It was another tough day in the market as oil was up again and worries about the regional banks spooked investors. The DOW finished down 131 point to close at 12,029. We're getting closer to the market lows set earlier this year when the DOW twice dropped to around 11,700. I don't know if we'll get there again or if we'll go even lower, but days like today are not very encouraging. In yesterday's recap I talked about the after hours announcement by YRC that second quarter earnings would be higher than previously expected. I was skeptical of this announcement as it looked like the upside would come from consolidating benefits plans rather than stronger business. The stock managed to tack on 5% today, but one analyst was not impressed by the announcement. I guess it remains to be seen if the earnings picture really does improve from here. I have to believe the rise in oil prices is causing the consumer to cut back.
News specific to my portfolio:
My portfolio again outperformed the DOW as I was only down slightly. The biggest winner was Chesapeake Energy (CHK) which made a new 52 week high at $66.08 before settling at $65.94. There was no specific news on the stock that I can find, but natural gas was up, so I'm sure that had something to do with the rise. This stock has been on a tear, but it has to pull back at some point. If this stock continues to $70 in the short term, I will have to sell some of my position. US Steel (X) was also up today as it charged forward almost 3%. Again, I could find no specific news that would account for this. General Electric was the biggest loser in the portfolio today dropping 2.25% closing at $28.21. I'm not too concerned as I am in this one for the long term. In fact, I'm glad to be getting such a good buying opportunity and have a limit order in to buy more if the stock drops to $27.50. US Bank was also a loser today dropping 2.15% to close at $30.01. My limit order to buy at $30 was filled today, so I'm happy with this development. This is another great company that has been hurt by the bad news surrounding its peers. USB steered clear of the sub-prime mortgage mess, but they are still being sold off with other financial stocks. I have a limit order in to buy more of this stock if the shares drop to $29. I made one other move in the portfolio today selling some shares of Goldman Sachs (GS) at $185.25. I made just a small amount on these shares that I bought a couple of months ago, but I am happy to take profits in the name right now. After the spectacular earnings announcement yesterday, I expected better performance from the stock. However, we're seeing the same sort of stuff we've seen with GS stock over the last several months. They announce good things, their competitors announce bad things and everyone focuses on the bad stuff coming out of the other companies. In the past this has created several buying opportunities. I'm hoping the stock will drop to about $165, where I will be more than happy to buy these shares back. One last note... after the market closed today, Burllington Northern (BNI) announced that their second quarter earnings would not meet estimates because of higher fuel prices and because they have lost some business due to flooding in the Midwest. I'm a little torn by this announcement because I really like the stock. I believe they will continue to benefit from higher fuel prices because they will take business away from the truckers. However, we know they won't meet their estimates for this quarter and the stock is sure to take a hit. I might be better off selling my shares and waiting for a better entry point once we get through this rough spot. At this point, I'm not sure what to do with the stock.
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