Lincoln National, AIG, MGM Plunge

Mayank Mehta
20 Mar, 2009
New York City

MGM Mirage and Lincoln National drop on debt downgrades. AIG plunges on more investigations in bonus practices. Fluor Corp declines on project halt in Kuwait. AutoNation and Cabot Corp fall on ratings downgrade.

[R]2:15PM New York – MGM Mirage and Lincoln National drop on debt downgrades. AIG plunges on more investigations in bonus practices. Fluor Corp declines on project halt in Kuwait. AutoNation and Cabot Corp fall on ratings downgrade.[/R]

Of the stocks in S&P 500 index, 77 increased, 419 declined and 4 were unchanged.

American International Group, Inc led the decliners in the S&P 500 index with a loss of 23.4% followed by losses in AutoNation, Inc of 10.4%, in Xerox Corporation of 12.7%, in Kimco Realty Corporation of 4.8%, in Bank of America Corporation of 12.9%.

Office Depot, Inc led gainers in the S&P 500 index with a rise of 14.7% followed by gains in Ford Motor Company of 9.1%, in Dynegy Inc of 7.2% and Expedia, Inc of 6.4%.

Other Movers

American International Group, Inc ((AIG)) fell 28.4% or 46 cents to $1.16 after nine states started investigations in the company and look at bonus practices. U.S. House passed the tax ruling to recover bonus with 90% tax rate and states may follow similar tax laws.

Alloy, Inc ((ALOY)) declined 3.5% or 15 cents to $4.10 after the media and marketing services company said fourth quarter revenues rose 2% to $43.8 million from $43.1 million a year ago. Net income in the quarter was $4.3 million or 34 cents per diluted share compared to net loss of $73.7 million or $5.45 per share a year ago.

AutoNation, Inc ((AN)) dropped 12.4% or $1.71 to $11.99 after the largest publicly traded U.S. car retailer was cut to “sell” from “neutral” at UBS.

Blockbuster Inc ((BBI)) dropped 9.8% or 0.08 cents to $0.81 after the video rental chain said fourth quarter revenues fell 12% to $1.38 billion from $1.57 billion a year ago. Net loss in the quarter was $359.8 million or $1.89 per diluted share compared to net income of $41.0 million or 18 cents per share a year ago.

Cabot Corporation ((CBT)) lost 10.6% or $1.10 to $9.19 after the specialty chemical maker was cut to “neutral” from “overweight” at JPMorgan Chase & Co.

Expedia, Inc ((EXPE)) rose 6.5% or 50 cents to $8.15 after the world’s biggest online travel agency was upgraded by Citigroup to “buy” from “hold.” Recently online travel agencies have been engaged in price war and offering discount travel packages as the economy has softened. Expedia is likely to benefit from its no service fee for air travel and price guarantee on vacation packages.

Fluor Corporation ((FLR)) declined 3.2% or $1.49 to $37.32 after the largest publicly traded U.S. engineering firm was asked by Kuwait National Petroleum Co. to stop working on a huge refinery project.

Ford Motor Company ((F)) climbed 5.5% or 14 cents to $2.65 on the hopes that the U.S. aid to auto parts maker will help the industry to stabilize and give time to deal with the over capacity.

Johnson Controls, Inc ((JCI)) added 2.7% or 16 cents to $11.50 after the U.S. offered financial support to the industry and may extend loans as much as $5 billion. U.S. is also likely to offer additional $22 billion to auto makers. However, U.S. Congress may be reluctant to extend support without serious concessions from the management and unions.

Kirkland’s, Inc ((KIRK)) rose 15.6% or 54 cents to $4.00 after the specialty retailer of home decor reported fourth quarter sales fell 3.4% to $133.6 million from $138.3 million a year ago. Net income in the quarter rose 900% to $15.0 million or 76 cents per diluted share compared to net income of $1.5 million or 8 cents per share a year ago.

Lincoln National Corp. ((LNC)) dropped 10% or 82 cents to $7.22 after rating agency Moody’s downgraded its senior debt.

MGM Mirage ((MGM)) declined 11% or 34 cents to $2.88 after S&P downgraded deeper into junk territory.

Merck & Co., Inc ((MRK)) gained 3.3% or 87 cents to $26.91.

Palm, Inc ((PALM)) slid 4.7% or 38 cents to $7.71 after the wireless device maker said third quarter revenues fell 71% to $90.6 million from $312.1 million a year ago. Net loss in the quarter was $98 million or 89 cents per diluted share compared to net loss of $57 million or 53 cents per share a year ago.

Xerox Corp ((XRX)) plunged 17% or 92 cents to $4.42 after the maker of office equipment offered first quarter earnings between 3 cents and 5 cents compared to previous estimate between 16 cents and 20 cents per share. Revenues in the first two months declined 18% including 5 percentage point related to currency impact.