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Monday, January 12, 2009
Market Winners & Losers: General Mills, Citigroup
David O'Brien
FOXBusiness
Another week of trading started with a boom, but in the wrong direction. The major indices went the way of crude prices -- down -- to finish the day with losses of 1.5% to 2% on average.
Here are some of Monday’s winners and losers:
Winners
SLM Corp. (SLM)
SLM was still riding the wave from last week, which started when the company announced a deal aimed to secure around $1.5 billion in financing. The stock closed up more than 6%, or 65 cents, on Monday, ending at $11.30.
SUPERVALU Inc. (SVU)
The grocery-store owner seems to be a little more secure than believed following the rejection of a rumor that the company is closing a large number of stores. SVU finished the day with 5.77%, or $1.01, increase; it closed the day at $18.51.
Varian Medical Systems Inc. (VAR)
The medical-equipment producer continued to rebound. The stock hit its 52-week low last Thursday and has been on the upswing since. It last traded at $34.06, up nearly 5.5%, or $1.77.
Mylan Inc. (MYL)
The generic-drugs manufacturer started the week with a volatile day, though it finished the day up 36 cents, or more than 3%, to end the session at $11.04.
General Mills Inc. (GIS)
After reaffirming its yearly outlook, GIS’s stock rose $1.74, or 3%, to close at $59.87 on Monday.
Losers
Developers Diversified Realty Corp. (DDR)
Recent ventures into solar haven't yet paid off as the price of crude continues to tumble, driving DDR down $1.62, or more than 21% on the day. Shares closed the day at $6.02.
Hartford Financial Services Group Inc. (HIG)
The financial firm took a big hit today as questions swirl about the future of Smith Barney and Citi. HIG finished the day down 18.6%, closing at $6.02 -- a loss of $1.62 a share.
Citigroup Inc. (C)
This was the first trading session after news broke that Senior Counselor Robert Rubin is leaving the company and that the company is planning to sell its Smith Barney business -- two measures that seemed to underscore growing concerns about the bank's desperation. C dropped another $1.15, or 17% Monday, to end the trading day at $5.60 a share.
XL Capital Ltd. (XL)
The insurance sector on a whole declined after a critical research note from Goldman Sachs. XL was the big loser, down 59 cents, or nearly 14%, to $3.71.
Lincoln National Corp. (LNC)
While bailout money may be in the future of this life insurer, its lack of financial stability continues to hurt stock prices. Shares fell $2.61, or 13%, on the day to finish at $17.49.
FOX Translator
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Not everyone has the financial ability to own and rent out multiple houses for extra income. And even fewer people want to deal with late night calls from tenants crying about their broken oil burner. Well, thanks to real estate investment trusts, or REITs, you don't have to deal with the stresses of being a landlord to make money off of the real estate market.
A REIT is any entity that pools money from a group of investors to buy different kinds of real estate or real-estate-related assets, such as buildings or mortgages on buildings. It uses the income from rent and loan interest to pay out a steady monthly dividend to its investors.
There are three types of REITs. The most common one is an equity REIT, which simply buys buildings and generates revenue from the rent it charges. Mortgage REITs loan out money to owners of real estate for mortgages or buy existing mortgages to collect interest, which is then paid out to the REIT's investors. Finally, there are hybrid REITs, which are a combination of mortgage and equity REITs.
REITs can be public or private. Public REITs are bought and sold just like stocks and are listed on exchanges, while private REITs can only be bought through direct-participation programs. With private REITs, the investors are actually part owners of the real estate rather than just shareholders of the REIT corporation. They can't sell shares and they typically have to keep their money tied up for eight to 12 years. However, there's the benefit of less volatility since the market can influence public REITs.
One potential drawback to REITs is how they are taxed. While qualifying equity dividends are normally subject to only a maximum of 15%, the dividends from REITs are taxed as regular income, which could be much higher -- depending on how much money you make.
