Market Plunge Drags O.C. Stocks to Yearly Low : Sell-off: A dozen companies, including builders and financiers, hit bottom as traders react to economic news.
A dozen Orange County stocks hit their 52-week low Monday as panicky morning selling sent the stock market down nearly 105 points, taking the Dow Jones industrial average to its lowest level of the year.
By the end of the day, the market had rallied to close at a loss of only 21.61 points.
Traders arrived at work Monday upset about Friday’s steep fall, when the Dow lost 53.76 points as investors became convinced that the Federal Reserve would hold interest rates steady, rather than cut them right away. The Federal Reserve board meets today.
Friday’s employment report for September also showed continued weakness in the national economy.
Therefore, several Orange County companies that are sensitive to changes in interest rates, such as builders and financiers, saw their stock prices drop.
But health care and biotechnology stocks were the most volatile Monday, showing up as three of the county’s top percentage gainers and three of the biggest losers. Most health care and biotechnology stocks, however, closed lower.
“It was nothing drastic; it was kind of an orderly down,” said William Davenport, a vice president in the Newport Beach office of brokerage Kidder Peabody. “The stocks that had already gone bust--the builders and some biotechnology--didn’t get hurt much. The stocks that seemed to fall the most were the stocks that had not been previously corrected.”
Fidelity National Financial, a title insurance company in Irvine, and PacifiCare Health Systems, a Cypress-based health maintenance organization, each lost $1 Monday, after major gains all year. That was a 4.8% drop in Fidelity’s stock and a 2.6% drop for PacifiCare.
Koll Management Services, the real estate management company in Irvine, lost $1, or 8%, but Ray Wirta, chief executive, attributed that to news on Friday that the company would not be making an anticipated acquisition of competitor Tishman West Cos.
The Federal Reserve’s failure to adjust the U.S. discount rate, despite poor jobs data on Friday, disappointed investors who had hoped that such a move would spark an easing of credit here.
Home builder Presley Cos. lost 13 cents, to close at $2 Monday. However, Standard Pacific, the Costa Mesa-based home builder, gained 13 cents, to close at $5.13.
CommerceBank of Newport Beach lost $1, or 13%, and Fidelity National also lost $1, or 4.8%. Fidelity National’s price change could be attributed to its announcement Monday that it has agreed tentatively to acquire Security Title and Guaranty Co. in New York for $21 million in cash.
Orange County companies whose stocks hit a 52-week low Monday include Birtcher Medical, the Irvine-based maker of surgical devices; Downey Savings & Loan in Newport Beach; National Education Corp. of Newport Beach; Quantum Health Resources in Orange and DVI Health Services of Irvine.
By 8 a.m. on the West Coast, Monday’s market was down more than 100 points, but institutional investors apparently decided the low represented bargain-basement prices and began buying stock before the day ended.
“That shows a real strength in the market,” said Jeff Kilpatrick, president of Newport Securities Corp. in Costa Mesa. “The institutional, long-term investors are not as pessimistic as the lay public may be.”
