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T3's Take 3: No Kindness for Kinder Morgan


Today's financial recap and tomorrow's financial outlook.

Market Roundup

Today, the major indices continued gyrating, keeping traders on their toes.

The S&P 500 opened down and quickly fell 1.2%, hitting an intraday low of 2066.52. The index recovered a bit and closed at 2063.59, down 0.7%.

The NASDAQ actually managed to finish barely green, kept afloat by strength in Amazon (AMZN) and Netflix (NFLX) which closed up 1.1% and 1.3% respectively. A surge in biotechnology stocks also aided the NASDAQ's outperformance.

The Russell 2000 was in the middle with a 0.4% fall.

Sectorwise, Transports (IYT) led the way down with a 2.8% drop.

And despite increasing confidence in a December rate hike, bank stocks were once again surprisingly weak, presumably because traders are concerned that the Fed will move very slowly after the first rate increase.

Oil All Over

Yesterday, crude oil got smacked hard and this morning, it put in a new 6-year low of $36.64 on weak trade data out of China.

After the open, crude rallied hard and made a high of $38.58 right around 11am. After that, the volatility began to settle into a range between $37.40 and $38.

The Wall Street Journal reported that Energy Master Limited Partnership Kinder Morgan, Inc (KMI) is meeting to consider a dividend cut. This move has been widely rumored, and delt a massive blow in Kinder Morgan's share price in recent days, culminating in today's 4.3% drop to $15.72.

Kinder Morgan is now down 63% year-to-date.

As a result of the oil price volatility, the S&P Energy Sector ETF (XLE) extended its losing streak, falling 1.0% today.

M&A Heats Up, Again

On the deal front, Fairchild Semiconductor (FCS) announced that it received an unsolicited bid for $21.70/share, topping ON Semiconductor's (ON) $20/share offer.

According to Bloomberg News, the offer was made by an investor group led by China Resources Holdings.

Canadian Pacific Railways (CP) raised its offer for Norfolk Southern (NSC), and was summarily rejected.

And finally Verizon Communications' (VZ) CEO Lowell Adams said that Verizon would consider purchasing Yahoo! (YHOO) if it comes up for sale.

In recent weeks, the rumor mill has indicated that Yahoo!'s board is considering a number of major strategic moves, including the replacement of CEO Marissa Mayer, and the sale of the core Yahoo! business and/or its stake in Alibaba (BABA).

Wednesday's Financial Outlook

The US economic calendar remains slow with Wholesale Trade and Crude Oil Inventories.

Overseas, New Zealand will release its Rate Statement and RBNZ Governor Wheeler will speak afterwards. Australia will release its employment report.

On the earnings front, Lululemon (LULU) will report before the open. Men's Warehouse (MW) and Ollie's Bargain Outlet (OLLI) will report after the close.
No positions in stocks mentioned.
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