March 1st, 2009 by InvestorPoint
U.S. stock indexes slumped Friday with the Dow Jones industrial average setting a record for declines for declines in February in points lost.
The Dow shed 937.93 points in the month and fell 11.7 percent, the largest February percentage drop since 1933. The S&P 500 fell 11% and the Nasdaq lost 6.7%.
By close, the DJIA was 119.15 points lower on the day, holding just above 7,000 at 7,062.93 points, down 1.66 percent.
The U.S. Commerce Department said Friday the gross domestic product fell 6.2 percent in the fourth quarter, pushing investors into a selling stance.
The S&P 500 hit a 12 year low closing at its lowest closes since December 1996. For the day, the index fell 17.74 points, 2.36 percent, to 735.09. The Nasdaq composite index lost 13.63 points, 0.98 percent, to 1,377.84.
Decliners outweighed advancers on the New York Stock Exchange as 1,010 stocks advanced while 2,057 declined on a volume of 8.3 billion shares traded.
The benchmark 10-year U.S. Treasury bond fell 6/32 to yield 3.022 percent.
The euro fell to $1.2664, compared to Thursday’s $1.2739. Against the Japanese yen, the dollar fell to 97.56 yen, compared to Thursday’s 98.35 yen.
In Tokyo, the Nikkei average gained 110.49 points to 7,568.42, up 1.48 percent.
In London, the FTSE 100 index lost 85.55 points, 2.18 percent, to 3,830.09.
Shanda Interactive Entertainment (SNDA) shares were up almost 3% as the company reported a 17% increase in net income on revenue growth of 42%. For the quarter the company reported income of $50.1 million or 72 cents per share up from $40.1 million or 54 cents per share for the same period one year ago.
Shanda Interactive is an interactive entertainment media company and an operator of online games in China. It offers a portfolio of diversified entertainment content including some of the most popular massively multi-player online role playing games.
Dell (DELL) shares closed up almost 4% after the company reported earnings of $351 million or 18 cents per share down from $679 million or 31 cents per share a year ago. Revenues dropped to $13.4 billion for $16 billion. Dell reported pre tax charges restructuring charges of $277 million or 11 cents per share. Excluding those charges, Dell would have earned 29 cents per share for the quarter which was above the 26 cents per share that analysts were expecting. Analysts were also expecting $14.1 billion in sales.
Dell designs, develops, manufactures, markets, sells, and supports computer systems and services that are customized to customer requirements.
Citigroup (C) shares closed down over 39% after the band reached an agreement with the US government to convert its preferred stake into common stock and install three new directors. They also announced suspension of dividends to common and preferred shareholders.
The conversion, the government’s third attempt to shore up the bank, results in the US Government owning 36% of the company. While the move will not inject any new capital into the bank it will save them from not having to pay the dividend on the $25 billion.
Citibank also stated that private investors will also participate in the conversion of preferred shares and that the conversions will cut the current shareholder’s stake in the bank to only 26%.
Citibank is a global financial services holding company, which provides a range of financial services to consumer and corporate customers.
General Electric (GE) shares were down over 6% yesterday after the conglomerate announced that they were slashing their dividend to 10 cents per share from 31 cents per share to preserve cash. The move is intended to strengthen its balance sheet and prevent downgrades on its prized AAA credit rating which is under review for downgrade. The move, which CEO Jeff Immelt has previously refused was coming, is expected to save GE $9 billion per year. The company is an original Dow Jones component and has paid dividends every year since 1899. It had previously increased dividends annually for the past 31 years.
GE’s stock has lost nearly 70% since mid September over concerns about under funding of its retirement program, declining asset values, the exposure of its financial division to the tightening of restrictions on credit and the effect that has on its ability to fund its dividend.
GE is a technology, media & financial services company, with products & services ranging from aircraft engines, power generation, water processing & security technology to medical imaging, business & consumer financing, media content & industrial products.
Deckers Outdoor Corp (DECK) shares down over 22% despite the fact the company reported a 14% rise in fourth-quarter profit and a 56% increase in revenues. The company also reported that expected its first quarter revenues to increase 22%, but that would be accompanies earnings per share falling 28% from 86 cents of the year-ago quarter. Wall Street was expecting a first quarter profit of 90 cents per share.
Deckers Outdoor is a designer, producer & brand manager of footwear and the category creator in the sport sandal, luxury sheepskin and footwear segments.
Corporate insiders, Corporate Executives and large shareholders have routinely used the stock they own as collateral for lines of credit and to purchase shares in margin accounts
In recent days there have been a number of large margin call related stock sales by insiders. Even partners at Goldman Sachs (GS) have been forced to borrow money to cover margin calls as they leveraged their Goldman stock to purchase alternative investments such as hedge funds and private equity deals.