As has been the case so often of late, investors weren’t able to decide of the glass was half full or half empty today after a better-than expected ADP payroll-growth report. Stocks started out in the black, swung relatively deep into the red and then reclaimed most of what was lost. The S&P 500‘s close of 2097.90 was only 0.09% lower than Wednesday’s close.
Thursday wasn’t a mere slight setback for all stocks though. Humana Inc (NYSE:HUM), First Solar, Inc. (NASDAQ:FSLR) and BHP Billiton Limited (ADR) (NYSE:BHP) each ended the day deep in the red, albeit for understandable reasons.
Here’s the deal.
Humana Inc (HUM)
The proposed union of Humana and peer Aetna Inc (NYSE:AET) was already on thin ice at the beginning of the trading week, so much so that Aetna was entertaining the idea of preemptively selling some assets before the Department of Justice had a chance to nix the deal. It wasn’t enough or fast enough, though, as the Department of Justice still reportedly has “significant concerns” about the merger.
Representatives from both companies are scheduled to meet with representatives of the DOJ on Friday, primarily to discuss healthcare plans for seniors. The market isn’t optimistic about the likely outcome of that meeting though, judging from the near-10% tumble HUM shares took on Thursday.
Aetna shares were no shining star either, losing 4% of their value now that the pairing is in serious jeopardy.
BHP Billiton Limited (ADR) (BHP)
Brazilian stock index Ibovespa may have continued to make gains today, this time led by Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) after Morgan Stanley deemed the oil giant a buy.
Not every Brazilian name participated in the rally, however. Vale SA (ADR) (NYSE:VALE), along with partial partner BHP, ended the day down 1.8% and 2.7%, respectively, on a combination of another setback for commodity prices and lingering concerns that the two companies could still end up with tens of billions of dollars worth of liabilities stemming from a November accident at one of its mines. A dam broke, flooding a nearby town with toxic material.
The original penalty ruling had been suspended, offering a much-needed glimmer of hope. Now it’s back on the table though, after a couple of jurisdiction issues were addressed.
First Solar, Inc. (FSLR)
Last but not least, just when it started to look like First Solar might find its way out of a funk, FSLR was tripped up again today, falling nearly 10%.
Deutsche Bank did the deed, downgrading FSLR from a “buy” to a “hold,” and simultaneously lowering its price target in the stock from $80 to $44. The firm’s analyst justified the downgrade based on the following:
“1) slower than expected ramp in bookings; 2) likely pause in demand ahead of the series 5 ramp and 3) potential increase in pricing pressure, driven by aggressive bidding environment from the developers in international segments.”
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
