Thursday, December 8, 2011

Banks Burned by Europe — Thursday’s IP Market Recap

Budding optimism this week for solutions to the European debt crisis ground to
a halt Thursday as the head of the European Central Bank gave a pessimistic
outlook for tomorrow's Brussels meeting, killing the market's three-day
climb and sending bank shareholders to the exits. While the ECB dropped interest
rates to an all-time low 1% and said it would open up three-year loans to euro
zone banks, negative comments about the low possibility of lending to the
International Monetary Fund which then would lend the money to euro zone
members in a form of quantitative easing soured the markets. The Dow Jones
tumbled nearly 200 points by day's end. European financials like Royal Bank of
Scotland (NYSE: RBS , -7.93%) and Deutsche Bank (NYSE: DB , -7.76%) were
torched, as was U.S.-based Morgan Stanley (NYSE: MS , -8.42%), which is thought
to have significant exposure to a European debt crisis. The fallout also
trickled down to national banking giants Citigroup (NYSE: C , -6.97%), JPMorgan
Chase (NYSE: JPM , -5.24%) and Bank of America (NYSE: BAC , -5.09%). Electric
vehicle maker Tesla Motors (NASDAQ: TSLA ) had more than enough problems without
the general market sentiment Thursday, with TSLA stock plunging almost 10% to
$30.89 after Morgan Stanley's Adam Jonas hacked his price target by 37% and
downgraded Tesla to underweight. Jonas expressed satisfaction with Tesla's
performance, with the pessimism instead focused toward the entire electric
vehicle industry. On the opposite side of the spectrum, Affymax (NASDAQ: AFFY )
whose stock suffered through a roller-coaster ride earlier this week hinging on
the fate of its experimental anemia medicine, peginesatide spiked Thursday on
news that advisers to the Food and Drug Administration would back its drug.
During the day, Affymax stock almost reached $8.50, its highest point since June
2010, when AFFY shares took a 70% hit after the company's trial anemia drug
then called Hematide was reported to have greater cardiovascular risks than an
existing Amgen (NASDAQ: AMGN ) product. Affymax stock finished Thursday at
$7.99, up 36%. Three Up DemandTec (NASDAQ: DMAN ): Up 55.99% ($4.72) to $13.15.
Coinstar (NASDAQ: CSTR ): Up 7.84% ($3.45) to $47.45. Sodastream International
(NASDAQ: SODA ): Up 2.36% (83 cents) to ($35.96). Three Down Melco Crown
Entertainment (NASDAQ: MPEL ): Down 6.7% (65 cents) to $9.05. Nokia (NYSE: NOK
): Down 6.19% (33 cents) to $5. Juniper Networks (NASDAQ: JNPR ): Down 5.91%
($1.26) to $20.05. As of this writing, Kyle Woodley did not hold a position in
any of the aforementioned stocks. Check out our list of previous IP Market
Recaps .

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