NEW YORK (Dow Jones)--Stocks fell Tuesday as commodities dipped, with oil giant Exxon Mobil declining, Discover Financial Services slipping after launching a stock offering, and American International Group tumbling.
The Dow Jones Industrial Average fell 161.27 points, or 1.94%, to 8,163.60. The Standard & Poor's 500-stock index lost 17.69, or 1.97%, to 881.03. The Nasdaq Composite Index lost 41.23, or 2.31%, to 1,746.17.
"You've had a pullback in commodity prices, and some people are worried about commodity producers and oil companies in particular," said James Paulsen, chief investment strategist at Wells Capital Management. Investors are also being cautious ahead of Alcoa's quarterly report Wednesday, which marks the official beginning of earnings season, he said.
Discover Financial Services fell 1.13, or 11%, to 9.37. The credit card issuer has launched a $500 million stock offering and is planning to offer senior notes in the near future. Some of the stock-offering proceeds may go toward buying back preferred stock issued under the U.S. Treasury's Capital Purchase Program.
American International Group fell 2.44, or 15%, to 13.75. The shares have been volatile after a recent reverse stock split. A jury on Tuesday rejected claims that a sister company to American International Group, at the direction of Maurice R. "Hank" Greenberg, AIG's former chief executive, improperly seized control of millions of shares of the insurer's stock.
Energy stocks fell with Exxon Mobil falling 1.54, or 2.3%, to 66.56; and Chevron lost 1.44, or 2.2%, to 62.70 as crude prices slid.
UnitedHealth Group rose 1.08, or 4.5%, to 25.17, Cigna gained 1.77, or 7.5%, to 25.24, and Aetna climbed 1.53, or 6.3%, to 25.94. Managed-care stocks gained following indications that the White House is open to a public health-insurance plan that would be introduced only if the marketplace fails to provide sufficient competition on its own. The sector has been volatile in the past few months due to uncertainties over how health-care reforms would affect the industry.
Intel (Nasdaq) lost 29 cents, or 1.8%, to 16.25. The stock rose early in the day on an analyst upgrade but then followed the broad market lower. Bank of America Merrill Lynch upgraded its rating on the chip maker to buy from neutral and said that the semiconductor sector's rebound is gaining steam.
Boeing lost 1.52, or 3.7%, to 39.04. The aircraft maker agreed to acquire the Vought Aircraft Industries facility that makes sections of its troubled 787 Dreamliner in an effort to gain more control over the project that has been beset by delays.
American depositary shares of Suntech Power Holdings fell 1.42, or 8.3%, to 15.69. The solar energy company said its Chief Operating Officer Johnson Chiang resigned last week, citing personal reasons.
Weyerhaeuser lost 2.13, or 7.1%, to 27.86. The forest products company slashed its dividend 80% and said it might become a real-estate investment trust.
Southwest lost 12 cents, or 1.8%, to 6.48. The airline estimated that its closely watched revenue per available seat mile fell 9% to 10% in June.
Tellabs (Nasdaq) fell 34 cents, or 6.2%, to 5.18. The telecommunications supplier disclosed plans to lay off about 150 employees. The company expects to record charges of $5 million to $6 million in the next several quarters from the job cuts.
KeyCorp rose 21 cents, or 4.1%, to 5.29. Keefe, Bruyette & Woods raised its rating on the stock to outperform from market perform, saying it is relatively inexpensive and that it has one of the strongest tangible common equity ratios among large-cap banks.
Steel Dynamics (Nasdaq) gained 30 cents, or 2.3%, to 13.57. Bank of America Merrill Lynch upgraded the stock to buy from neutral, saying it has a competitive cost position and attractive long-term growth prospects.
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