DeVry (DV) Warns, Shares Tank as Enrollments Drop

9:00am (EST)

The bears won their eighth-straight Monday as the market pulled back 1% on renewed Europe worries and a rare earnings miss by McDonald’s (MCD, $88.94, down $2.64) which gets two-thirds of its sales from overseas.

The bears came out growling and cracked support right off the bat as the major indexes were down nearly 2% shortly after the open. The bulls were blindsided but were able to recoup half of the losses before the close as they try to hold down the fort.

The Dow fell 101 points, or 0.8%, to finish at 12,721. The blue-chips traded to a low of 12,583 and slipped under 12,600 before rebounding. The S&P gave back a 12-pack, or 0.9%, to end right on 1,350 after kissing a low of 1,337. The Nasdaq got punished for 35 points, or 1.2%, to settle at 2,890 and traded down to 2,852. The Russell 2000 declined 13 points and closed at 778 and below 780 which has been major support.

There was some action after the bell as well…

DeVry (DV, $27.56, down $0.32) will officially announce their earnings in early August but they warned Wall Street after the close yesterday they would miss current estimates. The company said it expects earnings to come in at 43-46 cents a share on revenue of $500-$510 million. The suit-and-ties had a forecast of 79 cents a share on revenue of $520 million.

DeVry said it will take a $20 million hit to write-down their “Advanced Academics” division and another $7 million restructuring charge after cutting nearly 600 jobs.

Shares were north of $27 before the warning and were south of $22 in extended trading last night.

We have been warning of the $1 trillion student-debt loan bubble and the heavy debt loads “students” have been racking up for a few years now and we have specifically targeted Apollo Group (APOL, $28.92, down $0.46) as a way to play the downside that was coming in this sector. Shares of Apollo were down over 7% and were trading under $27 in extended trading last night.

Futures are showing a lower open and look like this: Dow (-19), S&P 500 (-2), Nasdaq (-1). Subscribers, check the Members Area for the updates.

Comments are closed.

CFTC Disclosure:

GOVERNMENT REGULATIONS REQUIRE DISCLOSURE OF THE FACT THAT WHILE THESE METHODS MAY HAVE WORKED IN THE PAST, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. WHILE THERE IS A POTENTIAL FOR PROFITS THERE IS ALSO A RISK OF LOSS. A LOSS INCURRED IN CONNECTION WITH Momentum Options Trading, LLC CAN BE SIGNIFICANT. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CIRCUMSTANCE. THERE IS SUBSTANTIAL RISK IN TRADING. A LOSS INCURRED IN CONNECTION WITH FUTURES TRADING CAN BE SIGNIFICANT. WE MAKE NO CLAIM REGARDING PAST OR FUTURE PERFORMANCE. WE MERELY TRACK EVERY TRADE AND SHOW THE PERFORMANCE OF ALL TRADES THE SYSTEM OR NEWSLETTER PRODUCES. SIMULATED TRADING IS DIFFERENT THAN TRADING REAL MONEY. HYPOTHETICAL RESULTS ARE NOT REAL RESULTS. PLEASE CONTACT YOUR BROKER ABOUT THE RISK OR TRADING STOCKS, OPTIONS OR FUTURES. ALL COMMUNICATIONS ARE OPINIONS NOT ADVICE.

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

Blog

DeVry (DV) Warns, Shares Tank as Enrollments Drop

CFTC Disclosure: