Closing Bell: Housing, FOMC Minutes, earning fears all culprits for a weaker day

Posted Apr 8th 2008 4:46PM by Jon Ogg
Filed under: Apple Inc (AAPL), Advanced Micro Dev (AMD), Washington Mutual (WM), Garmin Ltd (GRMN)

If you wanted to look for the blame-game on why stocks listed lower most of the day, you could blame pending home sales at lows, higher oil prices, and even the FOMC minutes hinting at recession without saying "recession." We also saw the White House say it couldn't endorse the current structure of the proposed housing bill.

The truth is, Wall Street and Main Street are also coming to grips with the fact that we are about to get earnings (and guidance) from companies that we can only hope is mixed. Otherwise we just have to hope for "less-bad" news. Get ready for the legacy airline sector's low P/E and low Price to Book values to disappear completely. Below are the unofficial closing bell index prices:

Dow 12,576.44 (-35.99; -0.29%)
S&P 500 1,365.54 (-7.00; -0.51%)
NASDAQ 2,348.76 (-16.07; -0.68%)
10YR-TBond 3.558% (+0.002%)
Full 52-week lows.
See Top 10 Pre-Market Analyst Calls.

Advanced Micro Devices (NYSE: AMD) saw shares fall almost 5% to $6.03 after it issued an earnings and revenue warning on Monday after the close. Had it not announced a major layoff plan, this would have been far worse. So much for this "growth story."

Apple Inc. (NASDAQ: AAPL) saw shares fall by almost 2% to $152.84 after America's favorite stock was downgraded to "Underperform" from "Market Perform" at Morgan Keegan.

Garmin Ltd. (NASDAQ: GRMN) saw it shares hit another 8% to $48.47, under its prior 52-week lows on what should have already been seen. TomTom's earnings warning and a subsequent untimely downgrade out of Soleil are the culprits.

The First Marblehead Corporation (NYSE: FMD) saw a bloodbath today after its loan guarantee company called The Education Resources Institute filed for Chapter 11 bankruptcy protection. Just when you thought student loan companies were looking safer. One thing we'd note on this though, student loans cannot be wiped off your slate in a bankruptcy filing, so they never go away. Shares fell by 36% to $4.88.

NutriSystem Inc. (NASDAQ: NTRI) saw its shares rise a sharp 24% to $18.59 after the company upped its revenues, named a new CEO, and after a boutique called Boenning & Scattergood upgraded the stock. part of the reason for the pop, and perhaps the largest reason for the extreme gain, was the short interest of more than 20 million shares after the stock had sold off almost 80% from highs.

Washington Mutual, Inc. (NYSE: WM) did get a $7 billion financing pact from private equity firm Texas Pacific, or TPG, and others. This financing is more like takeunder financing with shares essentially being bought at $8.75. WaMu shares fell by 10% to $11.81 after a strong performance yesterday. This might actually be a win when you consider the discount that the current new share buyers are getting.

Tags: AAPL, AMD, FMD, FOMC, FOMC Minutes, GRMN, NTRI, WM