Europe Dampens the Dow — Wednesday’s IP Market Recap

by Marc Bastow | March 27, 2013 5:26 pm

Europe Dampens the Dow — Wednesday’s IP Market Recap

IPMarketRecap Europe Dampens the Dow    Wednesday's IP Market Recap [1]In an about-face from Tuesday’s big rally on domestic economic news, stocks headed down Wednesday. News that shook up European markets moved across the pond to take a toll on U.S. markets — and in particular the Dow Jones — until a late rally managed to cut down the losses.

A European Union report showed that a key business climate indicator fell in March, extending a downturn that began in September 2011. Combined with fears of a bank run in Cyprus when banks open on Friday, the report was more than enough to scare off investors. Helping to fan the flames was a domestic National Association of Realtors report that showed pending home sales fell 0.4% in February, despite growth estimates of 2%.

For the day, the damage was mixed, as a late rally managed to allow the Nasdaq to eke out a 0.12% gain and close at 3,256.52, while the S&P 500 rallied late to close down a fraction at 1,562.85. The Dow dropped 0.23% to finish at 14,526.16.

The biggest Dow loss was at JPMorgan (NYSE:JPM[2]), which dropped just under 2% as federal prosecutors look into concerns the company ignored warning signs of fraud in the 2008 Bernie Madoff Ponzi scheme. German banking giant Deutsche Bank (NYSE:DB[3]) also took a tumble, falling nearly 3% on concerns it will have its credit rating lowered.

Cliffs Natural Resources (NYSE:CLF[4]) took a beating, down nearly 14% as the stock — the worst performer in the S&P 500 this year — was hit by both Morgan Stanley and Credit Suisse with lowered price targets.

Retailer Francesca’s (NASDAQ:FRAN[5]) declined nearly 6% after announcing that members of its management team in addition to private-equity investor[6] CCMP Capital plan to sell more than¬† 7 million shares.

A number of tech stocks did manage to buck the day’s trend. AOL (NYSE:AOL[7]) improved by more than 8% on an “overweight” upgrade from Barclays while VMware (NYSE:VMW[8]) rose over 3% on an upgrade to “strong buy” at brokerage firm ISI. Facebook (NASDAQ:FB[9]) gained more than 3% on no particular news.

Finally, Goldman Sachs (NYSE:GS[10]) shares rose just under 1% as Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A[11], BRK.B[12]) traded in warrants[13] issued in 2008 for around 10 million shares in the company. Berkshire is now one of the top 10 shareholders at GS.

 Three Up

Three Down

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.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/11/IPMarketRecap.gif
  2. JPM: http://studio-5.financialcontent.com/investplace/quote?Symbol=JPM
  3. DB: http://studio-5.financialcontent.com/investplace/quote?Symbol=DB
  4. CLF: http://studio-5.financialcontent.com/investplace/quote?Symbol=CLF
  5. FRAN: http://studio-5.financialcontent.com/investplace/quote?Symbol=FRAN
  6. private-equity investor: http://investorplace.com/2013/03/try-on-this-unique-retailer-for-size/
  7. AOL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AOL
  8. VMW: http://studio-5.financialcontent.com/investplace/quote?Symbol=VMW
  9. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  10. GS: http://studio-5.financialcontent.com/investplace/quote?Symbol=GS
  11. BRK.A: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.A
  12. BRK.B: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.B
  13. traded in warrants: http://investorplace.com/2013/03/warren-buffett-goes-long-on-goldman-sachs/
  14. TPX: http://studio-5.financialcontent.com/investplace/quote?Symbol=TPX
  15. GKK: http://studio-5.financialcontent.com/investplace/quote?Symbol=GKK
  16. DECK: http://studio-5.financialcontent.com/investplace/quote?Symbol=DECK
  17. RAX: http://studio-5.financialcontent.com/investplace/quote?Symbol=RAX
  18. MM: http://studio-5.financialcontent.com/investplace/quote?Symbol=MM
  19. DG: http://studio-5.financialcontent.com/investplace/quote?Symbol=DG

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