Stocks Post Worst Thanksgiving Week since 1932 (AAPL, AMZN, BAC, CVX, DE, FSLR, GRPN, HPQ, LNKD, NEM, NFLX, S)

Published on Saturday, 26 November 2011 08:01 Written by TradersHuddle Staff

Weston, November 26^th (Tradershuddle.com) – Stocks closed the week sharply lower, with the S&P 500 and the Dow Jones Industrial Average posting their worst Thanksgiving week decline since the Great Depression. EU debt crisis contagion fears increased after a German failed bund auction, amid raising yields in the rest of the euro zone. Weak economic data around the world added to the market woes, in which participants hopes for a strong Black Friday didn’t get much traction.

For the week, the blue chip index tumbled 7.59%; the S&P 500 Index slumped 8.32% and the NASDAQ plunged 8.86%.

At the start of the shortened holiday week, stocks closed sharply lower, with the Dow Jones Industrial turning negative for the year and the S&P 500 on pace for its worst November since 2008. Worries over the debt crisis in Europe and the uncertainty of the ballooning national debt in the U.S. without the emergence of a credible plan to address it, weighed on market sentiment, which had been already under pressure on concern over global growth.

M&A was very active, with Pharmasset (NASDAQ:VRUS) being acquired by Gilead Sciences (NASDAQ:GILD) for about $11 billion or $137 per share in cash, an 82% premium to Friday’s closing price. And Global Education & Technology Group (NASDAQ:GEDU) announced that it has entered into a definitive agreement and plan of merger with Pearson plc (NYSE:PSO), pursuant to which Pearson would acquire all of the outstanding shares of the company for a total value of approximately $294 million.

In Europe markets tumbled, closing near the lowest level in seven weeks as participants reacted negatively to Moody’s warning on France’s credit rating, while Spain election yielded a sweeping victory to the opposition party, with another European government falling due to the worsening crisis.

Financials were again the lead culprit in market weakness amid ongoing jitters in the space on worries over Europe and the impact of uncertainty of a debt deal in economic growth. Bank of America (NYSE:BAC), the largest U.S. lender, tumbled 5.02% to $5.49, posting the biggest decline in the Dow Jones Industrial Average and in the sector.

Morgan Stanley (NYSE:MS) also posted sizeable losses amid the concerns over the EU debt crisis. The stock fell 4.29% to $13.60 despite getting an upgrade to a Buy from Hold at Collins Stewart. Last week Fitch ratings said that its outlook for the U.S. biggest banks could be downgraded if the debt crisis in Europe was not addressed in a timely manner and spirals out of control.

Industrials were also under heavy pressure after China's Vice Premier indicated he believes the global economy will enter a long-term recession and that China needs reform to combat slower growth. Comments from China and the debt woes prompted a risk off in the space, with big economic bellwethers taking a tumble.

Caterpillar (NYSE:CAT), the world’s largest earthmoving equipment maker, lost 2.99% to $91.12, closing below calculated support at $92.80 and posting one of the biggest declines in the Dow. Railroads and other transports were also impacted in the sector despite a drop in crude oil. Union Pacific (NYSE:UNP), the Omaha, Nebraska based railroad that offers long-haul routes from all major West and Gulf Coast ports to Eastern Gateways, tumbled 3.56% to $98.41, closing just 0.68% above its calculated support at $97.74. Morgan Stanley reiterated its Overweight rating in the stock. FedEx (NYSE:FDX), the worldwide express package delivery company, fell 2.27% to $79.38 ahead of the start of the Holiday shopping season.

In the technology space, Apple (NASDAQ:AAPL), the maker of iPads and iPhones, didn’t escaped from the weakness of the day, with shares falling 1.58% to $369.01; however it was able to outperform the broad market and the tech space amid speculation that the launch of the iPhone 4S in China is near, as China Unicom is still on track to launch the device before the end of the year. According to numerous surveys ahead of the Holiday shopping season, Apple’s products top the wish lists of U.S. consumers, which bode well for quarterly sales. Last week, Barclays said that Apple still has significant holiday momentum with the iPhone, Macs and it explosive growth in China. The firm believes the iPad will remain the industry standard and that the jury is still out on how much share could the Kindle Fire take away, with the iPad shipments showing sequential growth in the quarter.

Meanwhile, NVIDIA (NASDAQ:NVDA), the world leader in visual computing technologies, spiked to the top of the S&P 500 on reports that suggested its chips will be back on the new round of Apple’s MacBooks. NVIDIA Rallied 5% to $14.63.

