Akeena Solar's (AKNS) shares should benefit from top line growth of its solar power system integration business, driven by increasing exposure in key markets and additional acquisitions, Merriman Curhan Ford & Co. says; starts AKNS at buy.
Firm says AKNS is positioned to generate high margin recurring revenue through licensing of its Andalay solar panel racking system, which could expand gross margins beyond average integration margins of 20% and lower solar power installation costs; adds US expansion could allow AKNS to double its revenue in FY08.
Wednesday, March 26, 2008
Clear Channel Deal in Jeopardy...
The planned $19 billion privatization of the nation's largest radio broadcaster looks increasingly likely to fall through as the private-equity firms and banks backing the transaction failed to resolve their differences over final financing terms.
Tuesday, March 25, 2008
Tuesday's Summary....
U.S. Markets
Dow -16.04 (-0.13%)
Nasdaq +14.30 (+0.61%)
S&P 500 +3.11 (-0.23%)
News That Moved the Market
Mixed Day After Weak Consumer Confidence Reading. Markets ended the day mostly flat despite some weak economic data. A little after the opening bell, the Conference Board announced that Consumer Confidence hit a 5-year low this month, coming in at 64.5. Economists were expecting a reading of 73.5. In addition, the S&P/Case-Shiller Home Price Index showed a 10.7% drop in prices, the largest drop in the index's history. Despite the bleak data, sellers were unable to keep control, and eventually a broad-based recovery pushed indices back to even. All sectors eventually finished with gains.
Clear Channel Deal Near Collapse. Late in the day, The Wall Street Journal Reported the Clear Channel (CCU, -5.5% day; -20.9% A.H.) $19 billion sale to Bain Capital and Thomas H. Lee Partners is in real danger of falling through. The deal was scheduled to close this week, but lenders, who are struggling through a tight credit market, are not comfortable with the agreement and may pull out.
Monsanto Shares Sprout. Monsanto (MON, +9.9%) increased its earnings estimates for 2008 to $3.38-$3.48/share, well ahead of the $2.87/share analyst were expecting. "Our growth over the next five years will be built on our seeds-and-traits platform, and we've already exceeded a number of milestones that put us ahead of our plan to deliver consistent, sustainable growth," Chairman Hugh Grant said.
Quick Tics:
Merrill Lynch (MER, -1.1%) downgraded Banc of America (BAC, -3.5%) to "Sell" from "Neutral"…
Tech Stocks outperformed the market, getting a boost from Citi's (C, +0.6%) upgrade of Yahoo (YHOO, +4.4%) to a "Buy" rating…
the S&P 500 is up 7.4% since last Monday.
Tomorrow Notable Earnings
Deutsche Bank (DB) Time Not Supplied
Oracle (ORCL) After Close
Economic Events:
8:30 AM: Durable Goods Orders
10:00 AM: New Home Sales
10:30 AM: Crude Inventories
Dow -16.04 (-0.13%)
Nasdaq +14.30 (+0.61%)
S&P 500 +3.11 (-0.23%)
News That Moved the Market
Mixed Day After Weak Consumer Confidence Reading. Markets ended the day mostly flat despite some weak economic data. A little after the opening bell, the Conference Board announced that Consumer Confidence hit a 5-year low this month, coming in at 64.5. Economists were expecting a reading of 73.5. In addition, the S&P/Case-Shiller Home Price Index showed a 10.7% drop in prices, the largest drop in the index's history. Despite the bleak data, sellers were unable to keep control, and eventually a broad-based recovery pushed indices back to even. All sectors eventually finished with gains.
Clear Channel Deal Near Collapse. Late in the day, The Wall Street Journal Reported the Clear Channel (CCU, -5.5% day; -20.9% A.H.) $19 billion sale to Bain Capital and Thomas H. Lee Partners is in real danger of falling through. The deal was scheduled to close this week, but lenders, who are struggling through a tight credit market, are not comfortable with the agreement and may pull out.
Monsanto Shares Sprout. Monsanto (MON, +9.9%) increased its earnings estimates for 2008 to $3.38-$3.48/share, well ahead of the $2.87/share analyst were expecting. "Our growth over the next five years will be built on our seeds-and-traits platform, and we've already exceeded a number of milestones that put us ahead of our plan to deliver consistent, sustainable growth," Chairman Hugh Grant said.
Quick Tics:
Merrill Lynch (MER, -1.1%) downgraded Banc of America (BAC, -3.5%) to "Sell" from "Neutral"…
Tech Stocks outperformed the market, getting a boost from Citi's (C, +0.6%) upgrade of Yahoo (YHOO, +4.4%) to a "Buy" rating…
the S&P 500 is up 7.4% since last Monday.
Tomorrow Notable Earnings
Deutsche Bank (DB) Time Not Supplied
Oracle (ORCL) After Close
Economic Events:
8:30 AM: Durable Goods Orders
10:00 AM: New Home Sales
10:30 AM: Crude Inventories
Weakness Seen at Harley...
Soleil analysts say traffic at Harley-Davidson (HOG) stores has been down for several months, leading them to believe management's 2008 guidance is "too optimistic."
UBS Lowers Google's Price Target...
UBS still sees "many mid-to-longer-term positive potential catalysts" for Google (GOOG), but cuts revenue, margin and EPS estimates, saying Street views don't "adequately reflect decelerating volume growth" in its paid clicks ad business. Firm cuts price target to $570.
The stock closed yesterday at $460.
So, let me get this straight.....They still expect the stock to go up $110 points or 25% in the next 12 months....and I'm sure the stock will take a hit today....
The stock closed yesterday at $460.
So, let me get this straight.....They still expect the stock to go up $110 points or 25% in the next 12 months....and I'm sure the stock will take a hit today....
Monsanto Raises Guidance....
Monsanto Co. (MON) Tuesday raised its fiscal 2008earnings guidance to $3.15 to $3.25 a share from its previously-issued view of$2.70 to $2.80 a share. For the second quarter, the company forecast earnings of $1.75 a share. The mean estimate of analysts polled by Thomson Financial is for 2008earnings of $2.87 a share and second-quarter earnings of $1.35 a share.
Monsanto expects as-reported earnings of $3.38 to $3.48 a share, including a22 cent settlement gain, for 2008 and as-reported earnings of $1.98 a share,including a 23 cent settlement gain, for the second quarter.
In addition, Monsanto said it now expects free cash flow of about $1.4billion for 2008, up from its prior guidance of $900 million to $1 billion. Thecompany expects net cash provided by operating activities of $2.45 billion, andnet cash required by investing activities of about $1.05 billion for 2008.
"Leading corn market share positions, accelerated biotechnology traitpenetration and new value generated by Roundup and other glyphosate-basedherbicides have led Monsanto Company to well exceed its expectations forsecond-quarter results and to raise its full-year guidance for ongoingearnings-per-share and free cash flow," the company said.
Ag stocks are flying premarket as a result......
Monsanto expects as-reported earnings of $3.38 to $3.48 a share, including a22 cent settlement gain, for 2008 and as-reported earnings of $1.98 a share,including a 23 cent settlement gain, for the second quarter.
In addition, Monsanto said it now expects free cash flow of about $1.4billion for 2008, up from its prior guidance of $900 million to $1 billion. Thecompany expects net cash provided by operating activities of $2.45 billion, andnet cash required by investing activities of about $1.05 billion for 2008.
"Leading corn market share positions, accelerated biotechnology traitpenetration and new value generated by Roundup and other glyphosate-basedherbicides have led Monsanto Company to well exceed its expectations forsecond-quarter results and to raise its full-year guidance for ongoingearnings-per-share and free cash flow," the company said.
Ag stocks are flying premarket as a result......
Earnings Due Today....
COMPANIES REPORTING EARNINGS
• Fortress Investment Group (FIG). Expected to report Q4 earnings of $0.17 per share, according to analysts polled by Thomson Financial.
• Jabil Circuit Inc. (JBL). Expected to post Q2 earnings of $0.18 per share, up 27.86% from the same quarter last year when the company earned $0.14 a share.
• Fortress Investment Group (FIG). Expected to report Q4 earnings of $0.17 per share, according to analysts polled by Thomson Financial.
• Jabil Circuit Inc. (JBL). Expected to post Q2 earnings of $0.18 per share, up 27.86% from the same quarter last year when the company earned $0.14 a share.
Today's Top Stories....
TOP STORIES
• Bank of America cut to 'sell' from 'neutral' at Merrill Lynch
• Goldman Sachs in talks for stake in British hedge fund Trafalgar - report
• Yahoo raised to 'buy' at Citi, tgt hiked to $34
• Capital One Financial cut to 'underperform' at Friedman, Billings, Ramsey
• Public Storage cut to 'neutral' from 'buy' at Banc of America
• Frontline shares jump in Oslo on possible bid for Overseas Shipholding
• Tiffany cut to 'perform' from 'outperform' at Oppenheimer
• D.R. Horton upgraded to 'strong buy' from 'mkt outperform' at JMP Sec.
