HPQ Calls Shenanigans! — Tuesday’s IP Market Recap

by Marc Bastow | November 20, 2012 4:55 pm

[1]The biggest cliff Tuesday wasn’t the fiscal one — it was the cliff Hewlett-Packard (NYSE:HPQ[2]) shares fell off after announcing an $8 billion writeoff on its investment[3] in enterprise software technology company Autonomy.

HPQ said the company’s former management “used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company” before Hewlett-Packard made the $10 billion acquisition in 2010, though former Autonomy chief Mike Lynch denied the claims[4].

Hewlett-Packard also reported better-than-expected earnings, albeit on a drop in sales, and HPQ shares dropped 12% to finish at a nearly two-decade low.

HPQ led the markets down in early morning trading, and after a brief rally into positive territory, the major indices again retreated when Fed Chairman Ben Bernanke essentially scolded Congress to find a solution to the fiscal cliff during an address to the Economic Club of New York.

The markets finished mixed, with the S&P 500 and Nasdaq up fractionally to 1,387.82 and 2,916.68, respectively, while the Dow Jones was down marginally to 12,788.51.

Best Buy (NYSE:BBY[5]), seemingly trying to out-woe Hewlett-Packard, fell 13% to just below $12 — its lowest price since late 2000 — after announcing earnings and revenues that missed forecasts, and cutting its outlook for the remainder of the year.

Krispy Kreme (NYSE:KKD[6]) jumped nearly 24% following better-than-expected results reported after the closing bell Monday. Green Mountain Coffee Roasters (NASDAQ:GMCR[7]) surged 7% before settling for a nearly 2% gain after the company announced the appointment of a new CEO, Brian Kelley, effective Dec. 3. GMCR also recently unveiled a new espresso machine[8] to go up against Starbucks‘ (NASDAQ:SBUX[9]) Verismo.

Visa (NYSE:V[10]) set yet another all-time intraday high Tuesday before resting up fractionally, at an all-time closing high of $146.34.

Lastly, the Commerce Department reported that housing starts rose to their highest level in four years; however, housing permits declined to 866,000, less than the estimated 870,000.

Three Up

• DSW (NYSE:DSW[11]): Up 8.9% ($5.51) to $67.80.
• Groupon (NASDAQ:GRPN[12]): Up 8.4% (26 cents) to $3.37.
• Hovnanian (NYSE:HOV[13]): Up 6.5% (32 cents) to $5.27.

Three Down

• Arch Coal (NYSE:ACI[14]): Down 7.1% (49 cents) to $6.40.
• Nuance Communication (NASDAQ:NUAN[15]): Down 6.8% ($1.47) to $20.10.
• Leap Wireless (NASDAQ:LEAP[16]): Down 6% (38 cents) to $5.92.

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

Source URL: https://investorplace.com/2012/11/hpq-and-bernanketake-market-down-tuesdays-ip-market-recap-hpq-kkd-gmcr-bby-v/

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