And LinkedIn (NYSE:LNKD), the social network site for professionals, fell 2.78% to $70 after trading as low as $66. The stock recovered most of its loses, which had came on concern over increased share float, as 24 million shares owned by insiders became available to sell with the lockup period expiring today. Last week, LinkedIn had a secondary offering, which priced at $71 per share.

On Tuesday, the market started in negative territory after a weaker than expected third quarter GDP revision. Futures received pressure from Europe, as Spanish bond yields surged to the highest level in 14 years. And rating agencies removed the prospects of an imminent downgrade to the U.S. credit rating following the failure of the Congressional Super Committee to agree on a debt-cutting package.

In Europe, markets extended their decline from the prior session, as Banks led the move lower amid ongoing debt woes, as the Spanish bond yield surged following a disappointing debt auction, with investors showing lack of confidence that the region is on track to solve the debt crisis and avoid contagion amid the bigger economies.

Stocks saw a move off the lows of the session after the IMF credit line news, with the major benchmark indices actually moving into positive territory; however after digesting the news that the credit line is not big enough to fix the debt woes and its designed for countries that might be impacted by the debt crisis, but not for the countries, like Italy, already involved in the crisis, coupled with the FOMC minutes that showed an uncertain outlook, weighed on the market sentiment amid thin trading volume.

The Energy sector fell, as crude oil pullback to the unchanged line after trading as high as $98.5 per barrel to finally close at $98.01 per barrel. The move lower in equities and concern over economic growth following the lower revision to U.S. GDP weighed on the fuel and the sector. Halliburton (NYSE:HAL), the provider of oilfield technologies and services to upstream oil and gas customers, was among the biggest under performers, with shares losing 3.33% to $33.70, extending its prior session rout, after the stock closed below calculated support at $36.29, last week.

But helping support the sector, Marathon Petroleum (NYSE:MPC), the fifth largest U.S. refiner, jumped more than 2% to $33.52, posting the biggest gain in the sector as gasoline futures advanced ahead of the heavy travelled Thanksgiving holiday. Chevron (NYSE:CVX), the second largest U.S. energy producer, also received an upside bid, gaining 0.79% to $96.42. Chevron posted the biggest advance of the blue chip index. The company said that it believes that approximately 2,400 barrels of oil have been emitted to date since seeps were first detected on November 9 on a well off the Brazilian coast.

Materials and other economic sensitive stocks, like industrials, were also impacted by concern over sluggish economic growth and the impact of the EU debt crisis in global growth. Alcoa (NYSE:AA), the aluminum producer, tumbled 2.22% to $9.26, posting the biggest percentage decline in the blue chip index and extending its move below calculated support at $9.58. Meanwhile, Newmont Mining (NYSE:NEM), the largest gold producer, saw upside on the back of a rebound in gold prices. The bullion rebounded back above $1700 an ounce, which helped propelled Newmont 0.77% higher.

Amid the debt woes on both sides of the Atlantic and also pressured by economic growth concerns, financials were once again amid the biggest decliners, with many stocks in the sector making or trading near their yearly lows. Bank of America (NYSE:BAC) continued to trade with a 5 handle, as it posted one of the biggest declines in the sector and the blue chip index. BofA was under pressure after a report in the Wall Street Journal suggested regulators might not be pleased with the level of progress in the strengthening and fixing the woes affecting the bank, which might trigger public enforcement.

Meanwhile, the healthcare sector moved to the upside, with Medtronic (NYSE:MDT), the maker of therapeutic and diagnostic medical products, jumping 4.45% to $34.75, posting one of the biggest gains in the S&P 500. Medtronic climbed after the company posted better than expected quarterly results, while reaffirming its fiscal 2012 guidance. The company also received FDA approval for the next generation professional continuous glucose monitoring.

In the tech space, Hewlett Packard (NYSE:HPQ), the world’s largest PC maker, lost 0.78% to $26.65 after the stock cut most of its losses from the session after trading as low as $25.25. HP was under pressure after posting better than expected earnings on revenues that were in line with consensus; however investors were disappointed with downside guidance below consensus for the current quarter and fiscal 2012. Analysts had mixed views on the stock, with analysts from Citi raising their target price on HP, while Susquehanna cutting it.

Also weighing in the sector and the S&P 500, First Solar (NASDAQ:FSLR), the largest maker of thin film solar modules in the world, plunged 6.27% to $40.80, logging the biggest percentage decline in the broad market index. First Solar posted a new multiyear low of $40.64 after a flurry of earnings reports from rivals showed wider than expected losses on revenues that were slightly above consensus, with most of the rivals cutting their shipment guidance for the following year. Rival, JA Solar (NASDAQ:JASO), the China based solar cells manufacturer, said it lost $0.36 per share, $0.33 worse than consensus, on revenues that fell 31.6% year over year to $388 million versus consensus of $373.48 million. JA Solar also lowered its full year 2011 shipment guidance, as it estimates it will ship about 1.6 GW. Shares of JA Solar had a sharp reversal after trading at new yearly lows of $1.40 per share, ending 5.26% higher at $1.60.

