Friday, August 14, 2009

Daily Wrapup For August 14th

It was not a good day for American stocks. Despite a better than expected industrial production figure, the market took its cue from the flat CPI for July. By the time the consumer sentiment index numbers were released, the averages were flat to down. The unexpected decline in consumer sentiment was enough of a shake to get the averages tumbling down: by 10:15 AM ET, all three major averages had dropped to well below a 1% loss. (The Russell small-cap index fared worse.) After hitting a nadir at about 11:30 AM ET, all three averages slowly trundled up until a relief rally kicked in at about 3:30 PM ET. That rally wiped away about half of the averages' earlier-day declines. The Dow closed down 0.82%, the S&P posted a loss of 0.85%, and the NASDAQ sunk 1.19%. Light sweet crude got hammered by $3.01 per barrel to close at $67.51.

The lowest-quintile P/E cut-off joined the overall trend by falling today, from yesterday's 11.74 to 11.63. The S&P's dividend yield, which forms the yield cut-off, jumped three basis points to 2.65%. After ETFs and stocks with less than 500M market cap were sifted out, as well as ones with yields greater than 10%, the Low P/E Bin was left with one hundred and two stocks for a decline of four from yesterday. Here are the changes in the Low P/E Bin, as dash-listed below:

- Cooper Industries, Ltd.
- France Telecom SA

- Carpenter Technology Corporation
- Cousins Properties Inc.
- Edison International
- Permian Basin Royalty Trust
- Tsakos Energy Navigation Ltd.
- UIL Holdings Corporation

The two Arrivals are ones that have been in the Bin before, although one of them has been gone for some time. That one is Cooper Industries, a maker of electrical circuit protector products and tools. Its 2.61% drop today lowered its P/E below the Bin cut-off. The same cause got France Telecom back in.

The six Departures got out for drop-related reasons, with the notable exception of two. Those two are, significantly, both electric utilities: Edison International and UIL Holdings. Edison was up 1.99% today, and UIL was up 0.35%. Both gains pushed both companies' P/E ratios above the lowest quintile cut-off.

A 2Q loss pushed Carpenter's 12-month trailing EPS down to the point where its P/E is well above the cut-off: the stock of the specialty metals manufacturer dropped 1.59% today. Cousins Properties's market cap dropped below 500M today due to a 4.63% drop in the REIT's stock. The same fate got Permian Basin, an express trust with interests in several Texas oil and gas properties, out of the Bin too. Tsakos, a ship-transportation company specializing in crude oil tankers, saw its yield go above 10%.

There was another drop today, a surprising one given the company's fate in its home-country exchange. Yanzhou Coal announced a takeover of Australian company Felix Resources. The news sent the stock up on both the Shanghai and Hong Kong exchanges today, but the American market was far less impressed. Yanzhou's ADRs closed down 3.79% at $15.49 on the first day they've traded since last Friday.

That's all for today's Daily Wrapup. Thanks for reading, and may your weekend be free of the anxieties of the momentum trader.

1 comment: