September was going from bad to worse on only its second day for the Standard & Poor’s 500 Index, which was down more than 20 points to under 1,184, shedding about 1.8% in early-morning action. Hopes for QE3 to stimulate the economy are being replaced by the realization that a recession is nearing as job growth, production and consumer confidence are all low.
Warren Buffett’s bet on Bank of America has not protected the banking sector from heading lower, again, as it is the worst-performing group in the market for 2011. Declining stocks outnumber advancing stocks this morning by more than 5-to-1. More than 70% of stocks are trading below their 50- and 200-day moving averages, bringing the exchanges into “Death Cross” territory, when the long-term moving average breaks above the short-term moving average, which is a very bearish indicator.
Off by about 12% was H&R Block (NYSE:HRB) to around $13.40, losing more than $1.70 per share. H&R Block reported less revenue (a drop to $267.7 million from $275.5 million) and higher losses (57 cents per share), which disappointed Wall Street. H&R Block was upgraded Aug. 18 by Standpoint Research to a “buy.” For the week, HRB is up more than 14%.
Netflix (NASDAQ:NFLX) was under $211, off about $22 and 10%. Netflix is losing its streaming deal with the cable channel Starz, which was a huge blow to the stock. This means NFLX will lose streaming rights to Disney and Sony movies. For 2011, Netflix still is up more than 32%.
Brief good news on the housing front has passed, and PulteGroup (NYSE:PHM) is down more than 5%, or 25 cents, to under $4.30 a share. The homebuilder is up more than 8% this week on an upgrade by Ticonderoga and higher sales prices. But the onslaught of bad news from the real estate sector is bringing the stocks lower, again. For the year, PulteGroup is down more than 46%.
JDS Uniphase (NASDAQ:JDSU) was up about 2% to over $13.20, picking up about 22 cents per share. Royal Bank of Canada upgraded the high-tech company to a “buy” with a target price of $18 over the next year. JDS Uniphase is up more than 20% for the week but down about 30% for the quarter.
Rising about $1 to about $63.40, a gain of about 1.5% per share, was Newmont Mining Corp. (NYSE:NEM). A Forbes article this morning projected Newmont Mining heading to $76 per share over the next year. With gold approaching its all-time high, stocks in the sector are surging. If QE3 is actuated, gold could appreciate even more.
Clorox (NYSE:CLX) was up over $69.20, picking up more than 20 cents per share, or about 0.25%. Reports say investor Carl Ichan is betting on a high valuation for Clorox in his bid for board membership. Clorox is up more than 5% for the past week and 11% for the year. Clorox was downgraded on Aug. 11 by Caris & Company and on July 21 by RBC Capital Markets.
Jonathan Yates does not own any of the stocks mentioned in this article.
