The snap-back rally did not last for the Dow Jones Industrial Average. Reading the fine print behind the Fed’s announcement that interest rates would remain low for “an extended period,” the Dow fell more than 200 points at the opening and continued to lose more than 407 points to go under 10,833, a drop of more than 3.6% in the morning session.
Goldman Sachs issued a note that Quantitative Easing III should be expected, which means Quantitative Easing II was a failure. As a result, both gold and oil were heading upward in anticipation of the U.S. economy and dollar weakening even more. The Dow Jones Industrial Average is now down about 8% for the week and more than 5% for the year.
Plunging about 12% was Walt Disney (NYSE:DIS), as its third-quarter studio revenue of $1.62 billion was below the analyst consensus estimate of $1.83 billion, shaving about $4.50 from each share to take the stock under $30.25. Walt Disney is trading more than 20% beneath its 20-, 50- and 200-day moving averages. A positive analyst recommendation came out this morning for Disney, setting a target price of $48 for the year.
Continuing its role as the worst-performing stock on the Dow for 2011, Bank of America (NYSE:BAC) was down about 7% to under $6.95, dropping about 50 cents a share. Bank of America is on a public relations offensive to restore the share price, down more than 50% over the past 52 weeks, and it’s not working, as analysts do not like what they are hearing. For the year, the financial sector has been the worst-performing segment on the Dow.
Descending by about $2 per share in early morning action, Boeing (NYSE:BA) was more than 3% lower to under $60.30 despite an announcement of an order of 12 Boeing 777s by Cathay Pacific this morning. Down more than 15% for the month, Boeing is trading double digits beneath its 20-, 50- and 200-day moving averages.
American Express (NYSE:AXP) was off more than 5.3% a share, shedding about $2.50, to trade beneath $43.50 in early morning action due to credit card concerns with the economy slowing. American Express is down more than 11% for the month. It is trading double digits beneath its 20 and 50 day moving averages.
Cisco Systems (NYSE:CSCO) was up early but slid back to around $14 with little movement; analysts expect a good earnings report this afternoon. A target price of $20 was set for the year for Cisco by Gleacher & Co. this morning. Cisco is down more than 20% for the quarter and more than 9% for the week.
Pfizer (NYSE:PFE) was another stock up early on two upgrades by Argus and Standpoint Research but gave back the gains to trade down about a nickel per share to around $17.55.
Jonathan Yates does not own any of the stocks mentioned in the article.
