Bernanke’s Markets Twist Again: Wednesday’s IP Market Recap

by Marc Bastow | June 20, 2012 5:05 pm

[1]The Fed and its chairman have spoken, as the Federal Open Market Committee announced an extension of  Operation Twist, the policy of swapping short-term bonds in the central bank’s portfolio for ones with a longer duration. The program was due to expire June 30, but will continue through the end of 2012. The Fed also voted to hold interest rates near zero, where they’ve been since December 2008, in an attempt to boost the economy.

With the message out of the way, the markets shrugged. Stocks muddled around during the day before finishing mixed at the end. The Dow lost 0.10% to finish at 12,824, while the S&P lost 0.17% to 1,356. The Nasdaq managed to eke out a fractional gain to finish at 2,930.

Market movements appeared to be tied more to earnings and forecast news, as blue-chip stalwart Proctor & Gamble (NYSE:PG[2]) warned investors[3] for the second time this year of a slowdown in revenues and additional employee cuts. The news sent the stock down nearly 3% on the day. Household products company Church & Dwight (NYSE:CHD[4]) followed suit, slumping 1% on PG’s news.

Reeling Research In Motion (NASDAQ:RIMM[5]) also announced an initiative to slash its workforce[6], with 2,000 to 3,000 employees expected to be trimmed. RIMM fell 4% on the news. Phone-maker Nokia (NYSE:NOK[7]), which also recently announced layoffs, slid 1.5% on the day.

Software maker Adobe (NASDAQ:ADBE[8]) released earnings that showed revenue increasing but not profits[9], and it adjusted its estimates for the remainder of the year. The net result was a drop of 2.75% on the day.

Walgreen (NYSE:WAG[10]) continued its slide from Tuesday, as investors keep pondering its purchase of a stake in Europe’s Alliance Boots[11]. The stock dropped to a 52-week low of $28.53 before finishing down 2.9% at $29.20.

On the plus side of the ledger, after reaching a 52-week low on Tuesday, J.C. Penney (NYSE:JCP[12]) rebounded smartly, up over 5% after investors digested the news of the departure of Michael Francis. Also bouncing back from a beating yesterday was Barnes & Noble (NYSE:BKS[13]), up 3.2% on plans to focus on launching a new partnership with Microsoft (NASDAQ:MSFT[14]) and increasing digital-content sales for its Nook e-book.

Car maker Tesla Motors (NASDAQ:TSLA[15]) jumped 5.5% as its  buy rating was reaffirmed by analysts at Goldman Sachs (NYSE:GS[16]).

Finally, after announcing it would open 1,000 stores in China[17], Burger King (NYSE:BKC[18]) made a return to the market today, using an innovative structure[19] to avoid the typical IPO process[20].

Three Up

• Arena Pharmaceutical (NASDAQ:ARNA[21]): Up 8.4% (78 cents) to $10.48
• Jabil Circuit (NSYE:JBL[22]): Up 6.75% ($1.31) to $20.73
• Advanced Micro Devices (NYSE:AMD[23]): Up 4.48% (26 cents) to $6.07

Three Down

• Cerner (NASDAQ:CERN[24]): Down 4% ($3.48) to $83.43
• Baidu (NASDAQ:BIDU[25]): Down 3.52% ($4.28) to $117.44
• Encana (NYSE:ECA[26]): Down 2.86% (64 cents) to $21.71

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he was long MSFT.

Source URL: https://investorplace.com/2012/06/bernankes-markets-twist-again-wednesdays-ip-market-recap-pg-chd-rimm-nok-adbe-msft-jcp/

---