News Column

Daily Wrap: Stocks dip on Ukraine worries

August 28, 2014

By Jim Gallagher, St. Louis Post-Dispatch

Aug. 28--TODAY'S INDEXES -- Dow Industrials 17080 -42

S&P 500 1997 -3

Nasdaq 4558 -12

UKRAINE SOURS MARKET: If you lost money in the stock market today, make Vladimir Putin your scapegoat.

Stocks lost steam after three straight days of gain today as Russian armor rolled into the Ukraine, and the Ukrainian government cried invasion.

The Dow Jones industrial average dipped 0.25 percent. The S&P 500 sank 0.17 percent and the Nasdaq slipped 0.26 percent.

Closer to the Ukrainian conflict, the Euro Stoxx slipped 0.9 percent.

American investors took little cheer in the news that the American economy grew a little faster in the second quarter than previously thought. The government said GDP rose 4.2 percent in the June quarter, up from the previous estimate of 4 percent.

IS ISLE OF CAPRI FOR SALE? Isle of Capri Casinos may be prettying itself up for sale, according to Gimme Credit.

"We think the company may be streamlining itself for a corporate transaction motivated by its large shareholders," the investment analysis firm said in a a report today.

Isle of Capri stock has plunged about 20 percent since late July, after the company made some switches in top management. The market took that as a signal that the company wasn't getting ready to sell itself. Reports at the time said that Gaming and Leisure Properties was interested in buying.

"We think GLPI may still be interested in a transaction with Isle but price is likely an issue," Gimme Credit said.

Isle of Capri is based in St. Louis.

MONSANTO MAY YET YODEL: Syngenta, the Swiss seed company, had a short-lived dalliance with Monsanto this year. But with Syngenta shares down by 9 percent over the past year, investors suggest that the company may now be more open to marriage proposals from Monsanto or others.

"The last couple of months weren't that pleasing for shareholders," Martin Lehmann, co-manager of 3v Asset Management's 3v Invest Swiss Small & Mid Cap Fund, which owns shares of Syngenta, said in an interview with Bloomberg News. "Management is under pressure to do something smart, and that's not a bad thing."

"There are a lot of ways to win here," David Winters, CEO at Wintergreen, which oversees about $2.2 billion, including Syngenta shares, told Bloomberg. "They've tipped their hand that they're willing to do something. Who they end up doing the dance with and mating with, we'll see but they're clearly at the dance."

Monsanto, a $61 billion U.S. seed company, explored a takeover of Syngenta earlier this year. Had that happened, Monsanto would have moved its legal address to Switzerland to cut its taxes. It's now based in Creve Coeur.

MORE GRAIN ON BIG MUDDY? The Missouri River could help ease the jam on America's railroads caused by the oil boom, according to Michael Toohey, head of the American Waterways Council.

The river is an alternate way to move grain to market, he said. "If they had a dependable nine-foot channel, you'd see more ag products moving on that waterway, says Toohey.

That might mean increasing the flow of the river, which could put Toohey at odds with environmentalists and upriver recreation interests.

The Corps of Engineers manages flow from dams on the Missouri. Toohey says the barge business is a "stepchild" to those other interests.

CENTENE GETS PROMOTION: Shares in Clayton-based Centene jumped 2.9 percent today, a day after S&P promoted the company into its mid-cap index from its small cap index. Starting Sept. 3, Centene will be in the S&P Midcap 400, leaving the S&P Small Cap 600. Mutual funds which track indexes buy and sell stocks based on such changes.

PRICE TAG ON T-MOBILE: Deutsche Telecom says it wants at least $35 a share for T-Mobile, according to Bloomberg news. France'sIliad SA this month bid $33 for the fourth largest U.S. cellular company.


Centene 2.9% Arch Coal -4.1

Mallinckrodt 2.3% Stereotaxis -3.3

Post Holdings 2.3% Viasystems -3.21

THE DAY AHEAD: We'll get word tomorrow on the Federal Reserve's favorite inflation gauge. Economists expect a slight 0.1 percent rise for July in the Personal Consumption Expenditures Index, up from 0.2 percent in June. That would put the PCE up 1.6 percent for the year. The core index, excluding volatile food and energy prices, would be up 1.5 percent for the year if economists' predict correctly.

The Fed has a target of around 2 percent for the index, and numbers below that ease concerns about keeping interest rates low.

Jim Gallagher is a reporter for the Post-Dispatch


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Source: St. Louis Post-Dispatch (MO)

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