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Sell in May, Curse the Day; Sony, P&G Slide; Krispy Kreme Skyrockets

Dan Berman
Hot Stock Minute

Sell in May proved to be bad advice overall for stock traders, although a late selloff on Friday left the major indices down more than 1% across the board. For the month, all still enjoyed healthy gains. On the economic front, the Commerce Department says consumer spending dipped 0.2% in April. That was its first drop in nearly a year and fell short of expectations which were for a gain of 0.1%. A separate study from Thomson Reuters and the University of Michigan found consumer sentiment in May rose to its highest level in nearly six years.

Shares of Sony (SNE) slid more than 3%. Yesterday CEO Kazuo Hirai said the company board would consider a spinoff being proposed by activist investor Daniel Loeb, but explained that he preferred to keep things as is. Loeb wants Sony to break off its troubled electronics unit, essentially isolating it from the more profitable entertainment division. Sony is said to be working with Morgan Stanley (MS) and Citigroup (C) on a possible IPO if the board moves ahead with the proposal.

Procter & Gamble (PG) moved more than 2.5% into the red on reports that it is planning a new company structure. The Wall Street Journal says the consumer products powerhouse is working to divide itself into four sectors. It's unclear exactly how the company would be divided, but each of the four units would have a president who would report to newly returned CEO A.G. Lafley. Eventually one of them would likely be picked to replace Lafley when he retires again.

Krispy Kreme (KKD) soared 21% today in reaction to its quarterly earnings which were released after yesterday's closing bell. The doughnut maker earned 20-cents a share, excluding certain items. Estimates had been for 17-cents. Revenue was also above consensus and the company is raising its full-year forecast. Krispy Kreme is also discussing copying some of the successes of its larger rival Dunkin Donuts, such as expanding its drink menu.

UnitedHealth Group (UNH) was down 4% amid reports the company may limit its exposure to new exchanges created under the health care overhaul. Bloomberg is reporting that UnitedHealth will offer coverage in just a dozen of the new statewide exchanges. That's because it believes the first wave of new customers is likely to have a pent-up demand for care. UnitedHealth Group is the country's largest health insurer. Competitors like Cigna and Aetna seem to be taking the same approach.