• Global Payments, Planet Payment tie up for 'Pay in Your Currency' in China
• BHP Billiton resumes work at Neptune facility in Gulf of Mexico
• Bank of America cut to 'sell' from 'neutral' at Merrill Lynch
• Goldman Sachs in talks for stake in British hedge fund Trafalgar - report
• Yahoo raised to 'buy' at Citi, tgt hiked to $34
• Capital One Financial cut to 'underperform' at Friedman, Billings, Ramsey
• Public Storage cut to 'neutral' from 'buy' at Banc of America
• Frontline shares jump in Oslo on possible bid for Overseas Shipholding
• Tiffany cut to 'perform' from 'outperform' at Oppenheimer
• D.R. Horton upgraded to 'strong buy' from 'mkt outperform' at JMP Sec.
• Global Payments, Planet Payment tie up for 'Pay in Your Currency' in China
• BHP Billiton resumes work at Neptune facility in Gulf of Mexico
Looking for a Natural Gas Play???
Chesapeake energizes outlook. Natural gas company Chesapeake Energy (CHK) boosted its production outlook for 2008-9, citing higher recovery expectations and increased drilling activity. It also announced a new discovery in Louisiana that could benefit the company more than any other play to date. CHK will move from 4 to 10 rigs by year-end and add more in 2009.
To facilitate additional drilling, it will increase capital expenditure by $275 million and $675 million for 2008 and 2009. In a departure, it said it is now developing four oil projects. A note of caution from energy analyst David Heikkinen: "Whenever we hear an increase in activity levels by the largest North American driller, that ought to bear a bit of cauti on for the gas markets."
To facilitate additional drilling, it will increase capital expenditure by $275 million and $675 million for 2008 and 2009. In a departure, it said it is now developing four oil projects. A note of caution from energy analyst David Heikkinen: "Whenever we hear an increase in activity levels by the largest North American driller, that ought to bear a bit of cauti on for the gas markets."
Phillips Van Heusen Beats but Guides Lower...
Phillips-Van Heusen Corp. late Mondayreported fourth-quarter net earnings of $30.3 million, or 55 cents a share,above the 53-cent mean estimate of analysts polled by Thomson Financial. Net income in the year-earlier quarter was $26.8 million, or 47 cents ashare.
Revenue for the quarter ended Feb. 3 rose to $507 million from $487.6million a year earlier, versus the mean Street view of $587.5 million. Excluding the impact of the retail calendar shift and the extra week ofrevenue, revenue growth in the quarter would have been 20%, the New York-basedapparel and accessories company said. Phillips-Van Heusen expects first-quarter earnings per share of 86 cents to88 cents on revenue of around $615 million to $625 million.
The company sees a full-year per-share profit of $3.30 to $3.40 on revenueof about $2.6 billion. The mean analyst estimate is for first-quarter earnings 89 cents on revenueof $620.7 million and fiscal 2008 earnings of $3.47 on revenue of $2.43 billion.
Revenue for the quarter ended Feb. 3 rose to $507 million from $487.6million a year earlier, versus the mean Street view of $587.5 million. Excluding the impact of the retail calendar shift and the extra week ofrevenue, revenue growth in the quarter would have been 20%, the New York-basedapparel and accessories company said. Phillips-Van Heusen expects first-quarter earnings per share of 86 cents to88 cents on revenue of around $615 million to $625 million.
The company sees a full-year per-share profit of $3.30 to $3.40 on revenueof about $2.6 billion. The mean analyst estimate is for first-quarter earnings 89 cents on revenueof $620.7 million and fiscal 2008 earnings of $3.47 on revenue of $2.43 billion.
Comverse Technology Receives Wells Notice...
Comverse Technology Inc. said lateMonday it has received a "Wells notice" from the Securities and ExchangeCommission, notifying Comverse that the SEC staff plans to recommend that theagency bring a civil action against the company. New York-based Comvere said the Wells notice relates to the SEC'sinvestigation of Comverse's past stock option grant practices and certainunrelated accounting matters.
Comverse will have the opportunity to respond before the staff makes aformal recommendation to the SEC regarding what action, if any, should bebrought.
Comverse will have the opportunity to respond before the staff makes aformal recommendation to the SEC regarding what action, if any, should bebrought.
Valero Projects a Miss...
Valero Energy, which in January saw improving refining market conditions, projects 1Q per-share earnings well below analyst estimates amid tight margins and outages at several plants. Shares fall 5% late.
Tata Motors Buys Jaguar and Land Rover....
Tata Motors, India's biggest automaker, buys Ford Motor 's Jaguar and Land Rover luxury brands for $2.65 billion, according to reports from an Indian television channel. Tata Motors will sign a deal in London later today.
Monday, March 24, 2008
Monday's Trading Summary...
U.S. Markets
Dow +187.32 (+1.52%)
Nasdaq +68.64 (+3.04%)
S&P 500 +20.37 (+1.53%)
News That Moved the Market
Markets Jump After J.P. Morgan Ups Bid. Bear Stearns (BSC, +88.8%) nearly doubled in trading today on news that J.P. Morgan (JPM, +1.3%) increased its bid for the troubled bank to $10/share from $2/share, pushing the new purchase price for the Bear to over $1 billion. The new version of the deal also stipulates that J.P. Morgan will be responsible for the first $1 billion in losses associated with its purchase of Bear assets, while the Fed will fund another $29 billion. J.P. Morgan also will buy 40% of Bear stock without a shareholder vote, making it extremely difficult for anyone to block the takeover. The markets rallied sharply right after the news broke, as many took this as a further sign that financials may have turned a corner. The financial sector was up as much as 3.4% today, before losing steam at the end of the day to finish up 0.7%.
XM and Sirius Merger Get DOJ's Approval. Sirius Satellite Radio's (SIRI, +8.6%) $4.59 billion bid for XM Satellite Radio (XMSR, +15.5%) was approved by the U.S. Department of Justice, after the DOJ concluded broadcast radio and MP3 Players provided enough competition to avoid anti-trust issues. The satellite radio companies are now waiting for a decision from the Federal Communication Commission.
Existing Homes Sales Increase 2.9%. Existing home sales unexpectedly increased to an adjusted annual rate of 5.03 million. The figure was well ahead of the 4.85 million economists were anticipating. Inventories fell to 9.6 months, the lowest level since August. Median home prices were down 8% from last year.
Quick Tics:
Tiffany & Co. (TIF, +10.5%) enjoyed its best gain in 7 years after a better than expected earnings report…
The Federal Housing Finance Board authorized Federal Home Loan Banks to double their purchases of mortgage backed securities.
Tomorrow Notable Earnings
Jabil Circuit, Inc. (JBL) After Close
Economic Events:
10:00 AM: Consumer Confidence
Dow +187.32 (+1.52%)
Nasdaq +68.64 (+3.04%)
S&P 500 +20.37 (+1.53%)
News That Moved the Market
Markets Jump After J.P. Morgan Ups Bid. Bear Stearns (BSC, +88.8%) nearly doubled in trading today on news that J.P. Morgan (JPM, +1.3%) increased its bid for the troubled bank to $10/share from $2/share, pushing the new purchase price for the Bear to over $1 billion. The new version of the deal also stipulates that J.P. Morgan will be responsible for the first $1 billion in losses associated with its purchase of Bear assets, while the Fed will fund another $29 billion. J.P. Morgan also will buy 40% of Bear stock without a shareholder vote, making it extremely difficult for anyone to block the takeover. The markets rallied sharply right after the news broke, as many took this as a further sign that financials may have turned a corner. The financial sector was up as much as 3.4% today, before losing steam at the end of the day to finish up 0.7%.
XM and Sirius Merger Get DOJ's Approval. Sirius Satellite Radio's (SIRI, +8.6%) $4.59 billion bid for XM Satellite Radio (XMSR, +15.5%) was approved by the U.S. Department of Justice, after the DOJ concluded broadcast radio and MP3 Players provided enough competition to avoid anti-trust issues. The satellite radio companies are now waiting for a decision from the Federal Communication Commission.
Existing Homes Sales Increase 2.9%. Existing home sales unexpectedly increased to an adjusted annual rate of 5.03 million. The figure was well ahead of the 4.85 million economists were anticipating. Inventories fell to 9.6 months, the lowest level since August. Median home prices were down 8% from last year.
Quick Tics:
Tiffany & Co. (TIF, +10.5%) enjoyed its best gain in 7 years after a better than expected earnings report…
The Federal Housing Finance Board authorized Federal Home Loan Banks to double their purchases of mortgage backed securities.
Tomorrow Notable Earnings
Jabil Circuit, Inc. (JBL) After Close
Economic Events:
10:00 AM: Consumer Confidence
WalMart Breaking out!!!
I thought we were in a recession....
Wal-Mart (WMT) is currently up .56 to $53.79.
The stock has been flying since last Wednesday. It is hitting 4 year highs as we speak.
Wal-Mart (WMT) is currently up .56 to $53.79.
The stock has been flying since last Wednesday. It is hitting 4 year highs as we speak.
Technical Alert: ISRG
Intuitive Surgical (ISRG) is up 27 to $327.70.
The stock is breaking higher out of a classic "cup and handle" formation. It has some resistance at $335, after that it's off to the races.
ISRG reports earnings on April 17. They have already guided higher on that earnings number. The stock also moved up to #1 on the Top 100 stocks list put out weekly by Investor's Business Daily.
The stock is breaking higher out of a classic "cup and handle" formation. It has some resistance at $335, after that it's off to the races.
ISRG reports earnings on April 17. They have already guided higher on that earnings number. The stock also moved up to #1 on the Top 100 stocks list put out weekly by Investor's Business Daily.
