Farmers Mac Surges; Peabody, Massey Plunge 10%

123jump.com Staff
01 Oct, 2008
New York City

Farmers Mac surges 60% after it raised $65 million to meet its regulatory capital requirements and replaced its chief executive. Peabody Energy and Massey Energy plunge more than 10% as oil price decline and economic worries rise. Hartford Financial plunges more than 10% for the second day.

[R]11:20AM New York – Insurance companies drop sharply on earnings worries. Coal miners, Peabody Energy and Massey Energy plunge.[/R]

Federal Agriculture Mortgage Corporation ((AGM)) surged 59% or $2.41 to $6.51 after it said it has raised $65 million to meet regulatory capital requirements. Farmers Mac issued non-convertible preferred stock with board observation rights at an annual interest rate of 10% for the first year and increasing up to 16% after three years in stages.

The punishing interest cost comes after the company suffered losses in bonds of Lehman Brothers and mortgage agencies Fannie Mae and Freddie Mac and depleted its capital. The company also replaced its chief executive and appointed Michael A Gerber as acting CEO and President.

General Electric ((GE)) dropped $2.08 or 9% to $23.39 after Deutsche Bank analyst lowered his rating on the company on the concerns that financial services division earnings may be lower than expected.

Greenlight Capital Re, Ltd ((GLRE)) plunged 28% or $6.60 to $16.39 after it reported preliminary third quarter loss between $3.30 and $3.45 a share and book value for the period ending on Sept 30 in the rage of $14.05 and $14.20. For the quarter investment returns were negative 15.9%. The Cayman Islands based specialty and property insurance company year to date investment return is 12.9%.

Exxon Mobil ((XOM)) rose in the morning but quickly fell with the market sell-off $1.70 to $75.91. Barclays Capital raised its rating on the largest oil explorer.

Insurance stocks continue to slide on the weakness in the market. Hartford Financial Services ((HIG)) dropped 10% or $4.75 to $36.22. MetLife ((MET)) declined 15% or $8.09 to $47.94 and Prudential Financial ((PRU)) dropped 8% or $5.45 to $66.56. Manulife Financial Corporation ((MFC)) dropped 66 cents to $36.06.

Daimler AG ((DAI)) dropped $4.41 or 9% to $46.12 after it lowered its annual earnings outlook on higher steel prices, weak sales in the last three months and falling dollar. Toyota Motor ((TM)) and Honda Motor ((HMC)) declined as well. General Motors ((GM)) and Ford Motor Company ((F)) edged lower as they battle falling sales of SUVs and rising energy prices.

Mining companies fell as prices copper, gold and aluminum decline in the morning trading. Freeport McMoran ((FCX)) dropped $4.02 to $52.91, United States Steel dropped $5.20 to $72.34 and Nucor Company ((NUE)) dropped %1.99 to $37.55.

Peabody Energy ((BTU)) plunge 13% or $6.24 to $38.78 and Massey Energy ((MEE)) dive 11% or $3.86 to $31.82 after economic worries resurfaced. Peabody traded as high as $88.05 on June 30 and since then have fallen nearly 55%. Massey Energy on Sept 3 said that in the third quarter it expects to sell between 10.3 and 10.7 million tons of coal and at an average price between $64 and $66 a ton and the company reiterated its earlier annual earnings outlook.

A weakness in tech stock dragged the active tech stocks lower. Research in Motion ((RIMM)) dropped $3.84 to $64.43 and Apple Inc fell $5.558 to $108.19 and Google Inc ((GOOG)) fell from its earlier high of $415 to $405.45 after Nasdaq cancelled all the trades in the last three minutes to close in yesterday’s trading. Bidu.com Inc ((BIDU)) dropped 4% or $8.72 to 4239.51. Advanced Micro fell 12% or 60 cents to $4.65.