Basking in the news that China was opening up its stock market to direct foreign investment, traders were giddy enough to push even some American market indices to record highs … even if just barely. Meanwhile, although the U.S. dollar’s rally seems increasingly strained, it continues to be strong enough to keep sending gold to new lows. Today was no exception, prompting another wave of traders — albeit a small wave — into the U.S. equity market.
It wasn’t good news for all American stocks today, however. Alpha Natural Resources, Inc. (ANR), Comcast Corporation (CMCSA), and Rayonier Inc. (RYN) all took one on the chin (and for good reason) even though the broad market didn’t.
Comcast Corporation (CMCSA)
If President Obama gets his way, the United States’ internet users may soon find some websites and web-delivered data load faster … or slower, as the case may be.
That’s because the President today officially jumped on the “net neutrality” bandwagon by articulating his idea for greater regulation of the internet “pipes” that can accelerate or decelerate how quickly data is delivered over the web.
His mission? To level the playing field for all, and dispense with internet service provides playing favorites — sometimes for pay — with which sites they prioritize in their role as middlemen.
The impending legislation isn’t a death blow struck right between the eyes of Comcast Corporation, but it’s a pretty nasty wound that’s going to take some time to heal. In the meantime, Comcast tumbled 4% on Monday.
A Q3 earnings beat wasn’t even close to being enough to soothe startled shareholders of lumber and wood-based product company Rayonier today. Rayonier shares fell 15% on a combination of a 17% cut in its dividend, lowered guidance for all of 2014, and an announcement that it would be restating its numbers for the first and second quarter of the year.
Truth be told, the restatement of Q1’s and Q2’s figures isn’t a game-changer. Income from operations was overstated by about $2 million for both quarters due to an understatement in the way it booked depletion for its cost of goods sold. Those are relatively minor figures compared to the $43.3 million and $18.4 million the organization earned for the first and second quarter of this year, respectively.
However, the market may be assuming that where there’s smoke, there’s fire.
Alpha Natural Resources (ANR)
Last but not least, a big piece of the recent gain enjoyed by owners of Alpha Natural Resources was wiped away with today’s 9% setback.
It wasn’t results that sparked the setback. The previous quarter’s numbers were unveiled two Thursday’s ago (on October 30th), and the earnings beat ultimately sparked a 50% rally from Alpha Natural Resources shares over the course of the following week … a rally further prodded by sweeping GOP victories in last week’s voting.
Reality finally sunk in today, though, when the market realized coal prices have barely budged since hitting multi-year lows in late October. If the much-anticipated rebound was really underway, we would have seen at least a little more life from thermal and met coal price levels.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.