September was going from bad to worse on only its second day for the Standard &
Poors 500 Index, which was down more than 20 points to under 1,184, shedding
about 1.8% in early-morning action. Hopes for QE3 to stimulate the economy are
being replaced by the realization that a recession is nearing as job growth,
production and consumer confidence are all low. Warren Buffetts bet on Bank of
America has not protected the banking sector from heading lower, again, as it is
the worst-performing group in the market for 2011. Declining stocks outnumber
advancing stocks this morning by more than 5-to-1. More than 70% of stocks are
trading below their 50- and 200-day moving averages, bringing the exchanges into
"Death Cross" territory, when the long-term moving average breaks above the
short-term moving average, which is a very bearish indicator. Off by about 12%
was H&R Block (NYSE: HRB ) to around $13.40, losing more than $1.70 per share.
H&R Block reported less revenue (a drop to $267.7 million from $275.5 million)
and higher losses (57 cents per share), which disappointed Wall Street. H&R
Block was upgraded Aug. 18 by Standpoint Research to a "buy." For the week,
HRB is up more than 14%. Netflix (NASDAQ: NFLX ) was under $211, off about $22
and 10%. Netflix is losing its streaming deal with the cable channel Starz,
which was a huge blow to the stock. This means NFLX will lose streaming rights
to Disney and Sony movies. For 2011, Netflix still is up more than 32%. Brief
good news on the housing front has passed, and PulteGroup (NYSE: PHM ) is down
more than 5%, or 25 cents, to under $4.30 a share. The homebuilder is up more
than 8% this week on an upgrade by Ticonderoga and higher sales prices. But the
onslaught of bad news from the real estate sector is bringing the stocks lower,
again. For the year, PulteGroup is down more than 46%. JDS Uniphase (NASDAQ:
JDSU ) was up about 2% to over $13.20, picking up about 22 cents per share.
Royal Bank of Canada upgraded the high-tech company to a "buy" with a target
price of $18 over the next year. JDS Uniphase is up more than 20% for the week
but down about 30% for the quarter. Rising about $1 to about $63.40, a gain of
about 1.5% per share, was Newmont Mining Corp. (NYSE: NEM ). A Forbes article
this morning projected Newmont Mining heading to $76 per share over the next
year. With gold approaching its all-time high, stocks in the sector are surging.
If QE3 is actuated, gold could appreciate even more. Clorox (NYSE: CLX ) was up
over $69.20, picking up more than 20 cents per share, or about 0.25%. Reports
say investor Carl Ichan is betting on a high valuation for Clorox in his bid for
board membership. Clorox is up more than 5% for the past week and 11% for the
year. Clorox was downgraded on Aug. 11 by Caris & Company and on July 21 by RBC
Capital Markets. Jonathan Yates does not own any of the stocks mentioned in this
article.
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