GM Down 12%, Deutsche Bank Rises 4%

123jump.com Staff
02 Jul, 2008
New York City

U.S. stocks took a negative turn after the new worries resurfaced about General Motors. Merrill Lynch analyst estimated that the company may need more capital than previously estimated as it burns cash and sales decline and did not rule out the bankruptcy alternative. General Motors dropped 12% on the comments and dragged market indexes lower. In Europe, banks rallied after Deutsche Bank affirmed its guidance of profitability and UBS said that for now it has sufficient capital.

[R]3:00 PM New York – Persistent strength in the crude oil future prices and comments on General Motors dragged market averages.[/R]

Dow Jones Industrial Average dropped 64.96 to 11,316.65 and S&P 500 lost 8.53 to 1,275.74. Merrill Lynch comments suggested that General Motors may need larger than anticipated cash infusion. The company is losing cash at a faster rate than management estimated. The broker also suggested that bankruptcy alternative should not be ruled out. The comments drove stocks sharply lower and General Motors dropped $1.58 to $10.17.

Dow Gainers and Losers

Of the 30 stocks in Dow Jones Industrial Average 17 stocks gained and 13 declined.

General Motors led the decliners in the Dow Jones Industrial Average with a loss of 3.8% or 45 cents, to $11.30 followed by losses in Caterpillar Inc of 1.2% or $0.88, to $73.21, in 3M Co of 0.80% or $0.56, to $69.22, in Pfizer Inc of 0.50% or $0.09, to $17.64 and in Procter & Gamble of 0.27% or $0.17, to $61.81.

JPMorgan Chase led the gainers in the Dow Jones Industrial Average index with a rise of 1.53% or $0.54, to $34.54 followed by increases in Wal-Mart Stores of 1.07% or $0.61, to $57.64, in Intel Corp of 0.93% or $0.20, to $21.77, in American Express of 0.87% or $0.35 to $40.37 and in United Tech Corp of 0.68% or $0.41 to $61.09.

Stock Movers

Starbucks traded in a tight range after the company announced its plan to close 600 non-performing stores. Most of these stores were opened in less than three years. Starbucks Corporation ((SBUX)) in the last one year traded as high as $28.29 in July 2007 and as low as $15.66 in April 2008. Based on the yesterday’s closing price the company has a market cap of $11.43 billion.

Deutsche Bank rose $3.11 to $86.68 in New York trading after it affirmed that it will declare profit in the second quarter. That news and UBS affirming its guidance that it does not capital in the near future lifted banking stocks and market indexes in Europe.

DeVry Inc rose 10.3% or $5.41 to $57.66 on no news. Recently the company has been a subject of Federal probe to investigate its recruitment and compensation policies. DeVry ((DV)) in the last one year traded as high as $61.19 in June 2008 and as low as $32.40 in July 2007. Based on the yesterday’s closing price the company has a market cap of $4.14 billion.

UniFirst Corp rose $3.01 or 6.7% to $47.08 after it reported its third quarter profit above the market expectations. Unifirst Corporation ((UNF)) in the last one year traded as high as $49.56 in May 2008 and as low as $35.86 in May 2008. Based on the yesterday’s closing price the company has a market cap of $932.69 million.

ITT Educational Services rose 5.9% or $4.81 to $86.35 on 50% above daily average volume. ITT Educational Services ((ESI)) in the last one year traded as high as $130.47 in November 2007 and as low as $45.93 in March 2008. Based on the yesterday’s closing price the company has a market cap of $3.41 billion.

S&P Movers

Of the stocks in S&P 500 index, 271 increased 221 declined and 8 remained unchanged.

Massey Energy Co led the decliners in the S&P 500 index with a loss of 6.58% or $6.08, to $86.26 followed by in losses in General Motors of 6.04% or $0.71, to $11.04, in Consol Energy of 5.64% or $6.31, to $105.64, in Brown Forman of 4.77% or $3.47, to $69.33 and in Peabody Energy of 4.40% or $3.78, to $82.11.

Apollo Group led the gainers in the S&P 500 index with a rise of 22.55% or $10.43, to $56.69 followed by increases in Family Dollars ST of 12.27% or $2.49, to $22.78, in Sandisk Corp of 7.78% or $1.37, to $18.99, in Range Resources of 6.41% or $4.30 to $71.42 and in Yahoo Inc of 5.11% or $2.38 to $48.98.