Stocks Under Pressure on Greek Concern

Published on Monday, 06 February 2012 13:19 Written by J Hawk

New York, February 6^th (TradersHuddle.com) – U.S. stocks opened lower this morning with concerns over the failure of the European Union to come to terms with Greece over austerity measures, continuing to weigh on world stock prices.

The Dow Jones Industrial Average declined by more than 40 points on the opening or 0.4 percent to 12,812 while the broader indexes also declined, with the S&P 500 index dropping -5 points, or -0.3 percent and the Nasdaq Composite shedding  -12 points or – 0.4 percent to 2894.

At midday, the Dow continued near its opening levels, down -43 or -0.3% to 12,819, while the broader based indexes also stayed in the red, with the S&P 500 dropping -3 or -0.3 percent to 1,341, and the Nasdaq Composite index down -9 or -0.3 percent to 2,897.  

According to a spokesperson from Greek Prime Minister Lucas Papademos’ office, talks between the Prime Minister and the three parties backing the interim government postponed talks until Tuesday, to give the Prime Minister a chance to meet with international creditors. PM Papademos is being pressured by European leaders, including French President Sarkozy and German Chancellor Merkel to agree to new austerity measures as a condition to receive a second bailout.  

Without the second €130 billion ($171 billion) bailout, Greece faces defaulting on its debt when the next debt repayment comes due in late March. No significant U.S. economic data was released this morning, with relatively few releases coming out the rest of the week.

U.S. Stocks in the News

Boeing (NYSE: BA) stock was down -0.95 or -1.24 percent midday to $75.39 per share, after the aircraft manufacturer reported it had discovered an error in the manufacture of some of its 787 Dreamliner planes that caused delamination in a fuselage section of the aircraft. The Dreamliner has been in service since last year after three years of delays, with 50 units assembled so far. According to Boeing spokesman Scott Lefeber, “Boeing has found that incorrect shimming was performed on support structure on the aft fuselage of some 787s,” and added that, “we do not expect that it will affect our planned product rate increases.”

Humana Inc. (NYSE: HUM) stock was down -5.08 or -5.64 percent at midday to $85.03 per share, after the company reported net income for the fourth quarter had jumped to $199 million or $1.20 cents per share, compared with $107 million or 63 cents per share in the same period one year ago. Despite meeting street expectations on earnings, the company forecast 2012 EPS would be $7.50 to $7.70 per share, which fell short of analyst expectations of $7.99 for 2012.

SureWest Communications (NASDAQ: SURW) stock was up +6.69 or +42.91 percent midday to $22.28 per share, after the company reported it had entered into a definitive agreement with Consolidated Communications Holdings Inc. (CNSL) in which all outstanding shares of SureWest would be acquired by Consolidated, in a stock and cash transaction valued at approximately $340.9 million, excluding debt. The agreement gives SureWest shareholders the option of tendering their shares for $23 per share in cash, or the equivalent amount in Consolidated stock, with an average price of Consolidated stock over the next 20 days set as a valuation. The price of the deal puts a 47% premium to SureWest stock’s February 3^rd closing price.