Walgreen's Net Income Rises 5.2%..
Walgreen's (WAG) - Drug store operator's 2Q net income increases to $685.9 million, or 69¢ a share, amid an 11.1% increase in prescription drug sales. Revenue rises 10% to $15.39 billion, while total same-store sales increase 4.7%. Shares rise 3% pre-market.
Average Wall Street Bonus Drops 1.6%...
Despite the massive write-downs, subprime mess and credit crunch seeping out of Wall Street the average bonus fell only 1.6% in 2007, according to a survey by WallStreetComps.com. The average was $344,683, down from $350,349 in 2006.
That's it???
That's it???
JP Morgan to Boost Bid for Bear Stearns???
JPMorgan (JPM) CEO Jamie Dimon is in talks for a $10/share deal that would quintuple its original $2/share offer for Bear Stearns (BSC). Dimon hopes the move will placate angry shareholders, who vowed to fight the original deal. The Fed is balking at the price, because it doesn't want the public to perceive the deal as a bailout. Bear's board also moved to authorize a 39.5% stake sale to JP Morgan, which would give it an upper hand in gaining majority shareholder approval. Dimon may also be motivated by a need to change the original agreement, which inadvertently left JPM on the hook for Bear losses even if the deal fails.
Thursday, March 20, 2008
This Market is a Little Schizophrenic....
U.S. Markets
Dow +261.66 (+2.16%)
Nasdaq +48.15 (+2.18%)
S&P 500 +31.09 (+2.39%)
News That Moved the Market
Good Thursday. We will not know for at least a couple days if this is simply a bear market rally or an indication that markets actually hit a bottom last week, but it would be difficult to deny the market looked strong today. On solid volume, stocks were bid up throughout the day, helped by more good news coming out of the financial sector. Fannie Mae (FNM, +11.5%) and Freddie Mac (FRE, +9.0%) were upgraded to Outperform from Market Perform at Keefe, Bruyette & Woods. The Fed also announced it has expanded acceptable collateral for its auction of Treasuries to include collateralized mortgage obligations (CMOs) and AAA rated commercial mortgage-backed securities. The Fed will basi cally be exchanging highly liquid Treasuries for illiquid assets. The first auction will take place March 27th, with an offering of $75 billion for a term of 28 days.
Commodities Slide. With the U.S. dollar showing some strength, most commodities fell for the second day in a row. Crude traded below $100/barrel during the session before closing down $0.70 to $101.84. Gold fell $25.30 to $912.22/ounce.
Investors Jump Out of CIT. CIT Group (CIT, -17.2%), the largest commercial finance company in the U.S., was forced to tap its $7.3 billion credit line to repay debt. After a ratings downgrade, the company was unable to raise funds through commercial paper. CEO Jeffrey Peek said the CIT may be forced to sell assets and is looking for a "strategic funding partner."
Quick Tics:
The Philly Fed, a leading manufacturing indicator, came in at -17.1, a better than expected reading…
G.E. (GE, +5.3%) received an upgrade to "Buy" from "Hold" from Merrill Lynch (MER, +13.0%)...
Citigroup (C, +10.2%) will layoff 2,000 investment bankers and traders.
Markets Closed Tomorrow For Good Friday.
Dow +261.66 (+2.16%)
Nasdaq +48.15 (+2.18%)
S&P 500 +31.09 (+2.39%)
News That Moved the Market
Good Thursday. We will not know for at least a couple days if this is simply a bear market rally or an indication that markets actually hit a bottom last week, but it would be difficult to deny the market looked strong today. On solid volume, stocks were bid up throughout the day, helped by more good news coming out of the financial sector. Fannie Mae (FNM, +11.5%) and Freddie Mac (FRE, +9.0%) were upgraded to Outperform from Market Perform at Keefe, Bruyette & Woods. The Fed also announced it has expanded acceptable collateral for its auction of Treasuries to include collateralized mortgage obligations (CMOs) and AAA rated commercial mortgage-backed securities. The Fed will basi cally be exchanging highly liquid Treasuries for illiquid assets. The first auction will take place March 27th, with an offering of $75 billion for a term of 28 days.
Commodities Slide. With the U.S. dollar showing some strength, most commodities fell for the second day in a row. Crude traded below $100/barrel during the session before closing down $0.70 to $101.84. Gold fell $25.30 to $912.22/ounce.
Investors Jump Out of CIT. CIT Group (CIT, -17.2%), the largest commercial finance company in the U.S., was forced to tap its $7.3 billion credit line to repay debt. After a ratings downgrade, the company was unable to raise funds through commercial paper. CEO Jeffrey Peek said the CIT may be forced to sell assets and is looking for a "strategic funding partner."
Quick Tics:
The Philly Fed, a leading manufacturing indicator, came in at -17.1, a better than expected reading…
G.E. (GE, +5.3%) received an upgrade to "Buy" from "Hold" from Merrill Lynch (MER, +13.0%)...
Citigroup (C, +10.2%) will layoff 2,000 investment bankers and traders.
Markets Closed Tomorrow For Good Friday.
Today's Upgrades...
Morgan Stanley (MS) by Punk, Ziegel & Co
Rent-A-Center (RCII) by Stifel Nicolaus
Abbott Labs (ABT) by Wachovia
Global Industries (GLBL) by CapitalOne southcoast
TeleTech (TTEC) by Wachovia
Netflix (NFLX) by Cantor Fitzgerald
Zimmer Hldgs (ZMH) by Lehman Brothers
Fannie Mae (FNM) by Keefe Bruyette
Freddie Mac (FRE) by Keefe Bruyette
Rent-A-Center (RCII) by Stifel Nicolaus
Abbott Labs (ABT) by Wachovia
Global Industries (GLBL) by CapitalOne southcoast
TeleTech (TTEC) by Wachovia
Netflix (NFLX) by Cantor Fitzgerald
Zimmer Hldgs (ZMH) by Lehman Brothers
Fannie Mae (FNM) by Keefe Bruyette
Freddie Mac (FRE) by Keefe Bruyette
What was that Yesterday???
Apparently, we saw a panic selloff yesterday by hedge funds that are heavily leveraged in the commodity market. The selloff was so severe, it took down the rest of the market. The panic was started by the strengthening of the Dollar. Most of the commodity play has been tied to weakness in the Dollar. A stronger Dollar, though positive for the rest of the market, will undoubtedly cause a mass exodus out of Oil, Gold, Metals, Wheat and anything that has to do with those.
Nike Reports Blowout Earnings...
Nike Inc. (NKE). The Beaverton, Ore.-based footwear and apparel company on Wednesday said third-quarter net income rose to $463.8 million or 92 cents a share from $350.8 million or 68 cents a share same time a year earlier.
The mean estimate of analysts polled by Thomson Financial was for earnings of 81 cents a share for the quarter. Revenue rose 16% to $4.54 billion from $3.93 billion a year ago, benefiting from favorable currency exchange rates movement, the company said.
The mean estimate of analysts polled by Thomson Financial was for earnings of 81 cents a share for the quarter. Revenue rose 16% to $4.54 billion from $3.93 billion a year ago, benefiting from favorable currency exchange rates movement, the company said.
China Mobile Growing Fast...
China Mobile Ltd. (CHL). The Chinese mobile telecommunications services provider today said net new subscribers in February totalled 7.97 million, bringing total subscribers to 384.35 million at the end of the last month. The company had reported 7.04 million net new subscribers for January.
Anadarko Wins Major Bid...
Anadarko Petroleum Corp. (APC). The Houston, TX-based energy company said late Wednesday it was the apparent high bidder on 20 deepwater tracts in the Central and Eastern Gulf of Mexico oil and gas lease sales 206 and 224, representing an expenditure of $143 million.
With the addition of the new blocks, Anadarko said it will have access to 633 blocks covering 3.5 million gross acres in the deepwater Gulf of Mexico.
With the addition of the new blocks, Anadarko said it will have access to 633 blocks covering 3.5 million gross acres in the deepwater Gulf of Mexico.
Earnings Due Today....
• Barnes and Noble Inc. (BKS). Expected to report Q4 pforift of $1.70 per share, according to analysts polled by Thomson Financial. This is a decreased of 7.88% from the same quarter last year when the company earned $1.84.
• FedEx Corp. (FDX). Expected to report Q3 profit of $1.22 per share, down 9.56% from the same quarter last year when the company earned $1.35.
• Palm Inc. (PALM). Expected to report Q3 loss of $0.14 per share, against a profit of $0.16 earned the same quarter last year.
• Winnebago Industries Inc. (WGO). Expected to report Q2 profit of $0.23 per share, down 5.83% from the same quarter last year when it earned $0.24.
• FedEx Corp. (FDX). Expected to report Q3 profit of $1.22 per share, down 9.56% from the same quarter last year when the company earned $1.35.
• Palm Inc. (PALM). Expected to report Q3 loss of $0.14 per share, against a profit of $0.16 earned the same quarter last year.
• Winnebago Industries Inc. (WGO). Expected to report Q2 profit of $0.23 per share, down 5.83% from the same quarter last year when it earned $0.24.
Today's Top Stories....
Oil drops below $100 a barrel; April gold hits 1-month low of $904.70/oz.
• PepsiCo, Pepsi Bottling to pay $1.4 billion for 75.5% stake in Russian juice maker
• Credit Suisse warns Q1 unlikely to be profitable
• Airline sector downgraded to 'neutral' from 'positive' at Lehman Bros.
