologies () jumped 3.01, or 5%, to 51.15. Late Thursday, the maker of aerospace and defense products trounced views with a 65% rise in fiscal Q1 income. Sales growth accelerated for the eight straight quarter to 45%.

9:15 a.m. Update: Stocks Headed For Bad Open

By VINCENT MAO

Stock futures pointed a much lower open Friday on worries over the economy.

Nasdaq futures slumped 24 points vs. fair value, S&P 500 futures dropped 14 points and Dow futures skidded 116 points.

In economic news, personal income climbed 0.3% in January, slightly above expectations of 0.2%. Spending rose 0.4% double economists’ estimates. But the gain was largely due to inflation. Adjusted for inflation, spending was flat.

The Personal Consumption Expenditure index, the Fed’s preferred measure of inflation, ticked up 0.3% as expected. On a year-over-year basis, the index rose 2.2%, or above the high-end of the central bank’s comfort zone of 2%.

The Chicago purchasing managers index for February will be released at 9:45 a.m. EST. A decline to 49.5 is expected for the regional manufacturing gauge. Readings under 50 indicate contraction.

At 10 a.m. EST, the revised University of Michigan consumer sentiment index will be out.

Several Fed members are slated to give speeches throughout the trading session.

American International Group () dropped 4% in pre-market trading. Late Thursday, the financial services giant reported a Q4 loss of $5.29 billion, or $1.25 a share, hurt by credit-related derivatives. This was much worse than analysts’ expectations for a loss of 60 cents.

Assured Guaranty () surged 16% in pre-open trading. Financier Wilbur Ross will invest up to $1 billion in the reinsurance firm.

But its group mates took heat. Ambac Financial () fell 7% in the pre-market. CNBC reported that a bailout plan for the troubled bond insurer hit a roadblock. Apparently, rating agencies are demanding more money from the consortium of banks involved in the rescue.

MBIA () dropped 4% in the pre-open. In a regulatory filing, the bond insurer said it expects further write-downs due to the continued fallout in the housing market. The company also said that it’s booking new business.

Meanwhile, Deckers Outdoor () tumbled 9% in pre-open trading. The footwear maker reported Q4 profit and revenue above views, but it gave a weak Q1 earnings forecast.