NEW YORK (AP) - Shares of staffing companies fell sharply Wednesday after a
BMO Capital Markets analyst downgraded the sector to "Market Perform," based in
part on a gloomy 2008 outlook.
Comsys IT Partners Inc. shares fared the worst, falling $2.30, or 14.6
percent, to $13.48. The stock has traded between $11.60 and $25.36 in the past
52 weeks.
The sector's results for the day echoed the broader markets, which were down
as investors worried about economic uncertainty reflected in a manufacturing
report, and the price of oil briefly rose above $100 a barrel.
"The combination of sluggish near-term operating performance for staffing
providers and continued negative sentiment regarding the near-term direction of
the U.S. economy will likely limit any outperformance for staffing stocks in the
immediate future," wrote BMO analyst Jeffrey Silber in a note to investors
Wednesday.
Silber cut the ratings, estimates and target prices on Comsys, Manpower and
Robert Half International.
Admitting the rating cuts were long overdue, Silber said new data from BMO's
recently completed annual staffing survey revealed a number of red flags. Only
37 percent of survey respondents experienced intraquarter sales growth in the
fourth quarter, while 30 percent reported net income growth, the lowest levels
since 2003. And expectations for sequential increases for annual growth in sales
and income in the first quarter of 2008 were among the lowest in survey history,
Silber said.
Here's how some staffing stocks performed in Wednesday's session:
Manpower shares tumbled $1.85, or 3.3 percent, to $55.05, after hitting a
new 52-week low of $52.01 earlier in the session.
Robert Half shares dropped $1.53, or 5.7 percent, to $25.51.
Bearingpoint Inc. fell 7 cents, or 2.5 percent, to $2.76.
Monster Worldwide Inc. slid 77 cents, or 2.4 percent, to $31.63.
MPS Group Inc. lost 70 cents, or 6.4 percent, to $10.24.
Korn Ferry International fell 60 cents, or 3.2 percent, to $18.22.
Resources Connection Inc. gave up 61 cents, or 3.4 percent, to $17.55.
Bucking the trend, Administaff Inc. gained $1.06, or 3.8 percent, to $29.34.
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