• Abbott Labs raised to 'outperform' at Wachovia after end of Takeda joint venture
• Children’s Place Retail swings to Q4 loss; in talks over partial ownership of Disney Store chain in North America
• Amgen cut to ‘market perform’ at Wachovia on competitive threat to Epogen
•AOL may sell Indian call centre biz for $100 million - report
• PepsiCo, Pepsi Bottling to pay $1.4 billion for 75.5% stake in Russian juice maker
• Credit Suisse warns Q1 unlikely to be profitable
• Airline sector downgraded to 'neutral' from 'positive' at Lehman Bros.
• Abbott Labs raised to 'outperform' at Wachovia after end of Takeda joint venture
• Children’s Place Retail swings to Q4 loss; in talks over partial ownership of Disney Store chain in North America
• Amgen cut to ‘market perform’ at Wachovia on competitive threat to Epogen
•AOL may sell Indian call centre biz for $100 million - report
Wednesday, March 19, 2008
Nike Beats Estimates...
Nike (NKE) reported third quarter earnings totaled $0.92 per share. Analysts were calling for earnings of just $0.81 per share. Revenues rose 15% year-over-year to $4.5 billion versus the $4.4 billion consensus.
Notably, NKE reported worldwide futures orders for athletic footwear and apparel, scheduled for delivery from March 2008 through July 2008, totaled $6.9 billion. That is 11% higher than the orders reported for the same period one year ago.
Notably, NKE reported worldwide futures orders for athletic footwear and apparel, scheduled for delivery from March 2008 through July 2008, totaled $6.9 billion. That is 11% higher than the orders reported for the same period one year ago.
Wednesday's Summary....
U.S. Markets
Dow -293.00 (-2.36%)
Nasdaq -58.30 (-2.57%)
S&P 500 -32.32 (-2.43%)
News That Moved the Market
Oil, Gold, and Stocks All Lose Ground. Stocks traded higher briefly in the morning, after Morgan Stanley (MS, +1.4%) reported better than expected earnings. The bank took a $2.3 billion writedown connected to subprime and housing issues, but added it had one of its best quarterly trading performances in the history of the firm. Major indices declined however, as investors noticed a sharp sell-off in commodities. Crude fell 4.5%, after the weekly inventories report showed an increase in stockpiles, while gold dropped 6.5%. Some experts blamed today's actions on hedge funds being forced to sell positions in order to de-leverage or meet margin calls. It was yet another reminder of how much influence hedge funds have attained in the last couple years, and how much they can move markets.
Record IPO for Visa. Visa (V, +28.4%) attracted a massive amount of bids and easily became the largest IPO in U.S. history. The stock opened at $44/share, pushing the total proceeds from the offering to more than $17.5 billion.
Capital Requirement Reductions Boost Fannie and Freddie. The Office of Federal Housing Enterprise Oversight will relax its capital requirements for Fannie Mac (FNM, +8.8%) and Freddie Mac (FRE, +14.9%), a move that might lead to the immediate injection of $200 billion in the mortgage-backed securities market. Both companies will now be able to do more business and help turnaround the housing market.
More Writedowns At Merrill? News that Merrill Lynch (MER, -8.6%) is suing XL Capital Assurance over default protection on $3 billion worth of CDOs concerned investors at the end of the day, pushing markets to finish at their worst levels of the day. "We filed suit to make clear that XL Capital Assurance Inc. is required to meet its contractual obligations," Mark Herr, a spokesman for Merrill, said. So far, MER has taken $24.5 billion worth of writedowns, which is the most of any of the major banks.
Quick Tics:
Nike (NKE, +0.3% day: +3.7% A.H.) reported a 32% increase in profits after the bell…
Apple (AAPL, -2.4%) is considering giving free access to iTunes to customers in exchange for paying more for an iPod or iPhone.
Tomorrow Notable Earnings:
FedEx (FDX) Time Not Supplied
Economic Events:
8:30 AM: Jobless Claims
10:00 AM: Leading Indicators
10:00 AM: Philadelphia Fed
Dow -293.00 (-2.36%)
Nasdaq -58.30 (-2.57%)
S&P 500 -32.32 (-2.43%)
News That Moved the Market
Oil, Gold, and Stocks All Lose Ground. Stocks traded higher briefly in the morning, after Morgan Stanley (MS, +1.4%) reported better than expected earnings. The bank took a $2.3 billion writedown connected to subprime and housing issues, but added it had one of its best quarterly trading performances in the history of the firm. Major indices declined however, as investors noticed a sharp sell-off in commodities. Crude fell 4.5%, after the weekly inventories report showed an increase in stockpiles, while gold dropped 6.5%. Some experts blamed today's actions on hedge funds being forced to sell positions in order to de-leverage or meet margin calls. It was yet another reminder of how much influence hedge funds have attained in the last couple years, and how much they can move markets.
Record IPO for Visa. Visa (V, +28.4%) attracted a massive amount of bids and easily became the largest IPO in U.S. history. The stock opened at $44/share, pushing the total proceeds from the offering to more than $17.5 billion.
Capital Requirement Reductions Boost Fannie and Freddie. The Office of Federal Housing Enterprise Oversight will relax its capital requirements for Fannie Mac (FNM, +8.8%) and Freddie Mac (FRE, +14.9%), a move that might lead to the immediate injection of $200 billion in the mortgage-backed securities market. Both companies will now be able to do more business and help turnaround the housing market.
More Writedowns At Merrill? News that Merrill Lynch (MER, -8.6%) is suing XL Capital Assurance over default protection on $3 billion worth of CDOs concerned investors at the end of the day, pushing markets to finish at their worst levels of the day. "We filed suit to make clear that XL Capital Assurance Inc. is required to meet its contractual obligations," Mark Herr, a spokesman for Merrill, said. So far, MER has taken $24.5 billion worth of writedowns, which is the most of any of the major banks.
Quick Tics:
Nike (NKE, +0.3% day: +3.7% A.H.) reported a 32% increase in profits after the bell…
Apple (AAPL, -2.4%) is considering giving free access to iTunes to customers in exchange for paying more for an iPod or iPhone.
Tomorrow Notable Earnings:
FedEx (FDX) Time Not Supplied
Economic Events:
8:30 AM: Jobless Claims
10:00 AM: Leading Indicators
10:00 AM: Philadelphia Fed
Verizon Opens Network...
Verizon Wireless (VZ) says its open network will be "open for business" towards the end of 2Q. In a strong show of support for the "open concept," the #2 U.S. wireless provider is opening its network to third-party developers, hoping to spur the creation of new services and revenue streams.
Today's Upgrades...
List of Stocks Upgraded this Morning:
Buffalo Wild Wings (BWLD) by SMH Capital
Mercantile Bank (MBWM) by Stifel Nicolaus
Imclone (IMCL) by Citigroup
National City (NCC) by RBC Capital Mkts
Bunge (BG) by JP Morgan
Massey Energy (MEE) by JP Morgan
International Coal (ICO) by JP Morgan
Sanderson Farms (SAFM) by JP Morgan
Tyson Foods (TSN) by JP Morgan
AstraZeneca (AZN) by HSBC Securities
Countrywide (CFC) by Wachovia
Buffalo Wild Wings (BWLD) by SMH Capital
Mercantile Bank (MBWM) by Stifel Nicolaus
Imclone (IMCL) by Citigroup
National City (NCC) by RBC Capital Mkts
Bunge (BG) by JP Morgan
Massey Energy (MEE) by JP Morgan
International Coal (ICO) by JP Morgan
Sanderson Farms (SAFM) by JP Morgan
Tyson Foods (TSN) by JP Morgan
AstraZeneca (AZN) by HSBC Securities
Countrywide (CFC) by Wachovia
Exxon Dealt Blow in Fight With Venezuela...
U.K. courts lifted a $12B freeze on Venezuela's assets and ordered ExxonMobil (XOM) to pay some fees. The legal battle began after Venezuela nationalized several oil projects. The ruling judge noted Petróleos de Venezuela SA, or PDVSA, isn't based in England and has no significant assets in the U.K. and is therefore not under its jurisdiction.
All the Apple You Can Eat...
Sources say Apple's (AAPL) iTunes online music store is considering teaming up with big music distributors to offer customers "all you can eat" iPods for a premium tacked on to the device purchase. The model would rival Nokia's (NOK) "comes with music" deal with Universal, but Apple is reportedly offering music companies just $20 per device, vs. Nokia's $80.
Apple is also considering a monthly/yearly iTunes subscription model. Market research has shown customers would pay up to $100, or $7-8/month, for unlimited access.
Apple is also considering a monthly/yearly iTunes subscription model. Market research has shown customers would pay up to $100, or $7-8/month, for unlimited access.
Yahoo Plays Hard to Get...
Yahoo (YHOO) challenged Microsoft (MSFT) by reaffirming its 2008 financial guidance, and projecting strong revenue and cash-flow growth for 2009 and 2010 -- based on which shares could be worth north of $40/share vs. Microsoft's $31 cash and stock offer which is now worth about $29.50. Citigroup's Mark Mahaney said the 2009-10 numbers would not be easy to hit, but thinks the deal will ultimately close at more than $31/share.
