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.
- Consumer Discretionary
- Investment & Company Information
- William Ackman
- Reynolds American