As September nears its close, U.S. markets were being crushed once again, as a report of growth slowing in China, and ongoing concern about the Fed’s intentions continue to cast a pall over Wall Street.
A weak economic report from China had investors quite concerned, as industrial profits declined by 8.8% in August from the same month a year ago — the largest decline in four years.
Even Apple Inc (NASDAQ:AAPL) was trading lower after posting record-breaking weekend sales of its iPhone 6s and iPhone 6s Plus models.
In U.S. economic news, a decline of 1.4% in the August pending home sales report was below the street’s expectations for a slight gain.
The Dow Jones Industrial Average was down more than 300 points, closing down 1.9%. The S&P 500 slipped 2.6%. The Nasdaq gave back 3%. Sectors were lower across the board, with healthcare, energy, and materials stocks taking their lumps.
Alcoa Inc (AA)
AA stock rose 5.8% today after the aluminum manufacturer announced that its Board of Directors has approved a plan to split the company into two independent, publicly traded companies.
One company will include five business units that make up products related to Bauxite, Alumina, Aluminum, Casting and Energy. The other company will include Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions.
The split will be finalized in the second half of 2016, and AA shareholders will own all of the outstanding shares of both companies, in a tax-free transaction.
AA stock, which recently fell from $14 to $8, has been bouncing back over the past month.
Knowles Corp (KN)
Knowles Corp, a micro-acoustics components firm, jmped today after an analyst upgrade from FBR and Co in a note to investors, from “underperform” to “market perform.” In addition, FBR raised its price target for KN from $17 per share to $18 per share.
The reason for the upgrade was the addition of a fourth Knowles-made microphone in Apple’s new iPhone 6s and iPhone 6s Plus. Previous iPhone models only contained three microphones in them.
KN stock finished 7% higher on the day.
Turtle Beach Corp (HEAR)
Turtle Beach, a company that sells audio peripherals for video game consoles and mobile devices, was up big today, apparently on the release of its Ear Force Recon 50 headsets. Analysts probably weren’t surprised — on Thursday, Oppenheimer analyst Sean McGowan initiated coverage on HEAR stock, giving it a rating of “Outperform” and a price target of $6.00, more than double the current price, even after today’s gains.
Said McGowan, “We view Turtle Beach as an attractive way to play two investment ideas — the resurgence in console video games and accompanying rise in sales of multiplayer online games, and the emergence of HyperSound, a ‘directed audio’ technology that is on the cusp of commercialization.”
HEAR stock rose more than 50% this morning, and finished the day up 28% today on much stronger volume than usual.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.