Meanwhile Chinese internet company Alibaba, 39% owned by Yahoo, said it is in advanced talks to finance a buyback of Yahoo's stake should Microsoft's bid prevail.
Meanwhile Chinese internet company Alibaba, 39% owned by Yahoo, said it is in advanced talks to finance a buyback of Yahoo's stake should Microsoft's bid prevail.
VISA Starts Trading Today....
Visa Inc. The San Francisco-based credit card giant late Tuesday priced its initial public offering of 406 million shares at $44 each, raising $17.86 billion. The pricing came in above the expected range of $37 to $42 a share.
The company's shares will begin trading today on the New York Stock Exchange under the ticker symbol "V."
The company's shares will begin trading today on the New York Stock Exchange under the ticker symbol "V."
Adobe Posts Strong Earnings...
Adobe Systems Inc. (ADBE). The San Jose, Calif-based design and publishing software maker late Tuesday said first-quarter net income rose to $219.37 million, or $0.38 a share, from $143.85 million, or $0.24 a share, a year ago. For the quarter to Feb. 29, revenue rose to $851.96 million from $620.29 million.
For the second quarter, Adobe said it is targeting revenue of $855-$885 million. For 2008, it reaffirmed target revenue growth of about 13% and EPS of $1.45-$1.51.
Adobe stock is up 1.90 to $33.60 in premarket trading.
For the second quarter, Adobe said it is targeting revenue of $855-$885 million. For 2008, it reaffirmed target revenue growth of about 13% and EPS of $1.45-$1.51.
Adobe stock is up 1.90 to $33.60 in premarket trading.
Earnings Due Today....
COMPANIES REPORTING EARNINGS
• Charming Shoppes Inc. (CHRS). Expected to report Q4 loss of $0.19 a share, according to the analysts polled by Thomson Financial. This is against a profit of $0.19 a share earned same quarter last year.
• Cintas Corp. (CTAS) Expected to report Q3 earnings of $0.54 a share.
• Discover Financial Services (DFS). Expected to report Q1 profit of $0.40 per share.
• Guess? Inc. (GES). Expected to report a Q4 profit of $0.57 per share.
• Herman Miller Inc. (MLHR). Expected to report Q3 earnings of $0.59 a share.
• Morgan Stanley (MS). Expected to report a Q1 profit of $1.03 per share.
• Nike Inc. (NKE). Expected to report Q3 profit of $0.81 per share, up 17.66% from the same quarter last year when the company earned $0.69.
• Ross Stores Inc. (ROST). Expected to report Q4 profit of $0.70 per share.
• Charming Shoppes Inc. (CHRS). Expected to report Q4 loss of $0.19 a share, according to the analysts polled by Thomson Financial. This is against a profit of $0.19 a share earned same quarter last year.
• Cintas Corp. (CTAS) Expected to report Q3 earnings of $0.54 a share.
• Discover Financial Services (DFS). Expected to report Q1 profit of $0.40 per share.
• Guess? Inc. (GES). Expected to report a Q4 profit of $0.57 per share.
• Herman Miller Inc. (MLHR). Expected to report Q3 earnings of $0.59 a share.
• Morgan Stanley (MS). Expected to report a Q1 profit of $1.03 per share.
• Nike Inc. (NKE). Expected to report Q3 profit of $0.81 per share, up 17.66% from the same quarter last year when the company earned $0.69.
• Ross Stores Inc. (ROST). Expected to report Q4 profit of $0.70 per share.
Today's Top Stories....
• Staples plans hostile bid for Dutch rival - report
• Venezuela wants to return to arbitration with ExxonMobil
• NASDAQ OMX to form Europe-wide market for blue chips
• Total buys 30% stake from Chevron in Alaska exploration zone
• Japan's Takeda Pharma in talks to buy out U.S. JV with Abbott - report
• China's Alibaba planning to buy out Yahoo stake - report
• PetroChina FY net up slightly as crude output rises only 1%
• General Mills Q3 net rises to $430 million
• Apple in talks with music cos to offer free iTunes access - report
• JP Morgan cuts Kraft Foods to 'neutral' from 'overweight'
• Bear Stearns to reimburse indemnified employees for legal costs
• Venezuela wants to return to arbitration with ExxonMobil
• NASDAQ OMX to form Europe-wide market for blue chips
• Total buys 30% stake from Chevron in Alaska exploration zone
• Japan's Takeda Pharma in talks to buy out U.S. JV with Abbott - report
• China's Alibaba planning to buy out Yahoo stake - report
• PetroChina FY net up slightly as crude output rises only 1%
• General Mills Q3 net rises to $430 million
• Apple in talks with music cos to offer free iTunes access - report
• JP Morgan cuts Kraft Foods to 'neutral' from 'overweight'
• Bear Stearns to reimburse indemnified employees for legal costs
Tuesday, March 18, 2008
Nice Day for the Market...
U.S. Markets
Dow +420.41 (+3.51%)
Nasdaq +91.25 (+4.19%)
S&P 500 +54.14 (+4.24%)
News That Moved the Market
Markets Sizzles With More Confidence In Financials. Markets began the session with healthy gains after both Goldman Sachs (GS, +16.3%) and Lehman (LEH, +43.3%) reported better than expected quarters and reassured investors that they were well capitalized. Heading into the FOMC announcement, the Dow was up nearly 300 points. The Fed's decision to cut rates by 75 basis points caused a sell-off, as most expected a full-point cut, but the markets quickly recovered and finished the day at new highs.
Fed Details. The Fed cut both the fed funds rate and discount rate by 75 basis points to 2.25% and 2.50%, respectively. Two members voted against the cut, Dallas Fed President Fisher and Philadelphia Fed President Plosser, who preferred easing less. The statement acknowledged the uncertainty surrounding inflation, but said it expects inflation to moderate over time, keeping the door for further cuts if necessary. The Fed also assured that it will act in a timely manner if more price instability creeps up.
Quick Tics:
The Financial Sector increased 8.5% on the day, its largest jump in 8 years...
Adobe (ADBE, +3.4% day; +4.7% A.H.) reported sales jumped 37% and affirmed revenue would increase 13% this year…
Housing starts fell 0.6% last month, which was better than economists expected...
Bear Stearn's (BSC, +22.9%) jumped after more stockholders hinted they would vote against the JP Morgan (JPM, +6.0%) buyout.
Tomorrow Notable Earnings:
General Mills, Inc.(GIS) Before Open
Morgan Stanley (MS) Before Open
Nike (NKE) After Close
Economic Events:
10:30 AM: Crude Inventories
Dow +420.41 (+3.51%)
Nasdaq +91.25 (+4.19%)
S&P 500 +54.14 (+4.24%)
News That Moved the Market
Markets Sizzles With More Confidence In Financials. Markets began the session with healthy gains after both Goldman Sachs (GS, +16.3%) and Lehman (LEH, +43.3%) reported better than expected quarters and reassured investors that they were well capitalized. Heading into the FOMC announcement, the Dow was up nearly 300 points. The Fed's decision to cut rates by 75 basis points caused a sell-off, as most expected a full-point cut, but the markets quickly recovered and finished the day at new highs.
Fed Details. The Fed cut both the fed funds rate and discount rate by 75 basis points to 2.25% and 2.50%, respectively. Two members voted against the cut, Dallas Fed President Fisher and Philadelphia Fed President Plosser, who preferred easing less. The statement acknowledged the uncertainty surrounding inflation, but said it expects inflation to moderate over time, keeping the door for further cuts if necessary. The Fed also assured that it will act in a timely manner if more price instability creeps up.
Quick Tics:
The Financial Sector increased 8.5% on the day, its largest jump in 8 years...
Adobe (ADBE, +3.4% day; +4.7% A.H.) reported sales jumped 37% and affirmed revenue would increase 13% this year…
Housing starts fell 0.6% last month, which was better than economists expected...
Bear Stearn's (BSC, +22.9%) jumped after more stockholders hinted they would vote against the JP Morgan (JPM, +6.0%) buyout.
Tomorrow Notable Earnings:
General Mills, Inc.(GIS) Before Open
Morgan Stanley (MS) Before Open
Nike (NKE) After Close
Economic Events:
10:30 AM: Crude Inventories
Fed Cuts Rates Another 75 Basis Points...
Federal Reserve slashes its key interest rate to 2.25% and signals more reductions are likely, unloading heavy artillery in its effort to keep the credit crunch from triggering a prolonged recession.
Rates are back to June 2004 levels.
Rates are back to June 2004 levels.
Kirby Corp Lifts Guidance...
Kirby Corp. (KEX) expects first-quarter net income to exceed 66 cents a share, above its previous forecast range of 57 cents to 62 cents. The Houston tank barge and towing vessel operator said the guidance reflects strong demand for both marine transportation and diesel engine service operations.
On average, analysts polled by Thomson Financial expect per-share earnings of 60 cents.
On average, analysts polled by Thomson Financial expect per-share earnings of 60 cents.
Lehman Jumps on Earnings Report...
Lehman Brothers (LEH) - brokerage's net slides 57% to $489 million, or 81¢ a share, as results are hurt by net mark-to-market adjustments of $1.8 billion. Revenue falls by 31% to $3.51 billion.
But shares gain 15% pre-market as results top estimates.
But shares gain 15% pre-market as results top estimates.
Goldman Beats Street....