Apple (NASDAQ:AAPL) shook off the weakness of the day, jumping 2.03% to $376.51, outperforming in the sector and the broad market index as participants came back to the stock ahead of the start of the holiday shopping season. The company announced that it will join on the retail madness for Black Friday, holding a special sales event on its website and retail locations. The stock also received a boost from news that it won a patent case brought by HTC Corp. and after Jefferies raised its EPS estimates on the tech giant. The firm said that reports regarding the iPad weakness have been overblown, as they fail account for inventories, the iPad 3 production starting soon and a move away from Samsung towards Sharp, as the relationship with the Korean electronics giant continues to deteriorate amid the patent war between the companies in smartphones and tablets. Jefferies cut its iPad shipment estimate for the quarter from 17 million to 13 million, while its EPS estimates for the current quarter were bumped to $9.85 versus consensus of $9.66.

In the consumer discretionary space, retailers were also in focus ahead Black Friday and in the case of Amazon (NASDAQ:AMZN), the largest online retailer, cyber Monday. Amazon ended the day higher by 1.63% to $192.34. Amazon has been having promotions during this week in anticipation of the sales. Amazon also hopes that increased consumers with smartphones should be able to compare prices on its site, resulting in higher sales.

But Netflix (NASDAQ:NFLX), the video rental subscription service Company, tumbled 5.40% to $70.45, weighing on the sector. Netflix posted a new yearly low at $69 after participants were disappointed following a company warning of a loss for 2012. Numerous brokerages cut their target prices, as it also announced it priced 2.86 million shares at $70 per share of a concurrent common stock offering together with $200 million of convertible notes financing, prompting negative comments from analysts and TV pundits, especially after the company was buying back stock above $200 per share just a couple of quarters ago.

Mid week, stocks ended sharply lower as participants exited positions ahead of the Thanksgiving Holiday amid increased worries over the depth of the EU debt crisis following a dismal German Bund auction, and after weak economic data in the U.S. and China spurred concern over global growth.

In Europe, markets extended weekly declines after poor demand at a German government bond auction sparked fears that the bonds on Europe’s strongest economy were losing some of their luster amid the impacts of a debt crisis that continues to spread and impact economic growth in the region. The dismal bond auction had the worst demand in the euro era, with Germany only selling 60% of the bonds brought to the auction. 

Weak economic data both in China and the U.S. also weighed in the commodity space. Crude oil tumbled, closing near $96 per barrel, as inventory data was outweighed by economic concern. Precious metals were also under pressure, with gold falling below $1,700 an ounce and silver dropping 2% to $32.02 an ounce.

Steelmakers were among the biggest decliners in the material sector on worries over future demand amid weak economic growth. United States Steel (NYSE:X), the integrated steel producer with operations in North America and Europe, posted one of the biggest declines in the broad market index, as shares slumped 7.59% to $22.41.

Meanwhile, coal stocks were also on the bottom of the energy sector. Alpha Natural Resources (NYSE:ANR), the steam and metallurgical coal producer, tumbled 6.68% to $19.27, extending its yearly rout to 67.9%.

Financials were under pressure after the German Bund auction signaled a deepening debt crisis and after the Federal Reserve said that it will stress test the 6 major U.S. banking firms against a potential market shock, including the debt crisis in Europe spiraling out of control. Bank of America (NYSE:BAC) posted the biggest percentage decline in the Dow Jones Industrial Average and logged a new multiyear low of $5.11.

Goldman Sachs (NYSE:GS), the investment-banking firm, fell after Macquarie initiated its coverage on the stock with a Neutral.

The industrial sector held up much better, as it received support from a upside move in Deere (NYSE:DE). The farm equipment maker jumped close to 4%, posting one of the biggest advances in the S&P 500 Index. The company posted solid results and upside guidance. The company said it earned $1.62 per share, $0.19 better than consensus, on revenues that climbed 20.43% to $7.9 billion. For the current quarter it expects revenues above consensus, while for fiscal 2012 it expects earnings and revenues above consensus.

In the tech sector, First Solar (NASDAQ: FSLR), the largest maker of thin film solar modules in the world, gained 1.91% to $41.58 after trading as high as $42.99 and as low as $40.05, a new multiyear low. Rival Yingli Green Energy (NYSE:YGE), the China based photovoltaic modules maker, posted earnings of $0.14 per share on revenues that climbed 36% year over year to $667.7 million. The company lowered its shipment outlook, but still shares surged 11.9% to $3.96.

