The stock market suffered through a grueling day, with stocks down significantly throughout the day. Oil sank to a five-year low, with OPEC reducing its estimate for 2015 production by 300,000 barrels per day, and admitting that demand has weakened.
For the second consecutive day, the CBOE Volatility Index (VIX) spiked higher. Traders are beginning to realize that falling energy stocks are often a portend of further stock market selling to come and are concerned enough to take some profits.
The Dow Jones Industrial Average was lower by 1.5%, while the S&P 500 sank 1.6%, and the Nasdaq Composite was the weakest of the three indices, off 1.7%.
There were no sectors in the green today, but United Continental Holdings Inc (UAL), Burger King Worldwide Inc (BKW) and Hovnanian Enterprises, Inc. (HOV) were three stocks strong enough to buck the general market and still finish well to the upside.
United Continental Holdings Inc (UAL)
UAL stock was up over 6% intraday before a late afternoon selloff reduced that gain to just under 2%. It was one of a handful of airline stocks which have seen their bottom lines increasing recently, mostly due to lower oil prices.
The International Air Transport Association said that even though passengers could see ticket prices decline slightly next year, airline profits in general will be higher due to a brighter global economy. The airline industry’s profits are expected to increase to $25 billion, exceeding the $19.9 billion forecast for this year.
UAL stock has risen about 45% in just the past two months, profiting from the sharp decline in energy prices.
Burger King Worldwide Inc (BKW)
BKW stock was another winner, scorching up well over 6% on today’s chart. RBC Capital raised their rating on BKW stock from sector perform to outperform with a price target of $38.
Additionally, shareholders of Tim Hortons Inc. (USA) (THI) finally approved the $11 billion merger between Tim Hortons and Burger King. The new name after the merger will be Restaurant Brands International, and will trade on both the Toronto and NYSE exchange. The new symbol will be QSR.
Hovnanian Enterprises, Inc. (HOV)
HOV stock blasted over 5% higher today on strong volume of 6.6 million shares after beating earnings and revenue estimates for the fourth quarter.
HOV’s earnings-per-share of 23 cents per share was 3 cents above analysts’ expectations and up 2 cents from the Q4 of last year. Revenue of $698.4 million surpassed the street expectations of $646.8 million.
This might just be the earnings report that HOV stock needs to get back on the right track, after dropping 45% over the past two years. However, even with today’s strong showing, HOV stock is still trading about 5% below its 200-day moving average.
As of this writing, Ethan Roberts did not hold a position in any of the aforementioned securities.
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