Oil Drops 4%; Valero, Conoco, Exxon Fall

Mayank Mehta
22 Jun, 2009
New York City

U.S. benchmark indexes dropped between 2% and 3% after the World Bank report revised its estimate of the world economic contraction to 2.7% from 1.9%. The crude oil and copper prices trade lower. Walgreen third quarter profit declines 8.7% on sales rise of 8%. Visa Inc surges.

[R]12:00PM New York – U.S. benchmark indexes dropped between 2% and 3% after the World Bank report revised its estimate of the world economic contraction to 2.7% from 1.9%. The crude oil and copper prices trade lower. Walgreen third quarter profit declines 8.7% on sales rise of 8%.[/R]

Of the stocks in S&P 500 index, 42 increased, 452 declined and 6 were unchanged.

Denbury Resources Inc led the decliners in the S&P 500 index with a loss of 8.0% followed by losses in Massey Energy Company of 7.3%, in Allegheny Technologies Incorporated of 6.9%, in The Manitowoc Company, Inc of 6.7% and in AK Steel Holding Corporation of 6.4%.

LSI Corporation led gainers in the S&P 500 index with a rise of 3.9% followed by gains in of Integrys Energy Group, Inc 2.0%, in Vulcan Materials Company of 1.6% and E*Trade Financial Corporation of 1.5%.

Energy explorers and coal miners fell. Massey Energy ((MEE)) dropped 11.4% to $17.60 and Peabody Energy Corporation ((BTU)) fell 7.9% to $28.91. Exxon Mobil ((XOM)) decreased 2.4% to $69.32, ConocoPhillips ((COP)) declined 5% $40.67 and Chevron ((CVX)) fell 3.2% to $65.92. Valero ((VLO)) dropped 4.8% to $16.36 and Tesoro ((TSO)) dropped 9.2% to $12.74.

Other Movers

Abercrombie & Fitch Co ((ANF)) fell 2.1% or 17 cents to $25.84 after the U.S. teen-clothing retailer said it amended its credit agreement lowering its outstanding credit line to $350 million from $450 million.

Altera Corporation ((ALTR)) rose 0.7% or 12 cents to $16.42 after the second-biggest maker of programmable semiconductors was upgraded to “outperform” from “sector perform” at RBC Capital Markets.

Bank of America Corporation ((BAC)) dropped 3.4% or 45 cents to $12.77 after the largest U.S. bank said the board of directors authorized a regular quarterly dividend of $18.1250 per share on the 7.25% non-cumulative perpetual convertible preferred stock, Series L. The dividend is payable on July 30, 2009 to shareholders of record as of July 1, 2009.

In addition, Tommy R. Franks and Joseph W. Prueher resigned as directors from the board. Tommy Franks was appointed to the board in January 2006

CarMax, Inc ((KMX)) declined 5.7% or 89 cents to $14.43 after the biggest U.S. used-car dealer was downgraded from “buy” to “hold” at Deutsche Securities.

CF Industries Holdings, Inc ((CF)) fell 3.8% or $2.86 to $72.13 after the fertilizer maker said that it has extended the expiration date of its exchange offer for all of the outstanding shares of Terra Industries Inc. common stock to Friday, July 10, 2009.

Denbury Resources Inc ((DNR)) the owner of oil and natural gas properties in the Gulf Coast region of the United States declined 8.0% or $1.10 to $13.66.

The Goodyear Tire & Rubber ((GT)) fell 4.5% or 55 cents to $11.68 after the largest tire maker announced to operate its Tennessee plant that makes consumer tires to operate three shits only five days a week from seven days a week from July 6.

In early May, United Steelworkers members at the plant ratified a local labor agreement that permits the schedule change. Approximately 550 associates will receive buyout packages as part of the change. The company expects to record after-tax restructuring charges associated with this action of approximately $60 million in the second quarter of 2009, related to cash severance payments that will be paid in the third quarter.

LSI Corporation ((LSI)) added 4.0% or 26 cents to $4.78 on 9.2 million share volume.

Medarex, Inc ((MEDX)) jumped 14.6% or $1.08 to $8.44 after the Two Mayo Clinic patients whose prostate cancer had been considered inoperable have no evidence of disease. The patients that can be operated after the treatment were selected from a pool of 108 people in Phase II study.

NII Holdings, Inc ((NIHD)) the provider of walkie-talkie and wireless phone service in Latin America slid 5.3% or $1.03 to $18.96.

Novell, Inc ((NOVL)) lost 4.9% or 23 cents to $4.45 after the Linux software developer denied its plan to sell part of the company or businesses. On Friday, JP Morgan analyst had said that the company is exploring to sell part of the businesses in a research note.

Visa Inc ((V)) increased 2.3% to $62.78 after its affiliate in Brazil plans a stock offering this week that may raise at least $3 billion.

Walgreen Company ((WAG)) fell 3.2% or $1.01 to $30.42 after the drugstore chain reported third quarter sales rose 8% to $16.2 billion from $15.0 billion a year ago. Net income in the quarter fell 8.7% to $522 million or 53 cents per diluted share compared to net income of $572 million or 58 cents per share a year ago.