Financial-services firm Goldman Sachs (GS) reports net earnings of $1.51 billion, or $3.23 a share. Net revenue drops to $8.34 billion from $12.73 billion. CEO says market conditions "are clearly very difficult," as firm takes net losses on residential mortgages and securities of $1 billion, while credit products included a loss of roughly $1 billion.
Wall Street expected EPS of $2.58.
Wall Street expected EPS of $2.58.
Rite Aid Warns....
Shares of Rite Aid (RAD) fell 6.3% after the drugstore operator warned it would lose more than a previous forecast of $0.27-0.31 during the fiscal year ended March 1. Rite Aid said it cannot estimate its exact loss, but noted that weaker earnings are forcing it to reduce by up to $1B ($1.38/share) a deferred tax credit it no longer thinks it will be able to take advantage of.
Earnings Due Today....
COMPANIES REPORTING EARNINGS
• AAR Corp. (AIR). Expected to report Q3 profit of $0.46 per share, according to analysts polled by Thomson Financial.
• Adobe Systems Inc. (ADBE). Expected to report Q1 profit of $0.45 per share.
• Darden Restaurants Inc. (DRI). Expected to report Q3 earnings of $0.82 per share.
• Goldman Sachs Group Inc. (GS). Expected to report Q1 profit of $2.58 per share.
• Healthways Inc. (HWAY). Expected to report Q2 profit of $0.33 per share, which is a 10.33% increase from the same quarter last year when the company earned $0.30.
• Lehman Brothers Holdings Inc. (LEH). Expected to report Q1 profit of $0.72 per share.
• AAR Corp. (AIR). Expected to report Q3 profit of $0.46 per share, according to analysts polled by Thomson Financial.
• Adobe Systems Inc. (ADBE). Expected to report Q1 profit of $0.45 per share.
• Darden Restaurants Inc. (DRI). Expected to report Q3 earnings of $0.82 per share.
• Goldman Sachs Group Inc. (GS). Expected to report Q1 profit of $2.58 per share.
• Healthways Inc. (HWAY). Expected to report Q2 profit of $0.33 per share, which is a 10.33% increase from the same quarter last year when the company earned $0.30.
• Lehman Brothers Holdings Inc. (LEH). Expected to report Q1 profit of $0.72 per share.
Today's Top Stories....
• New York Fed called on banks to support Lehman Bros. - report
• NYSE Euronext announces $1 billion share buyback; hikes annual dividend
• Goldman Sachs raised to 'outperform' at Wachovia on strong capital position
• Bear Stearns shareholder Joe Lewis seeks to block JP Morgan takeover - report
• BlackRock explores solutions for fund shareholders hit by auction-rate failures
• AstraZeneca could pay £14.25/shr for Shire and still create value - UBS
• Vodafone to axe 450 head office jobs • Deutsche Bank sued by auction-rate securities investors
• NYSE Euronext announces $1 billion share buyback; hikes annual dividend
• Goldman Sachs raised to 'outperform' at Wachovia on strong capital position
• Bear Stearns shareholder Joe Lewis seeks to block JP Morgan takeover - report
• BlackRock explores solutions for fund shareholders hit by auction-rate failures
• AstraZeneca could pay £14.25/shr for Shire and still create value - UBS
• Vodafone to axe 450 head office jobs • Deutsche Bank sued by auction-rate securities investors
Monday's Trading Summary...
U.S. Markets
Dow +21.16 (+0.18%)
Nasdaq -35.48 (-1.60%)
S&P 500 -11.54 (-0.90%)
News That Moved the Market
Don't Panic. When the opening bell rang, many expected today to be a bloodbath. Bear Stearns's (BSC, -84.0%) liquidity crisis and sale to JP Morgan (JPM, +10.3%) for about $240 million shocked most investors and left many wondering what bank was next. To stem the fears, the Fed reacted with assertiveness, lowering its discount rate by a quarter of a point to 3.25% and offering lending to a greater number of companies, including investment banks. Though foreign markets lost ground overnight, the Fed's actions were enough to reduce nervousness and actually convince some that the Fed will back this market and not let it nosedive. Trading turned around midday and a late rally allowed the markets to end basically flat. Tomorrow's Fed announcement will be important, with the market now expecting a full-point cut.
Lehman May Be Next. Lehman Brothers (LEH, -19.1%) stock dropped as speculation increased that it may be the next to fold. The move came after CEO Richard Fuld said the Fed's "move improves the liquidity picture and, from my perspective, takes the liquidity issue for the entire industry off the table." The idea that the company's CEO would have to say something like that, especially after Bear's CEO's gave a similar statement last week, scared investors and drove them to sell their Lehman positions. Tomorrow, Lehman reports its latest earnings.
Quick Tics:
Commodities had a weak session, with the 4.6% decline in the CRB Index…
To this point, Bear Stearns's book value was reported to be $84 per share at the end of the fourth quarter.
Tuesday's Notable Earnings:
Adobe Systems (ADBE) Time Not Supplied
Goldman Sachs (GS) Before Open
Lehman Brothers (LEH) Before Open
Gamestop Corp. (GME) Time Not Supplied
Economic Events:
8:30 AM: Housing Starts
8:30 AM: PPI
10:00 AM: State Street Investor Confidence Index
2:15 PM: FOMC Announcement
Dow +21.16 (+0.18%)
Nasdaq -35.48 (-1.60%)
S&P 500 -11.54 (-0.90%)
News That Moved the Market
Don't Panic. When the opening bell rang, many expected today to be a bloodbath. Bear Stearns's (BSC, -84.0%) liquidity crisis and sale to JP Morgan (JPM, +10.3%) for about $240 million shocked most investors and left many wondering what bank was next. To stem the fears, the Fed reacted with assertiveness, lowering its discount rate by a quarter of a point to 3.25% and offering lending to a greater number of companies, including investment banks. Though foreign markets lost ground overnight, the Fed's actions were enough to reduce nervousness and actually convince some that the Fed will back this market and not let it nosedive. Trading turned around midday and a late rally allowed the markets to end basically flat. Tomorrow's Fed announcement will be important, with the market now expecting a full-point cut.
Lehman May Be Next. Lehman Brothers (LEH, -19.1%) stock dropped as speculation increased that it may be the next to fold. The move came after CEO Richard Fuld said the Fed's "move improves the liquidity picture and, from my perspective, takes the liquidity issue for the entire industry off the table." The idea that the company's CEO would have to say something like that, especially after Bear's CEO's gave a similar statement last week, scared investors and drove them to sell their Lehman positions. Tomorrow, Lehman reports its latest earnings.
Quick Tics:
Commodities had a weak session, with the 4.6% decline in the CRB Index…
To this point, Bear Stearns's book value was reported to be $84 per share at the end of the fourth quarter.
Tuesday's Notable Earnings:
Adobe Systems (ADBE) Time Not Supplied
Goldman Sachs (GS) Before Open
Lehman Brothers (LEH) Before Open
Gamestop Corp. (GME) Time Not Supplied
Economic Events:
8:30 AM: Housing Starts
8:30 AM: PPI
10:00 AM: State Street Investor Confidence Index
2:15 PM: FOMC Announcement
Monday, March 17, 2008
Afternoon Update....
Dow -146
S&P - 29
Nasdaq -51
After gapping lower, the market actually went positive just before noon. Since then we have drifted back lower.
My take: This market is pretty much washed out. Not that we can't go lower, but long term, we have a serious buying opportunity here. The Fed is not going to let the entire US Financial system collapse. However, this is how assets are currently being priced. Bear Stearns was always the type of company that had an air of shadiness about them....and they probably got what they had coming to them.
Tomorrow the Fed meets on interest rates. No doubt they will try to shock the market back to life again. It's too bad they didn't react quicker...if you remember I was pushing for them to act on rates the first week of January...they waited until the third week...and basically created this run on the bank mentality.
If history holds up...and it should...this looks like an inflection point...a place to buy and NOT a place to sell. Hang in there and I think you will be better off a year from now.
Look for bargains.
S&P - 29
Nasdaq -51
After gapping lower, the market actually went positive just before noon. Since then we have drifted back lower.
My take: This market is pretty much washed out. Not that we can't go lower, but long term, we have a serious buying opportunity here. The Fed is not going to let the entire US Financial system collapse. However, this is how assets are currently being priced. Bear Stearns was always the type of company that had an air of shadiness about them....and they probably got what they had coming to them.
Tomorrow the Fed meets on interest rates. No doubt they will try to shock the market back to life again. It's too bad they didn't react quicker...if you remember I was pushing for them to act on rates the first week of January...they waited until the third week...and basically created this run on the bank mentality.
If history holds up...and it should...this looks like an inflection point...a place to buy and NOT a place to sell. Hang in there and I think you will be better off a year from now.
Look for bargains.
Market Gaps Lower....
Dow -152
S&P - 22
Nasdaq -38
Following Bear Stearns collapse the market is lower. The big question is whether there are any other collapses in the wings.
The Fed meets tomorrow...should be an interesting meeting.
S&P - 22
Nasdaq -38
Following Bear Stearns collapse the market is lower. The big question is whether there are any other collapses in the wings.
The Fed meets tomorrow...should be an interesting meeting.
Fed Cuts Discount Rate....
