News Column

Daily Wrap: Upbeat quarter ends on a down note

June 30, 2014

By David Nicklaus, St. Louis Post-Dispatch

June 30--TODAY'S INDEXES -- Dow industrials 16,826.60 -- 25.24

S&P 500 1960.16 -- 0.80

Nasdaq 4408.18 +10.25

WINNING STREAK: The major indexes lost a little ground Monday, but booked gains for the year's second quarter and first half. The S&P 500 rose 4.7 percent in the second quarter and the Dow added 2.2 percent. It was the S&P 500's sixth consecutive quarterly gain.

YAHOO, HURRAH: Yahoo shares gained 2.6 percent after an upgrade from Piper Jaffray analyst Gene Munster. He says a high expected valuation for Alibaba, the Chinese Internet company that's in the process of going public, should add $6 to the value of each Yahoo share. Yahoo owns 22.6 percent of Alibaba.

BUILDING EXCITEMENT: Homebuilder D.R. Horton advanced 3 percent as the National Association of Realtors said its index of pending home sales rose 6.1 percent last month.

BUMPER CROPS: Corn futures prices fell 4.9 percent to $4.25 a bushel after the Agriculture Department said stockpiles of the grain were larger than expected. The department also said farmers will plant a record 84.8 million acres of soybeans this year, sending soybean futures tumbling by 5.8 percent.

LOCAL INDEX: The Bloomberg St. Louis Index rose 0.2 percent.


Build-A-Bear 6.5% Huttig Bldg Products -13.4%

Isle of Capri Casinos 5.0% Reliv International -- 8.6%

Allied Healthcare 3.0% Synergetics -- 3.6%

LOCAL LOSER: Huttig Building Products fell 13 percent after posting a 24 percent gain on Friday, the day it was added to the Russell Microcap Index. Index-tracking investors have to adjust their holdings in a thinly traded stock: Huttig's volume on Friday was 11 times the daily average during the previous three weeks.

LOCAL GAINERS: Isle of Capri Casinos surged after Reuters said the company is in talks to be acquired by Gaming and Leisure Properties, a real estate investment trust. ... Foresight Energy rose 2.8 percent, but the significant number was its closing price of $20.30. It's the coal company's first close above its $20 IPO price since it began trading a week ago.

ANALYST'S INSIGHTS: Jeffrey Zekauskas of JP Morgan has an "overweight" rating on Monsanto, and he says the company's big share-buyback announcement last week represents "a fundamental change in its idea of an appropriate capital structure." In short, it's willing to hold less cash and carry more debt. As for the revelation that Monsanto held acquisition talks with rival Syngenta, Zekauskas thinks there's slim chance of such a deal happening. "We would discount Monsanto's interest in such a transaction given the $11 billion share repurchase effort," he writes. "We think Monsanto has no strong interest in building a larger crop chemical business by acquisition."

THE DAY AHEAD: Ward Automotive reports on U.S. vehicle sales. Forecasters think domestic sales declined slightly, to an annual rate of 13.0 million in June from May's 13.1 million rate.

David Nicklaus is business columnist at the St. Louis Post-Dispatch. Subscribe to his Facebook page or follow him on Twitter @dnickbiz.


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Source: St. Louis Post-Dispatch (MO)

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