Although
consumer confidence reached a six-year high on the last day of our trading
session ended July 31, 2007, that news meant little to investors as Wall Street
sent the stock market sharply south on worries that the meltdown in the
subprime lending sector will lead to tight credit across all markets. Although
stocks attempted to rally, those efforts were wiped out after mortgage lender
American Home said it may become insolvent. “That’s the big news that’s hitting
the markets today,” said Sam Rahman, Portfolio Manager at Baring Asset
Management Inc. “It is raising concerns about the whole mortgage market because
American Home really didn’t do anything in subprime. The fact that they’re
having problems trying to unload some of their debt means that the subprime
issue is larger than feared,” Rahman said.
Those fears edged into the PCI Manufacturers’ Index,
cutting into it by 11 points, or 0.79 percent, to end at 1388.88. Despite the
loss, advancing issues edged past declining issues by a 5-to-4 count. Imperial
Chemical Industries-ICI-ceased trading on the NYSE, moved to the Pink Sheets
and was removed from the index.
BASF also announced that it will delist from the New York Exchange by
September. “Our decision to delist from the New York Stock Exchange underlines
BASF’s continuous efforts to reduce complexity and costs,” said BASF CEO
Juergen Hambrecht. BASF also said a potential buyer has approached the company
about its polystyrene division. The interested party’s name was not released
nor were financial terms disclosed. BASF increased 5.75 points, or 4.65
percent, and was the top dollar gainer this session. BASF closed at
129.45.
Despite a drop in second quarter net income, shares in Rohm & Haas rose
3.51 points, or 6.62 percent. The company reported net income of $160 million,
or $0.74 per share, versus net income of $166 million, or $0.75 per share
earned in last year’s second quarter. Analysts polled by Reuters Estimates had
been expecting earnings of $0.76 per share. Rohm & Haas cited the weak U.S.
housing market. Earlier in the session, however, the company gained after it
announced a $2 billion stock buyback to begin in the third quarter. On the
strength of that decision, Citigroup upped its rating in Rohm & Haas to
“buy” from “neutral.” ROH closed at 56.52, and was the top percentage
gainer.
DuPont shed 5.59 points, or 10.68 percent this session after the company
reported earnings that fell short of analysts’ expectations. DuPont announced
second quarter net income of $972 million, down from $975 million earned in the
year-ago quarter. Earnings per share remained flat at $1.04 per share. Sales
were up slightly, to $7.88 billion, from $7.44 billion last year. DuPont closed
at 46.73, and was the top dollar and percentage loser.
Despite
rising oil prices, subprime mortgage woes and the ongoing weakness of the
housing market, the Dow Industrials kept meeting and surpassing old markers as
our session rolled to a close June 29, 2007.
A
slew of mergers and acquisitions fueled an upsurge in the market this trading
session ended May 31, 2007. The upswing carried the Dow industrials to new
heights.
The Dow Industrials kept climbing into new territory
during our session ended April 30, 2007, boosted by earnings news and only
slightly cowed by an April drop in consumer confidence brought on by high oil
prices.
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