Even the Agriculture Stocks are Dropping!
Monsanto and John Deere have been leading the Yonder 40, the stock market index for rural America. Last week, even these companies cratered.
Now we know the stock market is seriously hurting.
This week, the agriculture stocks took a hit. Yep, the seed, chemical and machinery purveyors who had such a ridiculously good 2007 all took it in the face this past week. The ag stocks in the Yonder 40, DY's index of stocks that reflect the rural economy, all dropped with loud plunks in the last week. Monsanto was off by 12 percent. Deere was off by 14.4 percent. ConAgra was off by 6 percent.
Of course, Monsanto was up 112 percent in 2007, so the stock is not exactly suffering a terminal illness. Deere is still up more than 26 percent since July 1. (Deere CEO Robert Lane reported receiving $52.4 million in total compensation last year, which included $31.9 million in stock options he exercised.) But the ag sector was hurting.
The Wall Street Journal reported there were several causes for the ag stock turndown. A slowing economy could temper demand for oil — and for ethanol. All the ag stocks have been rising with the demand for grains. And last week, grain grain prices dipped. Both wheat and corn prices dropped slightly last week.
But, really, the whole market has been a dismal picture since the beginning of the year. Last week was particularly bad. The Yonder 40 average was down about 4 percent. So was the Dow Industrials and the NASDAQ. The S&P 500, a broader index, was off 5.4 percent last week alone.
The Yonder 40 is now almost 14 percent below its price on July 1.
There was other news among the companies that make up the Yonder 40.
“¢ Those who go to Six Flags amusement parks will be eating Tyson chicken. Tyson signed a deal with the amusement park operator making the company the exclusive chicken provider for all of the Six Flags' US parks.
“¢ There's speculation that Altria (owner of Philip Morris) could buy the smokeless tobacco company UST Inc., a Yonder 40 member.
“¢ Subprime woes have increased Regions Financial refinancing business. The Birmingham, Alabama, regional bank says its refinancing business is up nearly 45 percent since October.
“¢ Berkshire Hathaway (a Yonder 40 member) has increased its stake again in Burlington Northern Santa Fe Corp. (another Yonder 40 member). Warren Buffett's company purchased $73.8 million of the railroad company's stock.
“¢ Turnabout is fair play. Tiffany & Co. (the fine jewelry seller and definitely not a member of the Yonder 40) had been a high-flier last year, but it dropped this week. Family Dollar Stores (the five and dime member of the Yonder 40) had declined 20 percent last year, but this week it was up more than 11 percent, rising while Tiffany fell.
Here is the complete listing of the Yonder 40:
|Companies||Ticker||Price January 18||Price Change for Week||Percent Change for Week|
|Burlington Northern Santa Fe Corp.||BNI||76.93||-$1.18||-1.5%|
|Peabody Energy Corp.||BTU||49.35||-$6.09||-11.0%|
|ConAgra Foods Inc.||CAG||22.31||-$1.37||-5.8%|
|Cato Corp. Cl A||CTR||13.69||$0.16||1.2%|
|Deere & Co.||DE||76.4||-$12.86||-14.4%|
|Dean Foods Co.||DF||26.97||$2.00||8.0%|
|Family Dollar Stores Inc.||FDO||17.69||$1.79||11.3%|
|Fleetwood Enterprises Inc.||FLE||4.78||-$0.35||-6.8%|
|Gaylord Entertainment Co.||GET||27.33||-$4.28||-13.5%|
|International Speedway Corp.||ISCA||39.21||-$1.22||-3.0%|
|Mohawk Industries Inc.||MHK||66.14||-$3.87||-5.5%|
|Mine Safety Appliances Co.||MSA||44.73||-$3.75||-7.7%|
|Plum Creek Timber REIT||PCL||39.59||-$1.37||-3.3%|
|Penn Virginia Corp.||PVA||42.65||-$1.27||-2.9%|
|Regions Financial Corp.||RF||19.19||-$1.28||-6.3%|
|Sturm Ruger & Co.||RGR||8.1||$0.40||5.2%|
|Stage Stores Inc.||SSI||10.51||-$0.49||-4.5%|
|Tractor Supply Co.||TSCO||29.49||-$1.05||-3.4%|
|Waddell & Reed Financial Inc.||WDR||29.9||-$2.58||-7.9%|