For the second consecutive day, the U.S. stock market was crushed by falling oil prices, and quickly spurred many traders to flee to safe havens in precious metals. Oil prices collapsed for the fourth consecutive day, with U.S. crude reaching a six-year low of $47.93 by day’s end.
The latest oil slick was triggered by Saudi Arabia’s elderly King Abdullah saying that his country will have a “firm will” in dealing with oil prices (i.e., they are not yet considering a cut in production).
The Dow Jones Industrial Average, which lost 330 points on Monday, gave back another 131 (0.75%) today. The S&P 500 was also weaker by 0.9%, and the Nasdaq lost 1.27%.
Other than the precious metals, all major sectors finished in the red today. Goldcorp Inc. (USA) (GG) was among several gold stocks that benefited from higher gold prices, and other stocks that held strong against a sinking market were AOL, Inc. (AOL), and El Pollo LoCo Holdings Inc (LOCO).
Goldcorp Inc. (USA) (GG)
On a day when investors were again flocking into precious metals, Goldcorp was a chief beneficiary of shifting market allocations, up more than 7%. Spot gold prices reached a three-month high, mostly due to continued uncertainty over the political strife in Greece, but also as a safe haven against stocks collapsing.
On Monday, Goldcorp also declared its first monthly dividend payment for 2015 of 5 cents per share of GG stock, which will be paid out Jan. 23, for shareholders of record as of the close on Jan. 15.
AOL, Inc. (AOL)
Remember AOL? That darling stock of the 1990s had a stellar day Tuesday, up more than 3% on strong volume of 4.4 million shares. The street was buzzing with a news report by Bloomberg that Verizon Communications Inc. (VZ) had approached AOL for a possible purchase or partnership to expand its mobile video offerings.
Later in the day, Verizon downplayed the report, saying only that there were some good reasons for a potential partnership, but that it had not actively sought to acquire AOL. AOL stock was a bit more muted after that for the remainder of the day, as investors tried to determine who they should believe.
El Pollo Loco Holdings Inc (LOCO)
During a volatile week like this, one has to be “loco” to buy stocks, right?
Well, not if that stock is recent IPO El Pollo Loco. The California-based chicken restaurant chain had its second consecutive big up day, finishing almost 8% higher on 4.9 million shares. On Monday, LOCO stock received an upgrade from Robert W. Baird, from “neutral” to “outperform.” Baird raised its previous price target from $20.26 to $34.00 per share. The upgrade follows a sharp decline in stock price from $38 in November to $20 before the new year.
InvestorPlace’s Dan Burrows believes the selling on LOCO stock has probably been overdone.
As of this writing, Ethan Roberts did not hold any positions in the aforementioned securities.
