U.S. markets took it on the chin today, as oil prices slipped again and retail sales reports were below expectations.
Crude oil was down more than 3%, hitting new 2009 lows after a warning from the International Energy Association was released, noting the global oversupply of oil could get even worse in 2016.
Rising output in the Middle East was cited as a factor, even as oversupply throughout the world continues unabated. Traders were also nervous ahead of next week’s meeting of the Federal Reserve.
Retail sales were up 0.2% in November, below expectations for a rise of 0.4%. Automobile sales were down 0.4%, after sliding 0.3% last month; the November decline was the largest since June. However, sales at clothing stores, electronic and appliance stores, sporting goods/hobby stores and online retailers were brisk.
In other news, the Labor Department reported that the producer price index (PPI) was up 0.3% in November, above expectations that the rate would be unchanged and down 1.4% from a year ago. The PPI fell 0.4% in October, so November’s hike was actually quite large.
The Dow Jones Industrial Average was down more than 300 points, a loss of 1.8%, while the S&P 500 was off 2% and the Nasdaq lost 2.2%. All sectors declined, with energy stocks again the weakest of all, and basic materials and financials hit hard as well.
Despite the gloomy day, some stocks managed to rally. Corning Incorporated (NYSE: GLW), Whole Foods Market, Inc. (NASDAQ:WFM) and Finisar Corporation (NASDAQ:FNSR) were all up on interesting news. Here’s why they are three of today’s best stocks.
Corning Incorporated (GLW)
Corning stock climbed more than 5% higher today after Dow Chemical Co (NYSE:DOW) announced it will purchase Corning’s stake of Down Corning Corp, a joint venture between the two companies since 1943 which manufactures the silicone that is used to make tires.
The deal will be worth a reported $4.8 billion. Under the terms of the deal, GLW will “exchange its 50% interest in Dow Corning Corporation for 100% of the stock of a newly formed entity that will become a wholly owned subsidiary of Corning Incorporated” and have a 40% ownership in Hemlock Semiconductor Group.
The reported merger between Dow Chemical and E I Du Pont De Nemours And Co (NYSE:DD) that was announced earlier this week was made official today, with both stocks selling off on the news.
The deal should close sometime within the first half of the new year.
Whole Foods Market, Inc. (WFM)
WFM stock was doing well today after Thursday’s announcement that the natural and organic foods supermarket have hired Tien Ho as Vice President of culinary and hospitality. Mr. Ho formerly ran the culinary department of Morgans Hotel Group, and at Ma Peche resturant in the Chambers Hotel of New York City, where he was named best new chef by New York Magazine in 2011.
WFM stock has struggled in 2015. It began the year near $50 per share, but recently touched a low near $29. All that was forgotten today as the stock soared more than 8%.
Finisar Corporation (FNSR)
FNSR stock surged 22% today after reporting second-quarter earnings of 25 cents on revenue of $321 million, nicely ahead of analysts’ estimates for 23 cents per share on $314 million.
CEO Jerry Rawls said the fiber optics manufacturer’s revenue was mostly due to a growth in 100 gigabit Ethernet transceivers and other products for telecom WDM applications.
The only negative in the report was that FNSR now expects EPS to come in at 19 cents to 25 cents, and revenue for the current quarter is anticipated at $300 million to $320 million. Analysts expect EPS of 24 cents and revenues of $319 million, so the company may be hard-pressed to meet those goals.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
