Mentor Surges, Techs, Financials Fall

Mayank Mehta
01 Dec, 2008
New York City

U.S. stocks plunged on the worries that economic recession will be longer and deeper than generally estimated. Energy stocks fell on 10% decline in crude oil prices and retail stocks fell after retailers offered more and larger discount than usual to kick-off holiday sales.

[R]9:50 PM New York – U.S. stocks plunged on the worries that economic recession will be longer and deeper than generally estimated. Energy stocks fell on 10% decline in crude oil prices and retail stocks fell after retailers offered more and larger discount than usual to kick-off holiday sales.[/R]

Of the stocks in S&P 500 index, 498 increased, 2 decreased and none were unchanged. Of the index stocks, 486 fell more than 3%, 1 closed above 3% and 214 plunged more than 10%.

Prologis led decliners in the S&P 500 index with a fall of 34% followed by losses in CB Richard Ellis of 29.4%, in Liz Claiborne of 26%, in Developers Diversified of 25.4%, in Janus Capital Group of 25.4%, in Sprint Nextel Company of 24.4%, in Wachovia Corp of 24% and in Merrill Lynch of 23.4%.

Banks, financials and insurance companies were among the leading decliners. KeyCorp fell 22%, Citigroup dropped 22%, in Prudential Financial declined 21% and in Bank of America of 21%.

The Hartford Financial Services Group, Inc ((HIG)) fell 21.8% or $1.84 to $6.61 after financial stocks declined. Prudential Financial ((PRU)) plunged 21% or $4.55 to $17.55 and MetLife dropped 13% or $3.83 to $24.93.

Inergy Holdings, L.P ((NRGP)) dropped 6.6% or $1.34 to $19.16 after the propane and other natural gas liquids energy company reported fourth quarter revenues rose 25% to $340.9 million from $273.5 million a year ago. Net income in the quarter rose 20.5% to $4.7 million or 23 cents per diluted share compared to net income of $3.9 million or 19 cents per share a year ago.

Intel Corporation ((INTC)) dropped 9.0% or $1.24 to $12.56 after the semiconductor chip makers and other technology companies fell sharply on the worries that capital spending from businesses will decline in the next fifteen months.

Infineon Technologies AG ((IFX)) lost 11% or 28 cents to $2.07 and Advanced Micro Devices ((AMD)) dropped 15.3% or 36 cents to $2.00. Micron Technology, Inc ((MU)) lost 18.3% or 50 cents to $2.24 and Texas Instruments Incorporated ((TXN)) plunged 10% or $1.52 to $14.01.

Liz Claiborne, Inc ((LIZ)) slid 26% or 75 cents to $2.11 after the retailer fell on the worries that higher discounts will drive the earnings sharply lower in this holiday season. A week ago Moody’s cut the company’s debt rating to junk level.

Mentor Corporation ((MNT)) rose 90.0% or $14.43 to $30.58 after the world’s largest health-care company Johnson & Johnson announced a definitive agreement to acquire Mentor for approximately $1.07 billion in a cash tender offer. Under the terms of the agreement, Johnson & Johnson will commence a tender offer to purchase all outstanding shares of Mentor at $31.00 per share.

Noble Corporation ((NE)) dropped 17% or $4.51 to $22.28 after the third-largest U.S. offshore oil driller was cut to “buy” to “neutral” at Merrill Lynch.

Nabors Industries Ltd ((NBR)) lost 16.2% or $2.34 to $12.16 after the land drilling contractor fell after crude oil futures fell nearly 10% at close today. Exxon Mobil ((XOM)) declined 7.3% or $5.84 to $74.31, Schlumberger Limited ((SLB)) declined 17% or $8.45 to $42.08 and Valero Energy dropped 11% or $2.12 to $16.23.

Rohm & Haas Company rose 3.5% or $2.41 to $70.82 after the acquirer of the company, Dow Chemical ((DOW)) and subsidiary of Kuwait Petroleum Corporation signed a joint venture agreement. Dow will receive pre-tax proceeds of $9 billion that will help fund the purchase of Rohm & Haas.

Sprint Nextel Corporation ((S)) plunged 24.4% or 68 cents to $2.11.

Wal-Mart Stores ((WMT)) declined 5.2% to $53.01, Costco Wholesale Corp ((COST)) declined 7% or $3.56 to $47.91, Macy’s ((M)) 13.6% or $1.01 to 46.41, JC Penney ((JCP)) declined 13% or $2.44 to $16.55, Sears Holdings ((SHLD)) fell 12.2% or $4.41.

XL Capital Ltd ((XL)) fell 22% or $1.09 to $3.94 after the business insurer was cut to “neutral” from “buy” at Merrill Lynch.