After a decent start to the day, U.S. markets sank like a stone, as investors took the market leaders out in the alley and shot them. Once again, a turnaround in crude oil prices was to blame.
Recent market stalwarts, such as Netflix, Inc. (NASDAQ:NFLX), Home Depot Inc (NYSE:HD) and Facebook Inc (NYSE:FB) got hammered as well.
Crude oil was up in the morning until a new gasoline supply inventory showed buildups of 8.4 million barrels of gasoline and 6 million barrels of diesel and heating oil. That report completely overrode a more bullish report that crude oil inventories, while rising 234,000 barrels last week, were still below market forecasts. But by the end of the day, oil was still about 0.2% higher.
The Dow Jones Industrial Average, down 350 points intraday, finished off by 2.2%, while the S&P 500 was 2.5% down. The Nasdaq was creamed, finishing 3.4% lower. Sectors were lower across the board, with the most weakness in energy, healthcare and financials.
Chipotle Mexican Grill, Inc. (NYSE: CMG), Metlife Inc (NYSE:MET), and Atmel Corporation (NASDAQ:ATML) are three of today’s best stocks.
Chipotle Mexican Grill, Inc. (CMG)
CMG stock rose nearly 6% today after the worst three-month performance in its history. The stock recently fell from $750 to $400, following two separate incidents of E. coli poisoning in its chain of restaurants.
Boosting the stock today were the optimistic comments made by company executives at an ICR investment conference in Orlando, FL. The company said that the Centers for Disease Control will soon announce an end to the E. coli outbreak, and customers will once more have trust in them. Looking to ease investors’ fears that margins will be hurt by increased spending on safety, they reassured the conference attendees that they can get back to having superb restaurant margins once again.
In addition, CMG still plans to open up to 235 new restaurants this year. CMG has pledged to have new protocols to prevent any further food contamination problems.
Metlife Inc (MET)
MET stock was a big gainer today amid word that it plans to eliminate a large segment of its retail life insurance unit, and the new $240 billion entity is expected to produce better results going forward. The company is also thinking of doing a spinoff or sale of the same unit. Any such move would need approval from the Securities and Exchange Commission (SEC).
MET stock got another lift as Credit Suisse AG (ADR) analysts reacted favorably to the announcement by raising their price target on MET from $57 to $60 a share. MET stock, up more than 5% in the morning, finished up over 2% for the day.
Atmel Corporation (ATML)
ATML stock rose almost 4% today on a market-leading volume of 26 million shares, after Microchip Technology Inc. (NASDAQ:MCHP) made a new bid that Atmel says is superior to the $4.6 billion one they received from Dialog Semiconductor PLC last September.
Under the new proposal, ATML would receive $8.15 a share, of which $7 is cash, and the rest is stock. However, the termination fee for backing out of the first deal would be a steep $137.3 million for Atmel.
The original deal from Dialog was for $9 a share. However, Dialog’s share price has dropped some 36% since that deal was made, which makes the value of their offer only about $7.84 a share now.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
