Stocks Fall Sharply for Second Day

4:17 PM, Feb. 23, 2011 --

• NYSE down 32.94 (-0.4%) to 8,292.92
• DJIA down 107 (-0.9%) to 12,106
• S&P 500 down 8.04 (-0.6%) to 1,307
• Nasdaq down 33.43 (-1.2%) to 2,723

GLOBAL SENTIMENT

• Hang Seng down 0.36%
• Nikkei down 0.8%
• FTSE down 1.22%

UPSIDE MOVERS

(+) VRTX announced positive results from the Phase 3 STRIVE study of VX-770, an oral medicine in development that targets the defective protein that causes cystic fibrosis.

(+) SNSSD gets FDA fast-track status for Vosaroxin in AML.

(+) YOKU upgraded.

(+) CHS sales beat as EPS just misses; hikes dividend.

(+) ZLC beats with revenue.

(+) GRMN misses with earnings, guidance.

DOWNSIDE MOVERS

(-) AMAT upgraded.

(-) TOL swings to Q1 profit.

(-) HPQ disappoints with guidance.

(-) APCVZ says CVRs linked to APP stockholders to expire worthless.

(-) CNXT down as SMSC will not raise offer.

(-) TJX down after mixed earnings, guidance.

(-) SATC missed with Q4 results issued in Tuesday after-hours; downgraded this morning.

(-) LOW beats with EPS, meets with sales, sets EPS guidance in line.

(-) NFLX downgraded.

MARKET DIRECTION

Stocks tumbled for a second day, giving up early signs for some bounce from Tuesday's slide. Oil briefly topped $100, rattling the transportation sector. Energy stocks gained. Retail earnings offered some bright spots.

The blue-chip Dow suffered its first triple-digit drop in eight months on Tuesday. H-P (HPQ) was a leading drag today, down some 11% at one point, after issuing a revenue warning late Tuesday.

On Wednesday, Libya's Col. Gaddafi reportedly maintained control in the capital, but large portions of the eastern parts of the country remained out of his control as the citizen-led effort to end his 40 years in power spread. Crude hit two-year highs on concern the violent struggle there might disrupt oil supplies, especially if the upheaval extends to other oil producers in the region.

April oil futures end up 2.8% at $98.10 a barrel, the highest close since October 2008. The contract pierced $100 earlier in the day. Gasoline futures jump over 4%.

Gold closed at its highest in seven weeks, up $12.90, or 0.9%, at $1,414 an ounce.

In the latest housing data, sales of previously occupied homes rose in January as foreclosures and all-cash deals elbowed first-time home-buyers aside, suggesting vulture investors are snapping up distressed properties, driving prices to a nine-year low.

Previously occupied home sales rose to a seasonally adjusted annual rate of 5.36 million units, up 2.7% from 5.22 million sales in December, according to the National Association of Realtors. Economists say the market must hit 6 million in annual sales before it can be considered healthy.

First-time home-buyers shrunk to 29% of all purchasers, a two-year low. Foreclosures amounted to 37% of sales in January. All-cash transactions accounted for 32% of sales, the group said.

In company news:

Shares of Forest Laboratories (FRX) fell after Bloomberg reported on investors' concerns that the company's $1.2 billion buy of Clinical Data will not add earnings in time to offset losses from expiration of patents on Forest's biggest drug. Forest has been seeking to license new medications to take the place of Lexapro, which is an antidepressant that comprises 56 percent of the company's sales.

Sunesis Pharmaceuticals, Inc. (SNSSD) gained following the company's announcement that vosaroxin, its lead drug candidate, has been granted Fast Track designation by the federal regulators for the potential treatment of relapsed or refractory acute myeloid leukemia in combination with cytarabine. Vosaroxin was granted orphan drug designation by the FDA for the treatment of AML in 2009.

Apple (AAPL) shares were higher after Bloomberg reported that the computer maker is confronting a challenge over its succession plan for Chief Executive Officer Steve Jobs, who has taken medical leave for the third time in seven years. A resolution set for a vote at Apple's shareholder meeting asks the board to provide plans for replacing Jobs.

Duncan Energy Partners (DEP) soared after receiving a proposal from Enterprise Products Partners L.P. (EPD) and certain affiliates to acquire all of the outstanding publicly-held common units of Duncan Energy Partners through a unit-for-unit exchange. Enterprise is proposing consideration of 0.9545 Enterprise common units for each issued and outstanding publicly-held Duncan Energy Partners common unit.

In earnings news:

Shares of Hewlett-Packard (HPQ) fell following the company's disappointing guidance issued during the computer maker's quarterly earnings release yesterday. The company reported Q1 EPS of $1.36, vs. the analyst consensus of $1.29 per share on Thomson Reuters. Revenue was $32.3 billion, vs. expectations of $32.9 billion.

The Washington Post (WPO) fell after the newspaper publisher reported fourth quarter net income of $79 million, or $9.42 per share, off from $81.7 million, or $8.71 per share, in the same period a year earlier. The Thomson Reuters mean was for $8.72. The company had more earnings per share last year, which boosted the EPS number. Sales were $1.19 billion, more than estimates for $1.18954 billion.

Saks (SKS) gained after it reported Q4 EPS Of $0.14, including a $0.01 per share item. The Street view was $0.08 per share. Sales were $866.3 mln, vs. expectations of $860 mln.

Chico's FAS (CHS) firmed after reporting Q4 EPS of $0.12 compared to $0.10 a year earlier and a penny shy of the Thomson Reuters mean analyst estimate for $0.13. Sales increased 9% to $475.0 million from $435.7 million in last year's fourth quarter. topping the Street view for $473.2 million.

Zale Corp. (ZLC) reported Q2 revenue of $626 mln, better than the analyst consensus of $624 mln on Thomson Reuters and up 7.6% from year ago levels. EPS was $0.74, vs. $0.22 per share in the year ago quarter. The Street view was $1.27 per share.