And yet another day passes without the broad-based S&P 500 (SNPINDEX:^GSPC) hitting a record high. Coming many times well within a few points of its all-time record closing high, the index has been unable to eclipse the mark.
Today, it appeared that the index would have a decent shot after a last-minute bailout was announced in Cyprus that will keep the country from leaving the eurozone and provide it with a much-needed $13 billion bailout. Unfortunately, the bailout itself will involve the winding down of Laiki Bank, the second largest bank in Cyprus, and will require bondholders in Cyprus to pony up a share of the bailout. In addition, all accounts with more than 100,000 euros currently held by Laiki Bank will be frozen and see a 30%-40% tax levy, which is significantly higher than the original 9.9% levy that was proposed last week.
All told, the markets are concerned that this deal could destabilize the euro and give other troubled EU nations the idea to enact tax levies against large deposit holders. For the day, the S&P 500 finished lower by 5.20 points (-0.33%) to close at 1,551.69 after initially opening higher.
Today’s biggest gainer by a mile was for-profit educator Apollo Group (NASDAQ:APOL), which tacked on 7.1% after reporting better-than-expected second-quarter results. For the quarter, Apollo netted an adjusted profit of $0.34 per share on $834.4 million in revenue, which crushed the Wall Street expectation of just $0.18 in EPS and $822.8 million in revenue. Before you get too excited, keep in mind that these figures were delivered on top of a 15.5% decline in enrollments at the University of Phoenix and the prospect of higher marketing expenses to drive enrollment. While a nice surprise for shareholders, I still think little sustainability exists in for-profit educators’ earnings until the U.S. government stops hovering over the sector.
Iron ore pellet and metallurgical coal producer Cliffs Natural Resources (NYSE:CLF) also put up a good showing, rising 4.3%. While no specific news moved the company higher today, rumors last week that the miner could make an attractive takeover target seem to have stuck around. Even with the hefty dividend cut, Cliffs still yields an attractive 2.9%, and a rebound in heavy construction in China should only help to boost exports of both iron ore and metallurgical coal. As long as Cliffs can keep its costs under control -- and I don’t see a problem there -- it could become one of the best performers from this point onward.
Finally, embattled PC-maker Dell (UNKNOWN:UNKNOWN) advanced by 2.6% after receiving additional bids for the company from Blackstone Group (NYSE:BX) and Carl Icahn. According to reports, Blackstone would be willing to pay in excess of $14.25 per share for Dell, and Carl Icahn would be willing to pay $15 per share for 58% ownership in the company. From a monetary perspective, both offers are clearly superior to Silver Lake Partners’ $13.65 bid and could put current CEO and founder Michael Dell on the outside looking in when all is said and done. As a shareholder in Dell, I could stand behind a complete purchase by Blackstone in the $14.25-$15 range and am glad to see Icahn now scrapping the idea that Dell pay an exorbitant $9-per-share dividend.