Though it could have been worse, the knee-jerk bullish response to Wednesday’s decision by the Fed to not raise interest rates has already fizzled out. The S&P 500 ended the day at 2164.69, down 0.57%, and waffling right at a key technical line in the sand.
Not every stock just drifted on Friday, however. Yahoo! Inc. (NASDAQ:YHOO), salesforce.com, inc. (NYSE:CRM) and Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) all used more than their fair share of red ink. Here’s a closer look at what happened.
Petroleo Brasileiro SA Petrobras (ADR) (PBR)
Brazilian oil company Petroleo Brasileiro SA Petrobras — better known as just Petrobras — didn’t do anything wrong today, per se. But, evidence that perception is everything and proof that a company can be in the wrong place at the wrong time, PBR fell 3% all the same.
The crux of the selloff PBR suffered on Friday was the announcement that it will be selling off 90% of its stake in the NTS pipeline, raising $5.2 billion in the process. While the market was initially positive on the deal, it quickly came to be interpreted as a sign of weakness. Fanning the bearish flames was Federal Reserve Bank President Eric Rosengren, who commented today that the Fed’s unwillingness to raise interest rates now may force it to raise them quickly later on, creating a threat to the economic recovery.
Of course, the 3.4% plunge crude oil prices took today certainly didn’t help prop the price of PBR, either.
salesforce.com, inc. (CRM)
Though the rumors that Twitter Inc (NYSE:TWTR) was a buyout target led TWTR shares 20% higher on Friday, the news wasn’t as exciting for owners of salesforce.com, which was named as one of the potential buyers. CRM shareholders may be concerned the sales management outfit could be fighting off more than it can financially chew.
Salesforce has already made nine smaller acquisitions this year, and assuming Twitter commands a recently-typical price for social media companies, it could cost a buyer something on the order of $18 billion. Problem is, Salesforce doesn’t have $18 billion to fork over, and would have to take on debt or sell stock to get a deal done.
CRM fell 5.6% today.
Yahoo! Inc. (YHOO)
Last, but not least (though the news actually came during yesterday’s trading hours, the full scope of it wasn’t known until today), Yahoo! was hacked and key data for 500 million Yahoo users was compromised. The most upsetting detail of the affair that sent YHOO tumbling 3.1%, however, was news that CEO Marissa Mayer has known about the data breach since July, yet has said nothing.
Although most observers say the breach isn’t likely to deter Verizon Communications Inc. (NYSE:VZ), investors aren’t so sure it won’t impact the final price Verizon pays. Many users have already closed their accounts, and won’t likely sign up again once Verizon takes over.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
