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The Markets Now: Bank Stocks Remain Lower After Cyprus Bailout

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Plus, analyst suggests that JC Penney become a REIT.

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Stocks pared earlier losses caused by the news of the Cyprus bailout. The Dow (INDEXDJX:.DJI) decreased 0.14% to 14,494.05. The S&P 500 (INDEXSP:.INX) dropped 0.32% to 1,555.66, and the Nasdaq (INDEXNASDAQ:.IXIC) fell 0.18% to 3,243.12. The National Association of Homebuilders reported the Housing Market Index fell to 44 this month from 46 in February. Analysts had expected a reading of 47. The present sales component of the index dropped to 47 dragging down the index. However, the component measuring sales six months out rose one point to 51, and the traffic component bumped up 3 points to 35. Both of these components suggest greater future sales and continued construction of new homes.

The US Treasury will auction $45 billion worth of 4-week Treasury bills, $35 billion worth of 3-month Treasury bills, and $30 billion worth of 6-month Treasury bills.

Hewlett-Packard Company (NYSE:HPQ) jumped 2.52% to $22.74. Morgan Stanley analyst Katy Huberty upgraded Hewlett-Packard to "overweight," or the equivalent of a buy rating. Huberty expects the company's free cash flow and EPS to grow in its 2014 fiscal year.

HP Enterprise Services announced today the launch of a new information management and analytics service. The service will help clients "rapidly gain increased value from Big Data assets to support their efforts to drive revenue opportunities, improve efficiency, reduce risk, and lower costs."

Citigroup (NYSE:C) slid 1.86% to $46.38. Investors worry that the Cyprus bailout will cause bank runs in other countries as depositors in Europe worry about the seizure of their money. Such an event would likely hurt the US financial system.

Goldman Sachs (NYSE:GS) fell 1.67% to $152.25. The US Supreme Court ruled that Goldman Sachs has to defend against claims that it misled investors about mortgage securities that lost value during the 2008 financial crash.

Morgan Stanley (NYSE:MS) dropped 2.68% to $22.96, making it one of the biggest losers among large banks today.

JC Penney (NYSE:JCP) spiked 8.98% to $16.87. ISI Group analyst Omar Saad calculated that JC Penney could turn its top 300 stores into a real estate investment trust (REIT) generating $40 per share in enterprise value. The stores would sublet the space to brands and other retailers, which would pay a below-market rate of $40 per square foot.

Oppenheimer reported after touring stores that customers have responded positively to the Joe Fresh launch on Friday.

Twitter: @ChrisWitrak
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