Fed Sinks Markets in Mere Minutes — Thursday’s IP Market Recap

by Marc Bastow | January 3, 2013 5:09 pm

[1]A roller-coaster day was punctuated by a big drop at 2 p.m. sharp, when a release of the Federal Reserve meeting’s minutes put a damper on Thursday’s trading session.

Several members of the Fed expressed concerns about the growing size of the Reserve’s balance sheet, and suggested an end to the central bank’s bond-buying program sooner than investors expect. The news drove the major indices lower, with the Nasdaq ending down 0.38% to 3,100.57, the S&P falling by 0.21% to 1,459.37, and the Dow Jones off 0.16% to 13,391.36.

Family Dollar (NYSE:FDO[2]) was one of the day’s biggest losers, shedding 13% after reporting disappointing earnings and a weak outlook for the remainder of the year. The news sent competitors Dollar General (NYSE:DG[3]) and Dollar Tree (NASDAQ:DLTR[4]) down too, though fractionally.

Limited Brands (NYSE:LTD[5]) was among retailers reporting December same-store sales[6] Thursday. LTD shares fell nearly 6% after the Victoria’s Secret owner’s results fell short of forecasts, while Gap Inc. (NYSE:GPS[7]) gained 2% on better-than-expected sales and the announcement of a $1 billion stock buyback plan.

However, Wall Street wasn’t all bad Thursday.

SunPower (NASDAQ:SPWR[8]) sure didn’t notice the down day. SPWR shares flared by 48% after Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A[9], BRK.B[10]) announced it was investing between $2 billion and $2.5 billion in two of the solar company’s projects. The news sent the sector’s stocks charging, with Trina Solar (NYSE:TSL[11], +18.1%) and First Solar (NASDAQ:FSLR[12], +7.6%) among notable gainers.

Shares of Spam producer Hormel (NYSE:HRL[13]) headed higher after announcing it was buying the Skippy peanut butter brand[14] from Unilever (NYSE:UL[15]) for $700 million and announced a 13% increase in its dividend. Hormel shares gained 3%; UL finished down almost 1%.

Microsoft (NASDAQ:MSFT[16]) purchased privately held R2 Studios[17] in a move to take advantage of R2’s home-connectivity technologies. MSFT also spent the day teasing the possible release date of its Xbox 720 system[18] to coincide with June’s Electric Entertainment Expo. Neither piece of news excited investors as shares slid more than 1%.

Lastly, Burger King (NYSE:BKW[19]) is making another run at McDonald’s (NYSE:MCD[20]) by changing its menu[21] with the first change to its chicken offerings. Instead of selling chicken tenders, BKW will switch to chicken nuggets … a disappointment to those perfectly content with the tenders.

Three Up

• Vringo (AMEX:VRNG[22]): Up 19.9% (58 cents) to $3.50.
• Herbalife (NYSE:HLF[23]): Up 12.9% ($4.15) to $36.28.
• Ross Stores (NASDAQ:ROST[24]): Up 8% ($4.34) to $58.78.

Three Down

• Rambus (NASDAQ:RMBS[25]): Down 6.5% (34 cents) to $4.90.
• GameStop (NYSE:GME[26]): Down 5.1% ($1.30) to $24.36.
• UnitedHealth (NYSE:UNH[27]): down 4.7% ($2.55) to $51.99.

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

Source URL: https://investorplace.com/2013/01/thursdays-ip-market-recap-adp-hrl-ul-spwr-brk-a-brk-b/

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