The Dow Jones Industrial Average plunged more...
The Dow Jones Industrial Average plunged more than 107 points during the first 90 minutes of trading Monday but managed to recover half that loss to close the day down 56.44, said Irving Katz, director of research at Thomas Green/San Diego Securities.
The stock value of 10 of 62 tracked San Diego County stocks dropped more than $1 during the past week, with the greatest casualty being HomeFed. The S&L; stock dropped $5.375, to close Monday at $14 after making a new low of $13.625.
HomeFed reported a second-quarter loss of $5.04 a share, resulting mainly from a reserve of $234 million for the second quarter to cover possible loan losses. In addition to the drop in the stock, both Standard & Poor’s and Moody’s Investment Service downgraded HomeFed’s debt ratings, saying its high real estate exposure will continue to strain profitability.
Great American Bank, which announced it had signed a definitive agreement to sell its retail network of 130 branches in California to Wells Fargo Bank for $492 million, dropped $1.50 for the week to close at $1.875.
Three things must occur if Great American, which will continue to manage 81 retail offices in Arizona, Washington and Colorado, is to survive, Katz said. One, the Arizona real estate market must recover. Two, interest rates must come down so that margin spreads improve and loans become profitable. Three, the S&L;’s overhead must be drastically cut as quickly as possible to prevent further losses.
Some of the companies that have issued stock recently experienced waves of selling. Mycogen, which sold 2.5-million shares on June 4 at $17.75, dropped $3.25 this past week to close yesterday at $15.25. Gensia Pharmaceuticals, which sold 2.8-million shares at $11 on June 5, closed the week at $7.875, down $1.125.
The only company that recently sold shares to the public and whose stock remained above the offering price was Medical Imaging Centers of America, which recently sold 2.45 million shares at $12.125. MICA closed the week at $12.75.
Other stocks on the downside last week were Rohr Industries, down $3; Cubic Corp., down $1.875; Mail Boxes Etc., down $2.75; Price Co., down $1.50, and DH Technology, down $1.25.
Two firms posted new highs: Christiana at $15.25 and MarrowTech at $5.44.
BSD Bancorp’s chairman, Jim Brown, will speak to the Financial Analysts Society on Wednesday. Three annual shareholders meetings----Advanced Marketing Services, Molecular Biosystems and Xscribe----are set for Thursday.
