On The Fly: Top stock stories at midday
Stocks opened sharply lower on the heels of the hotter than expected producer prices report. The market picked up downside momentum and it looked as if a major selloff could be in store. Before falling too far, though, the averages reversed and managed to cut their losses in half. Oil prices are also lower, falling roughly 2% to drop back below the $56 a barrel level. ECONOMIC EVENTS: In the U.S., the Producer Price Index rose 0.4% in both the headline and core readings for October, which was hotter than expected inflation data. The NFIB small business optimism index rose 0.8% to 103.8 in October. In Europe, Germany's Q3 GDP data came in stronger than expected, rising 2.8% from the prior year, while broader Eurozone Q3 GDP growth was about in-line with expectations. Eurostat confirmed a preliminary estimate that Eurozone gross domestic product grew 2.5% on a year-over-year basis from July to September. In Asia, China's October data was a bit softer than expected. Industrial production rose 6.2% and retail sales climbed 10%, both of which were a bit below the consensus forecasts. COMPANY NEWS: Shares of General Electric (GE) are down again today as analysts issued their reactions to yesterday's guidance cut and dividend reduction at the industrial giant. Among them, RBC Capital analyst Deane Dray downgraded GE to Sector Perform and cut his price target to $20 from $25, saying that he now expects the turnaround at the company to be more protracted than previously anticipated. Meanwhile, JPMorgan analyst C. Stephen Tusa, who has been among the most vocal bears on GE, believes the lowered numbers and validation of fundamental challenges discussed yesterday at the company's investor day reinforce his view of downside in the stock. GE shares have fallen to a 6-year low at $17.66, sliding over 7%... Home Depot (HD), another member of the Dow, reported stronger than expected comparable sales growth, driven in part by recovery efforts following recent hurricane activity, and raised its fiscal year profit outlook. The stock, which had been strong in advance of the earnings report, was up about 1% at midday. MAJOR MOVERS: Among the notable gainers was Buffalo Wing Wings (BWLD), which jumped 25% after The Wall Street Journal reported that the restaurant chain owner has received a takeover bid from private-equity firm Roark Capital, which has previously been involved with brands including Arby's, Carvel, and Wingstop. Also higher was Advance Auto Parts (AAP), which gained 20% after its quarterly earnings topped expectations. Among the noteworthy losers was Loxo Oncology (LOXO), which dropped 11% after the company announced a partnership with Bayer (BAYRY) to develop and commercialize its two lead cancer-fighting drugs. Also lower following their earnings reports were Dicks Sporting Goods (DKS), which fell 6.5%, and Switch (SWCH), which dropped more than 6%. INDEXES: Near midday, the Dow was down 46.63, or 0.2%, to 23,393.07, the Nasdaq was down 21.66, or 0.32%, to 6,735.93, and the S&P 500 was down 6.73, or 0.26%, to 2,578.11.