At the same time it was backstopping J.P. Morgan's buyout of Bear Stearns, the Fed also stepped in to prop up the broader credit crunch. The Fed dropped its discount window rate -- at which intstitutions borrow directly from the Fed -- by 25 BP to 3.25%, and extended the maximum loan term to 90 days from 30. In an unprecedented move, it also opened up the window to securities dealers for at least the next six months.
The move to waive the usual restriction on Fed lending to banks was approved unanimously by the five FOMC governors.
The move to waive the usual restriction on Fed lending to banks was approved unanimously by the five FOMC governors.
Bear Stearns Taken Out by JP Morgan...
Bear Stearns (BSC) shocked Wall Street by selling itself Sunday for just $2/share to J.P. Morgan & Chase (JPM), the bank that stepped up Friday to bail it out in tandem with the New York Federal Reserve. In order to make the deal palatable, the Fed will assume risk on up to $30B of Bear Stearns' riskiest assets, including $20B of mortgage-backed securities. "
Despite recent events, the health of franchise and the prime brokerage and clearing business is in good shape," a JPM executive said Sunday. JPM does, however, assume some of Bear's large positions. It's unlikely other bidders will emerge, due to the degree of uncertainty surrounding Bear's positions.
Despite recent events, the health of franchise and the prime brokerage and clearing business is in good shape," a JPM executive said Sunday. JPM does, however, assume some of Bear's large positions. It's unlikely other bidders will emerge, due to the degree of uncertainty surrounding Bear's positions.
Sunday, March 16, 2008
Free Cash Flow "BUYS"
Barron's interviews free-cash guru Bruce Berkowitz, CEO of Fairholme Capital Management, whose no-load Fairholme Fund boasts returns of 16.27% since its 1999 inception. Berkowitz advocates buying stocks capable of reacting to a variety of economic conditions, with an emphasis on companies with above-average free cash flow.
Stocks he likes:
Conglomerates Berkshire Hathaway (BRK.A) and Leucadia National (LUK) -- "they are always playing defense, because you never know when something bad will happen." Berkshire is still "reasonably priced," and stands to have "one more good growth spurt" as it capitalizes on current economic soft spots.
WellCare Health Plans (WCG) -- shares plunged when its headquarters were raided by federal agents in October. Past history shows that after a fine and some executive firings, firms in similar situations move on. With $5/share ($37) of free cash flow, it's too cheap.
Mohawk Industries (MHK) -- despite a rough residential real-estate market, MHK can earn $7/share of free cash flow. CEO Jeffrey Lorberbaum is growing the business while cutting costs.
St. Joe (JOE) -- an international airport is being built in the middle of its Florida land. Long-term, its holdings of oceans, rivers, lakes and sand make it a "very, very valuable company."
Sears (SHLD) -- despite recent turmoil, CEO Eddie Lampert understands retail. Sears' properties provide a downside cushion; shares are priced for a worst-case outcome.
Stocks he likes:
Conglomerates Berkshire Hathaway (BRK.A) and Leucadia National (LUK) -- "they are always playing defense, because you never know when something bad will happen." Berkshire is still "reasonably priced," and stands to have "one more good growth spurt" as it capitalizes on current economic soft spots.
WellCare Health Plans (WCG) -- shares plunged when its headquarters were raided by federal agents in October. Past history shows that after a fine and some executive firings, firms in similar situations move on. With $5/share ($37) of free cash flow, it's too cheap.
Mohawk Industries (MHK) -- despite a rough residential real-estate market, MHK can earn $7/share of free cash flow. CEO Jeffrey Lorberbaum is growing the business while cutting costs.
St. Joe (JOE) -- an international airport is being built in the middle of its Florida land. Long-term, its holdings of oceans, rivers, lakes and sand make it a "very, very valuable company."
Sears (SHLD) -- despite recent turmoil, CEO Eddie Lampert understands retail. Sears' properties provide a downside cushion; shares are priced for a worst-case outcome.
Saturday, March 15, 2008
Friday's Trading Summary...
U.S. Markets
Dow -194.65 (-1.60%)
Nasdaq -51.12 (-2.26%)
S&P 500 -27.34 (-2.08%)
News That Moved the Market
With A Name Like Bear, Why Didn't I Buy Puts? Financial news continues to determine the direction of the market and today's news was bad. Before the open, information was released that Bear Stearns (BSC, -47.4%) would receive emergency funding from the Fed through JP Morgan (JPM, -4.1%). The Fed used a little-known law that allows it to lend funds to companies after a special FOMC vote. The funds went through JP Morgan because it was operationally simpler than a direct loan, according anonymous staff member. The Fed made a pivotal decision to save Bear, understanding that a major bank going under would create an enormous financial crisis. JP Morgan is also looking to purchase at least some parts of Bear, and will help the troubled brokerage to locate additional funding. T he markets fell sharply on the news, with the VIX jumping to a 7-week high.
CPI Shows Tame Inflation. Though the news was forgotten after Bear Stearn's bombshell, the Labor Department announced this morning that inflation had moderated last month. The CPI and core-CPI, which does not include food and energy costs, both came in flat. The data said energy prices fell 0.5%, which surprised many considering the huge run up in energies recently. Most economists believe the Fed will lower interest rates by half a point next week.
Lehman Obtains Credit Line. Lehman Bros. (LEH, -14.6%) got a $2 billion, three year credit line from 40 banks. Lehman dropped dramatically after Bear Stearn's news came out. We will get a look at Lehman's numbers next week, when it reports its latest quarterly earnings.
Quick Tics:
Microsoft (MSFT, -2.3%) and Yahoo (YHOO, -2.9%) met earlier this week without reaching an agreement on Microsoft's merger proposal…
Gold hit an all-time high of $1,007.30 today...
Boeing (BA, +2.7%) traded higher after getting an upgrade from Morgan Stanley (MS, -4.9%).
Monday's Notable Earnings
Bear Stearns (BSC) Before Open
Economic Events:
8:30 AM: NY Empire State Index
9:00 AM: Net Foreign
9:15 AM: Capacity Utilization
9:15 AM: Industrial Production
Dow -194.65 (-1.60%)
Nasdaq -51.12 (-2.26%)
S&P 500 -27.34 (-2.08%)
News That Moved the Market
With A Name Like Bear, Why Didn't I Buy Puts? Financial news continues to determine the direction of the market and today's news was bad. Before the open, information was released that Bear Stearns (BSC, -47.4%) would receive emergency funding from the Fed through JP Morgan (JPM, -4.1%). The Fed used a little-known law that allows it to lend funds to companies after a special FOMC vote. The funds went through JP Morgan because it was operationally simpler than a direct loan, according anonymous staff member. The Fed made a pivotal decision to save Bear, understanding that a major bank going under would create an enormous financial crisis. JP Morgan is also looking to purchase at least some parts of Bear, and will help the troubled brokerage to locate additional funding. T he markets fell sharply on the news, with the VIX jumping to a 7-week high.
CPI Shows Tame Inflation. Though the news was forgotten after Bear Stearn's bombshell, the Labor Department announced this morning that inflation had moderated last month. The CPI and core-CPI, which does not include food and energy costs, both came in flat. The data said energy prices fell 0.5%, which surprised many considering the huge run up in energies recently. Most economists believe the Fed will lower interest rates by half a point next week.
Lehman Obtains Credit Line. Lehman Bros. (LEH, -14.6%) got a $2 billion, three year credit line from 40 banks. Lehman dropped dramatically after Bear Stearn's news came out. We will get a look at Lehman's numbers next week, when it reports its latest quarterly earnings.
Quick Tics:
Microsoft (MSFT, -2.3%) and Yahoo (YHOO, -2.9%) met earlier this week without reaching an agreement on Microsoft's merger proposal…
Gold hit an all-time high of $1,007.30 today...
Boeing (BA, +2.7%) traded higher after getting an upgrade from Morgan Stanley (MS, -4.9%).
Monday's Notable Earnings
Bear Stearns (BSC) Before Open
Economic Events:
8:30 AM: NY Empire State Index
9:00 AM: Net Foreign
9:15 AM: Capacity Utilization
9:15 AM: Industrial Production
Friday, March 14, 2008
Gold and Oil Soar...
Gold (GLD) topped $1,000/ounce Thursday and crude (USO) hit a record $111, as a weak U.S. dollar, concerns over a shaky U.S. economy, and inflationary fears saw investors moving money to tangible assets. "The funds keep throwing big-time money at commodities," a gold analyst said. Some experts say the gold rush is likely far from over, while noting sentiment can and does change quickly.
Zumiez 4Q Net Climbs 10%...
Zumiez's (ZUMZ) net income rose despite challenges late in quarter and the surf-and-skate company said it remains "upbeat" about its prospects going forward. The company offered 2008 guidance bracketing analysts' expectations, sending shares up after-hours. Zumiez's net income rose 10% to $12.4 million, or 42 cents a share, up from $11.3 million, or 39 cents a share, a year earlier. Revenue grew 13% to $126.6 million from $112.4 million while same-store sales rose 4%, compared with a 12% rise a year earlier.
Analysts' latest mean estimates were for earnings of 38 cents a share on revenue of $126 million. Gross margin slid to 38.4% from 39.3%.
Looking ahead, Zumiez, which has most of its stores in the West, expects fiscal year per-share earnings of 90 cents to 93 cents on same-store sales flat or up in the low single digits. Analysts' mean estimate was for fiscal year earnings of 92 cents.
