A Mixed First Day Back: Monday’s IP Market Recap

by Marc Bastow | September 4, 2012 4:42 pm

A Mixed First Day Back: Monday’s IP Market Recap

Stocks wandered in and out of positive territory on Monday. The Dow Jones Industrials were down 100 points early in the morning after a disappointing manufacturing report, before slowly making headway and finishing the day down 55 points.

Despite an indication from Ben Bernanke[1] on Friday of possible moves to bolster the economy, investors are now focused on the ECB’s meetings later this week where leaders of the EU will continue searching for ways to solve the eurozone crises. Investors are also looking toward reports this week from ADP (NYSE:ADP[2]) on U.S. private-sector payrolls and the ever-critical August jobs report due Friday.

For the day, the Nasdaq managed the only gain among the three major indexes, rising 0.26% to 3,075, while the S&P fell 0.12% to 1,404 and the Dow slumped 0.42% to 13,035.

Manufacturing activity in the U.S. slumped[3] for the third straight month, as the Institute for Supply Management reported that its August manufacturing index slipped to 49.6 compared to a reading of 49.8 in July. Any result below 50 represents contraction, while any reading above it reflects growth. The report also showed that new orders declined, with that reading dropping to 47.1 in August from 48 the prior month.

Auto makers, however, reported better-than-expected monthly sales on Tuesday as General Motors (NYSE:GM[4]),  Ford (NYSE:F[5]) and Chrysler all saw improved sales in August. Ford shares rose just over 1%, while GM was down a fraction.

In other corporate news, Amazon (NASDAQ:AMZN[6]) announced an agreement[7] with the EPIX cable channel to bring movies and content to its Amazon Prime streaming service. The announcement did little to move the needle on Amazon, but it was a killer to rival Netflix (NASDAQ:NFLX[8]), whose stock dropped over 6% on the news.

On the earnings front, Campbell’s (NYSE:CPB[9]) announced top- and bottom-line improvements [10]in its fourth quarter, and as a bonus pointed toward a strong 2013, a further sign of a solid turnaround by CEO Denise Morrison[11] who joined the company in 2011. CPB finished the day up a fraction.

Smithfield Foods (NYSE:SFD[12]) had just the opposite type of quarter, as earnings and revenues were hurt by weak demand for pork products. Smithfield’s results marked the second straight quarter of missed analyst expectations, but after an early-morning drop, the stock finished up over 3%.

Both Facebook (NASDAQ:FB[13]) and Groupon (NASDAQ:GRPN[14]) slumped, hitting new year-to-date lows. Groupon managed to rally a bit to gain just over 2%, but is down nearly 80% YTD. Facebook finished down nearly 2% and is down 54% from its IPO price[15] in May.

Finally, Apple (NASDAQ:AAPL[16]) is expected to unveil its new iPhone 5 on Sept. 12[17]. Expectations are the phones will hit the shelves on Sept. 23. Apple stock traded up over 1% on the day helping the Nasdaq end in positive territory.

Wednesday’s earnings announcements include InvestorPlace Real America Index[18] component Dollar General (NYSE:DG[19]) along with notables Navistar (NYSE:NAV[20]) and H&R Block (NYSE:HRB[21]).

Three Up

Three Down

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

Endnotes:
  1. indication from Ben Bernanke: http://investorplace.com/2012/08/do-nothing-bernanke-is-dead-to-me/
  2. ADP: http://studio-5.financialcontent.com/investplace/quote?Symbol=ADP
  3. Manufacturing activity in the U.S. slumped: http://nvestorsreadtwoeconomicreportsshowingsluggishnessintheU.S.economy.TheDowJonesindustrialaverage,theS&P500andtheNasdaqalltradeddownbetween0.5%and0.7%.TheDowdroppedasmuchas100pointsinmorningtrading.ManufacturingactivityintheU.S.slumpedagaininAugust,contractingforthethirdstraightmonth.TheInstituteforSupplyManagementreportedTuesdaythatitsmonthlyindexslippedto49.6.Economistshadbeenexpectingtheindextocomeinflatwithareadingof50,accordingtoBriefing.comconsensus.That
  4. GM: http://studio-5.financialcontent.com/investplace/quote?Symbol=GM
  5. F: http://studio-5.financialcontent.com/investplace/quote?Symbol=F
  6. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  7. announced an agreement: http://investorplace.com/2012/09/amazon-adds-streaming-content-with-epix-deal/
  8. NFLX: http://studio-5.financialcontent.com/investplace/quote?Symbol=NFLX
  9. CPB: http://studio-5.financialcontent.com/investplace/quote?Symbol=CPB
  10. top- and bottom-line improvements : http://investorplace.com/2012/09/campbell-soup-tops-q4-estimates/
  11. solid turnaround by CEO Denise Morrison: http://investorplace.com/2012/08/should-i-buy-campbell-soup-3-pros-3-cons/
  12. SFD: http://studio-5.financialcontent.com/investplace/quote?Symbol=SFD
  13. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  14. GRPN: http://studio-5.financialcontent.com/investplace/quote?Symbol=GRPN
  15. down 54% from its IPO price: http://investorplace.com/ipo-playbook/facebook-keeps-breaking-the-floor-fb/
  16. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  17. unveil its new iPhone 5 on Sept. 12: http://investorplace.com/2012/09/tuesday-apple-rumors-iphone-5-debuts-next-week/
  18. Real America Index: http://investorplace.com/real-america-index/
  19. DG: http://studio-5.financialcontent.com/investplace/quote?Symbol=DG
  20. NAV: http://studio-5.financialcontent.com/investplace/quote?Symbol=NAV
  21. HRB: http://studio-5.financialcontent.com/investplace/quote?Symbol=HRB
  22. KSWS: http://studio-5.financialcontent.com/investplace/quote?Symbol=KSWS
  23. ISIS: http://studio-5.financialcontent.com/investplace/quote?Symbol=ISIS
  24. YELP: http://studio-5.financialcontent.com/investplace/quote?Symbol=YELP
  25. OWW: http://studio-5.financialcontent.com/investplace/quote?Symbol=OWW
  26. CNX: http://studio-5.financialcontent.com/investplace/quote?Symbol=CNX

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