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Casino Stocks Go Cold — Monday’s IP Market Recap

Chinese credit crunch ensnares Macau, gaming stocks


If you’re a betting man — and I’m not anymore after Sunday, when the Buffalo Bills couldn’t beat a measly three-point spread against the Cincinnati Bengals (or beat the Bengals at all) — you would’ve guessed that Monday’s Hong Kong rout of casino stocks would spill over into the American exchanges.

And unlike Ryan Fitzpatrick & Bafflingly 3-1 Co., you’d have been a winner.

A credit crunch for the underground financing of so-called “junket operators,” which not only arrange travel for Chinese from the mainland to Macau but also lend money for gambling, sent casino stocks reeling in Hong Kong early Monday. The bloodbath continued in the U.S., with MGM Resorts International (NYSE:MGM) plunging 11.41% to $8.23, Melco Crown Entertainment (NASDAQ:MPEL) sinking 11.19% to $7.38, Las Vegas Sands (NYSE:LVS) falling 4.25% to $36.71 and Wynn Resorts (NASDAQ:WYNN) headed down 3.83% to $110.67 — all four have properties in the Macau, which is the world’s biggest center of gaming.

However, with Macau expected to release September gaming revenue numbers Monday predicted to be up to 45% higher, casino stocks could find themselves swinging into a heater later this week.

Morgan Stanley (NYSE:MS) continued its perilous plunge Monday with a nearly 8% drop to $12.47. The financial stock is down almost 60% from its 52-week high of $30.99 and is down 54% year-to-date. Similarly struggling was Goldman Sachs (NYSE:GS), down 4.73% Monday to $90.08 — off 46% from the start of the year.

Airline stocks also were pulverized Monday, with JetBlue (NASDAQ:JBLU, -14.67%), United Continental (NYSE:UAL, -11.71%), Delta Air Lines (NYSE:DAL, -11.33%) and Southwest Airlines (NYSE:LUV, -8.58%) making steep dives.

Three Up

  • Pharmaceutical Product Development (NASDAQ:PPDI): Up 25.8% ($6.62) to $32.28.
  • Yahoo (NASDAQ:YHOO): Up 2.73% (36 cents) to $13.53.
  • Lorillard (NYSE:LO): Up 2.03% ($2.25) to $112.95.

Three Down

  • Diamond Foods (NASDAQ:DMND): Down 10.31% ($8.23) to $71.57.
  • Micron (NASDAQ:MU): Down 14.09% (71 cents) to $4.33.
  • Sprint Nextel (NYSE:S): Down 10.2% (31 cents) to $2.73.

As of this writing, Kyle Woodley did not own a position in any of the aforementioned stocks.

Article printed from InvestorPlace Media,

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