The bankruptcy of global financial broker MF Global (NYSE:MF) put an appropriate All Hallow’s Eve scare into investors and had foreign financials stocks fleeing to mark an unsatisfying end to an otherwise phenomenal October for the market.
Papers filed in federal bankruptcy court said MF Global experienced a severe cash crunch last week after the company’s business partners pulled back. Their reason was worries about MF’s European debt holdings. MF Global, headed by former Goldman Sachs (NYSE:GS) head Jon Corzine, piled up almost $6 billion in debt of struggling euro zone members such as Italy, Spain and Portugal.
Credit agencies downgraded MF last week, and MF stock lost almost two-thirds of its value in short order. Shares were valued at $1.20 at the close of Friday, and trading was halted for MF on Monday.
Numerous international financial institutions were hammered Monday, including Deutsche Bank (NYSE:DB), which holds a large amount of MF’s debt, lost 11.5% Monday. Also falling were ING Group (NYSE:ING, -9.9%), Royal Bank of Scotland (NYSE:RBS, -8.8%,) and UBS (NYSE:UBS, -8.8%). American financial Morgan Stanley (NYSE:MS) lost 8.7% Monday.
Also tanking Monday was Honda Motor Co. (NYSE:HMC), which enjoyed a double whammy of reporting a quarterly profit decline of almost 56% — partially thanks to production disruptions from the March earthquake and tsunami — and announcing that the company will cut U.S. and Canadian factory production by 50% thanks to months of massive flooding in Thailand, where its microprocessors are made.
Because of the latest disaster, Honda said it was unable to give an earnings forecast for the full year. HMC stock lost more than 8%.
Three Up
- Humana Inc. (NYSE:HUM): Up 5.6% ($4.54) to $84.89.
- Pandora (NYSE:P): Up 4.4% (67 cents) to $15.80.
- Hansen Natural Corp. (NASDAQ:HANS): Up 2.7% ($2.37) to $89.09.
Three Down
- Agilent Technologies (NYSE:A): Down 9.3% ($3.82) to $37.07.
- Panasonic (NYSE:PC): Down 8.6% (94 cents) to $10.04.
- Green Mountain Coffee Roasters (NASDAQ:GMCR): Down 8.4% ($5.97) to $65.02.
As of this writing, Kyle Woodley did not own a position in any of the aforementioned stocks. Check out recaps from previous trading days here.