And Apple (NASDAQ:AAPL) slumped 2.53% to $366.99, practically giving up yesterday’s gains. Apple has calculated support at $365.91, near its 200day moving average, and resistance at $426.70, its all-time high. The stock traded as low as $366.88, as it was able to hold this level.

Elsewhere, Pandora Media (NYSE:P), the Internet radio Company, plunged 11% to $10.51 after disappointing investors with a lackluster outlook for the current quarter. Pandora posted solid quarterly results, with earnings above consensus and revenues surging close to 100% year over year to $75 million. Pandora is trading well below its IPO price of $16.

And Groupon (NASDAQ:GRPN), the provider of daily deals, plunged 15.50% after breaking below its IPO price and posting a new all-time low of $16.71. Shares have been under heavy pressure in the last sessions on concern over valuation and competitive threats, as Living Social was also raising money to increase its offerings.

At the end of the shortened holiday week, stocks closed the trading session with modest losses, with the S&P 500 and the Dow posting their worst percentage declines in a Thanksgiving week since 1932. The market was not able to hold to earlier gains. Participants were cautious amid ongoing debt crisis jitters in the euro zone, which outweighed hopes that the U.S. consumer will help the world largest economy out of sluggish growth, as Black Friday kicked off the Holiday Shopping season. Rating agencies downgrading Belgium, and Portugal, and European leaders showing divisions in how to address worsening crisis, weighed on market sentiment.

The energy sector was under pressure, as crude oil saw some volatile trading, pressured early on by a stronger Dollar. The commodity traded as low as $95 per barrel. Chevron (NYSE:CVX), the second largest U.S. energy producer, fell after the company announced that it would voluntarily suspend current and future drilling operations off the Brazilian coast. The company acknowledges that the Brazilian regulator posted a notice of suspension in its website. Chevron posted one of the biggest declines in the Dow Jones Industrial Average. For the week, the stock lost 13.8%.

Technology was also under some pressure, and weighed heavily on the S&P 500 due to its weighing. Apple (NASDAQ:AAPL) closing just below its 200day moving average at $363.85, leaving the stock in an area that could see a sharp rebound or received additional downward momentum. Apple joined the Black Friday frenzy with a sale on it website and retail locations, offering among many products its iPad 2 Wifi models with around an 8% drop in price, with the basic model sale price at $458. For the week, Apple lost 5.49%.

Hewlett Packard (NYSE:HPQ) fell1.51% to $25.39, posting one of the biggest declines in the blue chip index and extending its weekly decline to 7.9%.

Also weighing on the sector, Sprint (NYSE:S), the third largest U.S. wireless carrier, tumbled 3.64% to $2.38 after trading as low as $2.34. The stock was under pressure on concern over Clearwire (NASDAQ:CLWR). A Clearwire interest payment looms next week on December 1^st, which even Clearwire CEO disclosing earlier in the week that the company was considering default. Rival, AT&T (NYSE:T) fell modestly after saying it would take a $4 billion charge if its proposed merger with T-Mobile fails to obtain regulatory approval, triggering a massive breakup fee to Deutsche Telecom, the owner of T-Mobile.

On the flip side, Yahoo! (NASDAQ:YHOO), the Internet media company that owns the second largest search engine, gained 1.07% to $15.10 after trading as high as $15.25 on reports that Microsoft (NASDAQ:MSFT) signed a confidentiality agreement with the company, joining other potential bidders for the company.

In the consumer discretionary sector, retailers didn’t receive a boost from investors despite Black Friday. Best Buy (NYSE:BBY), the consumer electronics goods and appliances retailer, fell slightly despite according to reports being among the leading retailers in terms of shopper traffic so far for the day.

Amazon.com (NASDAQ:AMZN) tumbled 3.49% to $182.40, closing below calculated support at $183.58. The company joined the flurry of deals for the day and didn’t wait for cyber Monday, as it hopes that more shoppers armed with smartphones will be able to better compare deals in its site versus the brick and mortar stores, driving additional traffic and sales to the online retailer. The company also expects that for this holiday season its newly released Kindle Fire tablet will be able to cut into the Apple’s iPad dominant market share. Amazon had a dismal week, falling 16.1%.

And Netflix (NASDAQ:NFLX), also weighed heavily, with shares slumping another 6.63% to $63.98. The stock logged a new 52-week low at $62.90, as it continues under sharp selling pressure since it reported sharp decline in its number of subscribers for the latest quarter and issuing poor guidance for the current quarter. For the week, Netflix plunged 27.2%.