Dow 12,496 (-.05%) S&P 1,319 (+.17%)
We’re not calling this ‘the perfect storm’ (there technically aren’t any meteorologists on the MarketSnacks team). But it was clear today that investors were (to borrow a phrase from every British movie ever involving a boat in a storm) ‘battening down the hatches’ after waves of negative market news. New Home Sales for April in the US did jump 3.3%, but disappointing corporate earnings from Dell hit tech stocks, new developments in Facebook’s botched IPO smacked bank stocks and, most of all, news from the political summit in Europe slammed Blue Chip stocks all morning. The Dow had lost nearly 200 points by lunch, though after the European markets closed, stocks managed to claw back and finish down just 7 points.
The highly publicized European summit unsurprisingly produced no new strategy to fix the debt crisis. In a post-meeting statement released by a poor messenger boy, the leaders said they were excited to see the new Greek government that will continue implementing austerity reforms. Meanwhile the Greek Prime Minister said that exiting the Euro was a real possibility, which would sadly be a catastrophe for Greeks and much of the Eurozone. At least the Greeks are facing reality because it seems the European leaders have their heads in the sand, causing Americans investors to wake up to a bloodbath in European markets, down about 2-3% today. The value of the euro dropped to an unholy level not seen since July of 2010, $1.26. Part two of this European summit happens this evening with a “European Dinner.” A tip for the Greek Prime Minister – order the lobster and down as many Grey Goose martinis as you can – this is your last free meal at that table.
Dell quarterly corporate earnings disappoint, pull tech stocks down
Dell (DELL) 1st quarter earnings fell bellow expectations and provided a weak outlook on 2nd quarter revenues. Shares got hammered, dropping 17% at the open, and stayed there all day (could this mean a revival of the circa ’98 “Dude Your Getting a Dell” guy spots?). The negative news was like a tsunami hitting islands of tech stocks, as Intel (INTC) and Microsoft (MSFT) lost over 2% and Juniper (JNPR) over 4%. Dell is considered a barometer for tech firms because it’s such a long-time, large-scale cornerstone of the industry, so its earnings have an impact.
Facebook and Morgan Stanley sued over IPO valuation issues
Facebook (FB) has been getting a paparazzi-level of attention over the last few days – after sliding 19% since Friday’s bungled initial public offering (IPO), shares finally finished positive today. The newest development (we considered going with “status update,” but we’ll spare you) was a lawsuit. As we reported yesterday, Morgan Stanley (MS), the investment bank that valued FB at a tech IPO record $105 billion, actually cut their estimates of its revenues just before its market debut. So investors in Massachusetts and New York subpoenaed the social network today, along with Morgan Stanley and the other investment banks that prepared (or underwrote) the IPO, for misrepresenting what it was actually worth.
- After finishing the day down, Hewlett-Packard (HPQ) announced earnings after the close that beat expectations following a restructuring package that includes laying-off 27,000 workers over the next few years – the stock is up in after-hours trading, but can momentum be sustained….
- Facebook (FB) may have finished up today – but what will happen after today’s post-close report that the company is considering switching its stock to the New York Stock Exchange (NYSE) after Friday’s technical issues on the Nasdaq exchange….
- “Weekly Jobless Claims,” the amount of Americans filing for unemployment, in the AM….
© 2012 MarketSnacks