It was a back-and-forth day for the market, and though stocks spent the bulk of the day in the red, when push came to shove by the time the closing bell rang the bulls won out. The S&P 500’s close of $2033.36 was just a hair better than Friday’s closing level.
It wasn’t a winning day for all stocks, however. Freeport-McMoRan Inc. (NYSE:FCX), Morgan Stanley (NYSE:MS) and Valeant Pharmaceuticals Intl. Inc. (NYSE:VRX) all started the new week in a discouraging direction.
Here’s what happened.
Valeant Pharmaceuticals (VRX)
Looks like Hillary Clinton at least partially won a battle without even firing a shot.
With the echoes of a Clinton’s infamous tweet from Sept. 21st still ringing in, well, everyone’s ears, Valeant Pharmaceuticals zapped itself on its own terms before regulators began to chip away at the company on their terms.
Going forward, the biotech outfit known for acquisitions and subsequent price increases of the drugs it buys as part of those deals will be dialing back its aggressive execution of the business model.
A more muted form of the business model, of course, takes aim at the top and bottom line that VRX investors had grown to know and love. Ergo, VRX was sent nearly 8% lower on Monday, and the market began to see Valeant as just another tepid biopharma name.
Morgan Stanley (MS)
Few were surprised that banker/broker Morgan Stanley had a tough third quarter. What was surprising, though, was the extent to which the company struggled.
Last quarter, Morgan Stanley earned 42 cents per share on $7.77 billion in revenue. That’s was much less than the 83 cents per share the company earned in Q3 of 2014, when it saw a top line of $8.8 billion.
The prod for the bulk of the 5% selloff from MS, though, was the fact that last quarter’s numbers missed both the top and bottom line estimates. Analysts were calling for earnings of 62 cents per share and revenue of $8.53 billion.
Lending activity was up for the quarter, as was wealth management revenue. But, bond trading and investment banking activity were both down considerably for the quarter.
Freeport-McMoRan (FCX)
Last but not least, last month’s rebound effort from Freeport-McMoRan has all but withered away thanks to today’s 4% dip from FCX shares, sending FCX stock slipping to a lower low.
The selloff was driven by yet another pullback in commodity prices, including Freeport-McMoRan’s bread and butter, copper, which declined 2.0%.
Fanning the bearish flames for FCX may have been this commentary posted at Forbes:
“Commercial futures hedgers (often considered the “smart money”) have been cutting their bullish bets ever since copper bottomed in August, while large traders (considered the “dumb money”) have been paring back their short positions. The last several times this role reversal occurred (for example, May 2015), copper experienced bearish moves shortly after.”
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
