Monster Beverage Corp. (MNST) tumbled 7.3 percent after profit and sales trailed estimates. A measure of homebuilders in S&P indexes gained 2.4 percent as JPMorgan Chase & Co. (JPM) sees higher demand in the industry and data showed prices for single-family homes climbed in most U.S. cities in the second quarter. E*Trade Financial Corp. (ETFC) rallied 6.1 percent as Chief Executive Officer Steven J. Freiberg was ousted from the brokerage.
The S&P 500 (SPX) dropped 0.2 percent to 1,399.92 at 12:09 p.m. New York time, after rallying 2.7 percent in four days. The Dow Jones Industrial Average lost 34.55 points, or 0.3 percent, to 13,141.09 today. Trading in S&P 500 companies was down 5.3 percent from the 30-day average at this time of day.
We acknowledge the positive news,” Wayne Lin, a money manager at Baltimore-based Legg Mason Inc., said in a telephone interview. His firm oversees $631.8 billion. “We’ve had some positive surprises on the jobs front and it seems that housing has found some footing. Yet people are aware of the risks. The risk in Europe is still out there.”
Labor Department data showed that fewer firings mean employers are seeing enough demand to retain staff, indicating the economy is sustaining the recovery from the recession. Concern about Europe’s economy limited gains in stocks. The euro fell a third day against the dollar as economists surveyed by the European Central Bank predicted the region’s contraction this year will be worse than previously forecast.
Beating Estimates
A four-day rally has taken the S&P 500 up almost 10 percent from a five-month low on June 1. About 72 percent of S&P 500 companies which reported second-quarter results so far have beaten analysts’ earnings estimates, according to data compiled by Bloomberg.
“It’s kind of blah,” said Malcolm Polley, who oversees about $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania. “Growth is slowing in other parts of the world. It will take time. In addition, we’ve had a strong move up in stocks. It may be people just getting tired.”
Monster Beverage Corp. tumbled 7.3 percent to $62.84. Monster and Atlanta-based Coca-Cola Co. are facing higher costs for ingredients such as sweeteners and plastic for bottles.
Estimate Cut
Kohl’s Corp. (KSS) slid 1.3 percent to $51.39. The third-largest U.S. department-store company reduced its fiscal 2012 profit forecast after sales fell in the second quarter.
NetApp Inc. (NTAP) dropped 2.8 percent to $32.05. The seller of hardware and software for storing data was downgraded to hold from buy at Cantor Fitzgerald LP by equity analyst Paul Mansky. The 12-month target price is $38 per share.
Ten out of 11 stocks in a measure of homebuilders in S&P indexes gained. Data from the National Association of Realtors showed that values nationally jumped the most since 2006 as real estate markets stabilized.
PulteGroup Inc. (PHM), the largest U.S. homebuilder by revenue, jumped 4.6 percent to $12.64 after being raised to overweight at JPMorgan. KB Home (KBH) added 6.4 percent to $10.75, while Beazer Homes USA Inc. (BZH) rallied 5.1 percent to $2.81 after the two companies were also raised at JPMorgan.
E*Trade added 6.1 percent to $8.51. Chairman Frank J. Petrilli will serve as interim CEO while the company seeks a new leader, E*Trade said today in a statement. A board committee which includes the head of its biggest shareholder, Citadel LLC’s CEO Ken Griffin, will lead the search for a new chief executive, the company said.
‘Conviction Buy’
Cisco Systems Inc. (CSCO) rose 2.4 percent to $17.57 after the biggest maker of computer-networking equipment was added to the “Conviction Buy” list at Goldman Sachs Group Inc. Piper Jaffray Cos. also raised its recommendation for the technology company today.
James River Coal Co. (JRCC) soared 9 percent to $2.43. The producer of the fuel in Appalachia and the Midwest reported a smaller loss than analysts predicted as costs fell.
Lincoln National Corp. (LNC) climbed 3.2 percent to $23.42. The insurer that hired Ellen Cooper from Goldman Sachs Group Inc. as chief investment officer said it increased the size of its share buyback authorization to $1 billion.
Elizabeth Arden Inc. (RDEN) soared 13 percent to $43.93. The maker of the Britney Spears and Elizabeth Taylor brand fragrances forecast annual profit and revenue that topped analysts’ estimates.
Ammunition Maker
Alliant Techsystems Inc. (ATK) advanced 8.2 percent to $52.43. The U.S. military’s largest ammunition maker rose as higher defense sales helped first-quarter earnings top estimates. It raised its full-year forecast.
Robbins & Myers Inc. (RBN) surged 27 percent to $59.60. National Oilwell Varco Inc. (NOV), the largest U.S. maker of oil equipment, agreed to buy the company for about $2.5 billion in cash.
Asian dealmaking in North America confirms energy and gold stocks are a bargain when compared with the underlying commodities, according to Frank Holmes, U.S. Global Investors Inc.’s chief executive officer. The shares have trailed commodity prices for more than a year.
“The disparities mean that the cheapest resources are not found in the ground -- they’re listed” on stock exchanges, Holmes wrote three days ago in a blog posting.
Proposed multibillion-dollar takeovers of Canadian energy producers by Cnooc Ltd. and Petroliam Nasional Bhd show the value available in commodity stocks, according to Holmes.
Higher Bid
Cnooc, China’s largest offshore-oil explorer, offered to acquire Nexen Inc. (NXY) in July for 61 percent more than the stock’s market price. The proposed deal followed an offer in June from Petronas, Malaysia’s state-owned energy company, for Progress Energy Resources Corp. that was 77 percent above the market price. The bid was raised last month.
Holmes’s firm, based in San Antonio, runs three commodity- related mutual funds with total assets of about $1 billion. The biggest is the Global Resources Fund, which returned 12 percent during the two-year period depicted in the chart, according to data compiled by Bloomberg.
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