U.S. markets struggled to stay above water today as investors were looking ahead to the official start of third-quarter earnings reports coming out this week, and digesting a handful of weak economic reports.
Although a few companies, such as PepsiCo, Inc. (NYSE:PEP) have already reported, the official season begins with Alcoa Inc (NYSE:AA) after Thursday’s closing bell.
In economic news, the International Monetary Fund (IMF) reduced its forecast for all global economies again in 2015, down from 3.3% to 3.1%, saying there are weaker prospects for growth among the emerging economies. The IMF also reduced its forecast in July.
In addition, the Commerce Department reported the August U.S. trade deficit surged 16% to $48.3 billion, which is the largest gap since May. The reason cited was the strong dollar, which reduced exports to their lowest level since 2012.
The Dow Jones Industrial Average finished flat on the day, while the S&P 500 was down 0.4% and the Nasdaq was off 0.7%. Most sectors, other than energy and basic materials, were lower today. Precious metals, commodity, chemical, and energy stocks did very well, including E I Du Pont De Nemours And Co (NYSE:DD) and Peabody Energy Corporation (NYSE:BTU). Those two, along with tech stock PMC-Sierra Inc (NASDAQ:PMCS) are three of today’s best stocks.
E I Du Pont De Nemours And Co (DD)
DD stock is blazing hot today after CEO Ellen Kullman announced late on Monday that she is retiring next week. Director Edward Breen will assume the interim Chairman and CEO positions.
Rather than causing investor angst, the sudden announcement gave beleaguered shareholders of Dupont stock reason to celebrate, as the stock has been in a long downtrend since mid March, 2015, when it traded above $80 per share. The stock closed 8% higher on strong volume.
Dupont recently reduced its profit forecast for the year and announced it will cut costs.
No reason was given for the quick retirement, so it is likely the CEO was being pressured to leave. It’s also worth noting that DD has been battling Trian Fund Management activist Nelson Peltz on a proxy fight.
Peabody Energy Corporation (BTU)
Coal producer stocks are up across the board today, along with other energy plays, and BTU stock led the pack, blistering up 35%.
Ironically, a few days ago, popular market maven Jim Cramer advised investors NOT to buy any coal, copper or iron stocks. Many of those stocks have now popped dramatically higher since that article was written.
BTU stock has been in a downtrend over the past year, but technically it appears to be putting in a double bottom. Today’s action sent it sliding over the 50-day moving average. However BTU stock is still far below its 200-day M.A.
PMC-Sierra Inc (PMCS)
PMCS stock scorched 33% higher after the chipmaker was acquired by Skyworks Solutions Inc (NASDAQ:SWKS), a rival firm, for $2 billion.
Announced terms of the deal are that SWKS will pay $10.50 per share in cash for PMCS, which represents a 37% premium over Monday’s closing price. The deal could boost SWKS’ EPS by 75 cents per share.
The deal is expected to close in the first half of 2016.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
