Markets Lack Direction: Tuesday’s IP Market Recap

by Marc Bastow | October 2, 2012 5:15 pm

[1]If it seems like nobody can make a decision on which way to play this market, that’s because of trading days like Tuesday, where investors stayed mostly on the sidelines as stocks slipped in the late morning before recovering a little bit of ground by the afternoon.

Despite more upbeat news in the auto sector[2], investors focused on continued problems in Spain, where a formal request for a bailout of that country’s ailing banks still weighs on European markets. As reported by[3] CNN Money, Moody’s (NYSE:MCO[4]) said late Monday that Spain’s banks may face a greater capital shortfall than the government estimated last week.

Markets stayed within a narrow band during the afternoon, and when the bell finally rang the Nasdaq managed to ring up a 0.21% gain to end at 3,120.04, while the S&P 500 finished up 0.09% at 1,445.75. The Dow could not make up ground, losing 0.24% to end at 13,482.36.

U.S. automakers released September sales figures that saw continued improvement in the sector, as Chrysler, owned by Fiat (PINK:FIATY[5])  reported a 12% year-over-year increase in U.S. sales last month, its best September sales since 2007.  General Motors (NYSE:GM[6]) reported a 1.5% increase from year-ago figures, and its stock rose just over 2% on the day.

Shares of restaurant company Chipotle (NYSE:CMG[7]), one of the fastest-growing companies (and stock prices)[8] in the industry, fell nearly 5% as hedge fund manager David Einhorn said the company faces serious competition from Yum! Brands’ (NYSE:YUM[9]) Taco Bell, and that a combination of rising food costs and higher labor expenses could threaten Chipotle’s bottom line. YUM managed to fall nearly 2% on the news.

Real estate listing and information provider Zillow (NASDAQ:Z[10]) fell almost 5% after the Securities and Exchange Commission released a letter asking why the real estate site didn’t disclose certain sales data and information[11] about its accounting methods.

Shares of specialty apparel and accessory retailer Express (NYSE:EXPR[12]) sank more than 22% after the company lowered its fiscal third-quarter expectations, citing a lack of traffic in September.  The negative outlook crushed Fifth & Pacific (formerly Liz Claiborne) (NYSE:FNP[13]) which sank more than 11%, and specialty retailer[14] Francesca’s (NASDAQ:FRAN[15]) down with it, losing more than 3% on the day.

Phosphate maker Mosaic (NYSE:MOS[16]) was clobbered, shedding nearly 4% after missing revenue and earnings[17] targets due to supply shortages, a result of production problems at its Florida mining operations. Mosaic also pointed to lower phosphate prices, and the fallout from the news hit Potash (NYSE:POT[18]), which fell nearly 2.5%.

Finally, investment assistance company MSCI (NYSE:MSCI[19]) fell nearly 27% on the day as it was dropped as a benchmark[20] provider for 22 index funds by Vanguard Group, the largest U.S. mutual-fund company.

Three Up

Leap Wireless (NASDAQ:LEAP[21]): Up 8.43% (59 cents) to $7.59

First Solar (NASDAQ:FSLR[22]): Up 4.33% (95 cents) to $22.88

Dick’s Sporting Goods (NYSE:DKS[23]): Up 4.25% ($2.13) to $52.25

Three Down

RadioShack (NYSE:RSH[24]): Down 13.3% (31 cents) to $2.02

Office Depot (NYSE:ODP[25]): Down 6.07% (15 cents) to $2.32

Sprint (NYSE:S[26]): Down 5.41% (28 cents) to $4.90

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he did not hold a position in any of the aforementioned securities.

Source URL: https://investorplace.com/2012/10/markets-cant-find-conviction-tuesdays-ip-market-recap-mco-fiaty-gm-z-cmg-expr-fran/

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