Today’s Stock Market Midday Update news is led by two stocks that are headed in the opposite direction as the final week of trading in the 2011 calendar year kicks off.
All three major U.S. stock indices were trading at relatively unchanged numbers by 11:30am Eastern Time; paring back early gains on Tuesday. The Dow Jones Industrial Average (.DJI) index was down 3 points – or 0.02% – to 12,291 while the NASDAQ Composite index was down 1 point to 2,617. The S&P 500 was unchanged from Friday’s close – coming in at 1,265 points by 11:30am Eastern Time on Tuesday.
Sears Stock Plunges 20 Percent
Shares for Sears Holdings Corporation (NASDAQ:SHLD) plunged 20 percent by midday Tuesday to $36.42 as the nation’s fourth-largest broadline retailer announced it will close more than 100 Sears and Kmart stores. Sears CEO Louis D’Ambrosio told investors Tuesday, “Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce ongoing expenses, adjust our asset base, and accelerate the transformation of our business model.”
D’Ambrosio added, “These actions will better enable us to focus our investments on serving our customers and members through integrated retail – at the store, online and in the home.” The complete December 27th investor update from Sears can be viewed here.
Comparable sales for the company in 4Q FY 2011 had not been up to par – falling 5.2% for the eight-week period ending on Christmas Day. The move by Sears means it will take more than $2 billion in charges with its pretax profit for the fourth quarter declining over 50 percent from 2010 results.
With a Market Capitalization of $3.89 billion, Sears had its YTD peak at $94.79 per share in February. Below is the Year To Date stock chart for Sears Holdings Corporation.
Mead Johnson Shares Recover
Shares for Mead Johnson Nutrition Co. (NYSE:MJN) recovered Tuesday – up 5.5% to $68.92 by midday after last week’s Enfamil recall. The baby formula was removed from Wal-Mart, SuperValu and other retail store chains following the death of a Missouri infant who had consumed the product.
On Christmas Day, Mead Johnson released a statement backing up its Enfamil product. “Mead Johnson Nutrition has conducted a new round of rigorous testing on samples of a batch of Enfamil PREMIUM® Newborn powdered formula related to a U.S. Food & Drug Administration (FDA) investigation. Drawn from samples parallel to those being tested by public health officials and following the same methodology, the new testing did not detect any presence of Cronobacter,” the company reported. The full statement can be viewed here.
Mead Johnson reported an Earnings Per Share of $2.54 in its most recent financial statement with a P/E ratio of 27.11 and a Market Capitalization of $14.01 billion. Below is the company’s YTD performance stock chart.
U.S. Home Prices Decline
According to the Standard & Poor’s/Case-Shiller Home Price Index, home prices fell in 19 of 20 major U.S. cities for the month of October. Real estate prices in Atlanta and Las Vegas were down the most month-over-month despite having shown growth earlier in the year. “Atlanta and the Midwest are regions that really stand out in terms of recent relative weakness. These markets were some of the strongest during the spring/summer buying season,” S&P’s index committee Chairman David Blitzer said Tuesday.
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