It seems as if the financial crisis in Greece and the economic slowdown in China have started to have an effect on the U.S. stock markets. The shares of General Motors Company (NYSE:GM), Sprint Corp (NYSE:S), and MGM Resorts International (NYSE:MGM) all declined heavily in the morning trading session, all three of which have various exposure or reliance on the Chinese market. MGM Resorts was the worst affected of all of these stocks, witnessing a 7.82% drop in share prices.
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General Motors Company (NYSE:GM) started the day poorly right from the start, and is down by 5.17% nearing the end of trading today. The shares of the best-selling global car manufacturer in 2014 were trading at $31.30, falling below its 2010 IPO price of $33. In addition to its exposure to China, another reason for the decline included today’s announced recall of 196,000 Hummer SUVs by the company. According to the automaker, the company was able to detect a fault in the motor controls of the ventilation fans of Hummer vehicles. General Motors Company (NYSE:GM) added that the controls overheat during long duration usage, increasing the risk of melting of the plastic controls, or even a potential fire. Nearly 165,000 recalled Hummer vehicles are operational in the United States only. This recall may have drummed up negative sentiment among investors, who are barely able to forget the recall notices issued by the automaker on 29 million vehicles last year. General Motors Company (NYSE:GM) enjoyed positive hedge fund sentiment at the end of the first quarter however, with 103 hedge funds in our database holding cumulative investments of $6.74 billion against holdings of $6.07 billion from 107 hedge funds at the end of 2014. It was among the five most popular automaker stock picks of hedge fund investors tracked by Insider Monkey in the first quarter, with Warren Buffett holding $1.54 billion in the company’s shares, owning 41.00 million of them.
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Another company falling in the footsteps of General Motors during today’s trading session was Sprint Corp (NYSE:S), as its shares are down by 7.91%. According to a recent report from Strategy Analytics Inc, a business analysis firm, Sprint is likely to slip down to the fourth spot in terms of the number of subscribers through 2020. The analytics company said that T-Mobile US Inc (NYSE:TMUS) is likely to become the third-largest wireless network in the country considering its close competition with Sprint. T-Mobile reported 56.8 million subscribers at the end of the March against Sprint Corp (NYSE:S)’s 57.1 million subscribers. However, the third-largest wireless carrier is making efforts to increase its subscribers with plans like an “All-In” deal for $80 per month, which offers unlimited calling, texting, and data. The shares of Sprint Corp (NYSE:S) are down by 0.97% year-to-date and smart money has a bearish outlook towards its shares. The number of investors holding investments in the wireless carrier was down by four to 23 during the first quarter, with aggregate investments of $498.25 million, which was lower than the previous quarter’s investments of $561.97 million. William B. Gray’s Orbis Investment Management was among the primary investors of Sprint, with 69.98 million shares valued at $331.71 million.
The shares of MGM Resorts International (NYSE:MGM) are trading at $17.55, close to their 52-week low of $17.25. The aforementioned 7.82% decline comes a day after Credit Suisse upgraded the shares of the gaming and resort company stating that the “worst is over” for the Macau Gaming sector, which is heavily reliant on Chinese tourism. The weakness in Macau in the current financial year has pushed the shares of MGM Resorts International (NYSE:MGM) 18% lower year-to-date. Barclays included the hotel company in its recent list of Americas Top Picks List for 2015, under retail stock picks. The smart money also has a positive outlook on the shares of MGM Resorts, with 58 hedge fund managers holding cumulative investments of $1.76 billion at the end of the first quarter against prior quarter investments of $1.45 billion held by 45 hedge fund investors. James Dinan’s York Capital Management held the largest stake in MGM Resorts International (NYSE:MGM) at the end of the first quarter, of 9.94 million shares valued at $209.09 million.
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