Hot Stock Minute

Stocks end slightly lower; Herbalife loses 11% ahead of Ackman's presentation

Stocks began the day down sharply but began to recover after President Obama’s remarks about the conflicts in Gaza and Ukraine. Stocks ended the day slightly lower with the Dow (^DJI) down 48 points at 17,052, while the Nasdaq (^IXIC) fell 7 points to 4,425 and the S&P 500 (^GSPC) closed the day down 5 points at 1,974.

Herbalife was among the biggest losers, ending the day down $6.82 -- dropping more than 11% -- to $54.02 after hedge fund manager William Ackman said his Pershing Square Capital will make a presentation on Tuesday that will “expose incredible fraud" at the company.

McDonald’s (MCD) and Yum! Brands (YUM) also fell, under pressure from reports that the Shanghai-based supplier of U.S.-owned OSI Group had been using expired meat. Both suspended meat purchases from that supplier. McDonald’s, which reports earnings tomorrow before the market opens, ended the day down $1.44 at $97.55 and Yum! Brands finished $3.29 lower at $74.13.

Tobacco stocks came under pressure after R.J. Reynolds Tobacco, a unit of Reynolds American (RAI), was hit with a $23.6 billion jury verdict on Friday. A Florida jury awarded the sum to a widow whose husband was a chain smoker and died from lung cancer at the age of 36. R.J. Reynolds said it would appeal.

Reynolds American lost 67 cents to close at $57.98 while Lorillard (LO), which agreed to be purchased by Reynolds American last week, fell 68 cents to $61 and (MO), which is expected to report results tomorrow morning, fell 16 cents to $42.01. Apparently the market, which initially sold off these stocks, doesn't expect the verdict will hold after appeals.

Botox-maker Allergan (AGN), which is fighting off an unsolicited takeover from Valeant Pharmaceuticals (VRX) and investor William Ackman’s Pershing Square Capital Management, said it will cut 1,500 employees, or 13% of its workforce, in an effort to save $475 million next year. It reported better-than-expected earnings this morning and ended the day up $3.74 at $171.14.

Six Flags Entertainment (SIX) lost 98 cents to close at $39.31 after the company reported earnings that
missed on revenue despite a 4% increase and that included an 8% decline in attendance at its parks. Six Flags blamed the decline on the long harsh winter that extended the school year for many students.

Chipotle (CMG) shares surged 9% after the close to $646.02 in after-hours trading after the restaurant chain reported that second-quarter profit rose 25%, far above Wall Street expectations. Netflix (NFLX) shares rose less than 1% after it reported after the close that were generally in line with expectations. It reported more than 50 million streaming subscribers.

Tomorrow Comcast (CMCSA), Lockheed-Martin (LMT), Kimberly-Clark (KMB), Coca-Cola (KO) and Verizon (VZ) are all scheduled to report earnings before the market opens and Apple (AAPL) reports earnings after the market's close.

Investors will also get a read on consumer inflation. The Consumer Price Index for June will be released tomorrow at 8:30 a.m. Eastern.

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