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More Disappointment for IPOs

Malaysia joined India, Australia, and Singapore in hiking interest rates, this time a quarter point to 2.5 percent.

European markets slightly higher, but Spain down 1.6 percent. Asia closed higher.

IPO's take another shot—and fail. The entire market is repricing risk, and IPOs are showing that stress.

Last week was a mess for IPOs, and that continues this week.

a) Express, the apparel maker, priced 16 million shares at $17, BELOW price talk of $18-$20. It is 75 percent owned by private equity firm Golden Gate, before that was controlled by Limited (LTD)

b) Road Runner Transportation , a transportation/logistic services company, priced 10.6 million shares at $14, at THE LOW END of the range of $14-$16.

c) Aluminum maker Noranda Aluminum DID NOT GET PRICED. It CUT its expected offering to 10 million shares (from 16.6 million) to $8-$9 per share (from $14-$16). That is a drop from an expected $250 million raise (at the midpoint of $15) to about $85 million (from the midpoint of $8.50). This is an Apollo Management private equity deal, which took them over in 2007. Not clear if this will price tonight, looks more likely next week.

What this is telling you: valuations are too high.

Yesterday Niska Gas, an energy master limited partnership (MLP), ended down 7 percent on its first day of trading. Priced 17.5 million shares at $20.25 (below price talk), opened at $19.50, closed at $19.10. THAT is a mispriced deal.

Elsewhere:

1) Kohl's falls 2 percent as guidance disappointed. The department store's Q1 results topped expectations ($0.64 vs. $0.62) on a 7.4 percent rise in comps and improving margins. However, earnings guidance for Q2 and the full year remained very cautious - each falling below the Street's consensus estimates (Q2: $0.70-$0.75 vs. $0.88 consensus).

2) Wendy's/Arby's falls 4 percent, despite beating earnings estimates by a penny as strength at its Wendy's fast-food restaurants masked troubling results at its Arby's chain. Wendy's saw a 0.8 percent RISE in same-store sales and a 4.3 percentage point INCREASE in margins. That starkly contrasted with a 12 percent DECLINE in comps and a 3.4 percentage point DECREASE in margins.

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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