Analysts' latest mean estimates were for earnings of 38 cents a share on revenue of $126 million. Gross margin slid to 38.4% from 39.3%.
Looking ahead, Zumiez, which has most of its stores in the West, expects fiscal year per-share earnings of 90 cents to 93 cents on same-store sales flat or up in the low single digits. Analysts' mean estimate was for fiscal year earnings of 92 cents.
Aeropostale Beats Estimates...
Aeropostale (ARO) reported net income of $64.7 million, or 95 cents a share, up 13% from $57.3 million, or 72 cents a share, a year earlier. The quarter for all three firms ended Feb. 2. Excluding items, earnings rose to 93 cents a share from 67 cents.
Aeropostale in January raised its earnings guidance to 87 cents a share.
Analysts' latest mean estimate was for earnings of 88 cents a share, according to a poll by Thomson Financial.
Aeropostale in January raised its earnings guidance to 87 cents a share.
Analysts' latest mean estimate was for earnings of 88 cents a share, according to a poll by Thomson Financial.
Genentech Boosts 2008 Forecast...
Biotech company Genentech (DNA) now expects 2008 earnings excluding items of $3.35 to $3.45 a share, revised from a prior forecast of $3.30 to $3.45 a share.
CPI Shows Inflation Slowing...
Consumer prices were unexpectedly flat last month, paving the way for a large interest rate reduction by the Fed next week to shore up the economy. Wall Street economists had expected a sharper 0.2% rise in both the headline and core indexes.
Bear Stearns to Get Financing From JP Morgan...
J.P. Morgan Chase says it agreed, in combination with the Federal Reserve Bank of New York, to provide secured financing to Bear Stearns as needed for an initial period of up to 28 days. Bear Stearn's CEO Alan Schwartz says the firm's liquidity position in the last 24 hours has significantly deteriorated. Bear Stearns shares are down 43%.
Today's Top Stories....
• Carlyle studying ways to compensate Carlyle Capital investors - report
• Target, JP Morgan in talks on credit card deal - report
• Exxon Mobil upgraded to ‘outperform’ at Credit Suisse
• Boeing upgraded to 'overweight' from 'equal-weight' at Morgan Stanley
• Napster and Telefonica's O2 link up to offer 5 million tracks - report
• Steris names Michael Tokich as CFO; to buy back up to $300 million of stock
• Target, JP Morgan in talks on credit card deal - report
• Exxon Mobil upgraded to ‘outperform’ at Credit Suisse
• Boeing upgraded to 'overweight' from 'equal-weight' at Morgan Stanley
• Napster and Telefonica's O2 link up to offer 5 million tracks - report
• Steris names Michael Tokich as CFO; to buy back up to $300 million of stock
Thursday, March 13, 2008
Thursday's Market Summary....
U.S. Markets
Dow +35.50 (+0.29%)
Nasdaq +19.74 (+0.88%)
S&P 500 +6.71 (+0.51%)
News That Moved the Market
Market Gets a Boost From Standard & Poor's. Stocks began the session lower after a couple pieces of negative news, but were able to recover nicely following S&P's report that the bulk of the writedowns from subprime securities may be behind us. The ratings agency did increase its estimate for the total amount of the writedowns by $20 billion to $285 billion, but investors focused on the news that the end of this subprime mess could be in sight.
Another Fund Goes Under. Late Wednesday Carlyle Capital, a bond fund affiliated with the private-equity firm Carlyle Group, announced it had failed to find new financing or strike new a deal with its lenders, and would have to give up all its current assets. The collapse of the fund weighed on stocks in Europe and pushed U.S. futures into negative territory before the open. The fund, which had received more than $400 million in margin calls since March 5th, was severely crippled by the declines in demand and price of mortgage-backed securities.
Retail Sales Tumble. Retail sales unexpectedly decreased by 0.6% last month, raising fears of a recession. Economists were anticipating an increase of 0.1%. The figure is a key indicator of the strength for the U.S. consumer, and this report showed that perhaps a weaker economy combined with record high commodity prices are taking their tole. U.S. consumer spending makes up 70% of the GDP.
Quick Tics:
Time Warner (TWX, -1.7%) agreed to buy social networking site Bebo for $850 million…
Gold traded above $1,000 for the first time, but ended the session up $13.30 at $933.80/ounce...
Visa's $16 billion IPO, set for March 20th, is oversubscribed.
Tomorrow Notable Earnings
AnnTaylor Stores (ANN) Before Open
Liz Claiborne (LIZ) Before Open
Economic Events:
8:30 AM: CPI
10:00 AM: Michigan Sentiment-Prel.
Dow +35.50 (+0.29%)
Nasdaq +19.74 (+0.88%)
S&P 500 +6.71 (+0.51%)
News That Moved the Market
Market Gets a Boost From Standard & Poor's. Stocks began the session lower after a couple pieces of negative news, but were able to recover nicely following S&P's report that the bulk of the writedowns from subprime securities may be behind us. The ratings agency did increase its estimate for the total amount of the writedowns by $20 billion to $285 billion, but investors focused on the news that the end of this subprime mess could be in sight.
Another Fund Goes Under. Late Wednesday Carlyle Capital, a bond fund affiliated with the private-equity firm Carlyle Group, announced it had failed to find new financing or strike new a deal with its lenders, and would have to give up all its current assets. The collapse of the fund weighed on stocks in Europe and pushed U.S. futures into negative territory before the open. The fund, which had received more than $400 million in margin calls since March 5th, was severely crippled by the declines in demand and price of mortgage-backed securities.
Retail Sales Tumble. Retail sales unexpectedly decreased by 0.6% last month, raising fears of a recession. Economists were anticipating an increase of 0.1%. The figure is a key indicator of the strength for the U.S. consumer, and this report showed that perhaps a weaker economy combined with record high commodity prices are taking their tole. U.S. consumer spending makes up 70% of the GDP.
Quick Tics:
Time Warner (TWX, -1.7%) agreed to buy social networking site Bebo for $850 million…
Gold traded above $1,000 for the first time, but ended the session up $13.30 at $933.80/ounce...
Visa's $16 billion IPO, set for March 20th, is oversubscribed.
Tomorrow Notable Earnings
AnnTaylor Stores (ANN) Before Open
Liz Claiborne (LIZ) Before Open
Economic Events:
8:30 AM: CPI
10:00 AM: Michigan Sentiment-Prel.
Updating our Beats and Raises Portfolio...
Here is an updated list of companies that have Beat Earnings Expectations AND have Raised Guidance for 2008. These are the kind of stocks that should lead the market higher in a recovery:
Potash (POT)
Terex (TEX)
Intuitive Surgical (ISRG)
Hewlett-Packard (HPQ)
Medco Health (MHS)
Buffalo Wild Wings (BWLD)
Gamestop (GME)
Mosanto (MON)
JC Penney (JCP)
Zimmer Holdings (ZMH)
Sohu (SOHU)
Dolby Labs (DLB)
Research in Motion (RIMM)
Express Scripts (ESRX)
Boeing (BA)
Chattem (CHTT)
Corning (GLW)
IBM (IBM)
Netflix (NFLX)
EOG Resources (EOG)
Joy Global (JOYG)
Ciena (CIEN)
Steel Dynamics (STLD)
JA Solar (JASO)
Mastercard (MA)
Potash (POT)
Terex (TEX)
Intuitive Surgical (ISRG)
Hewlett-Packard (HPQ)
Medco Health (MHS)
Buffalo Wild Wings (BWLD)
Gamestop (GME)
Mosanto (MON)
JC Penney (JCP)
Zimmer Holdings (ZMH)
Sohu (SOHU)
Dolby Labs (DLB)
Research in Motion (RIMM)
Express Scripts (ESRX)
Boeing (BA)
Chattem (CHTT)
Corning (GLW)
IBM (IBM)
Netflix (NFLX)
EOG Resources (EOG)
Joy Global (JOYG)
Ciena (CIEN)
Steel Dynamics (STLD)
JA Solar (JASO)
Mastercard (MA)
Key Reversal.....
The market is now trading higher after gapping down lower this morning. At one point the Down was down over 250 points. Currently, the Dow is up 33 points.
This is key as the market is now shaking off bad news...something we haven't seen since before Christmas... Maybe a bottom is in.
This is key as the market is now shaking off bad news...something we haven't seen since before Christmas... Maybe a bottom is in.
Today's Upgrades...
Stocks that have been Upgraded this morning:
UnionBanCal (UB) by Punk, Ziegel & Co
JA Solar (JASO) by Needham & Co
Unisource Energy (UNS) by Soleil
Leap Wireless (LEAP) by Wachovia
Millennium Pharm (MLNM) by Piper Jaffray
Humana (HUM) by UBS
JA Solar (JASO) by Lehman Brothers
NIDEC (NJ) by JP Morgan
GSI Commerce (GSIC) by Jefferies & Co
Wimm-Bill-Dann Foods (WBD) by Credit Suisse
Monsanto (MON) by Banc of America Sec
AstraZeneca (AZN) by UBS
UnionBanCal (UB) by Punk, Ziegel & Co
JA Solar (JASO) by Needham & Co
Unisource Energy (UNS) by Soleil
Leap Wireless (LEAP) by Wachovia
Millennium Pharm (MLNM) by Piper Jaffray
Humana (HUM) by UBS
JA Solar (JASO) by Lehman Brothers
NIDEC (NJ) by JP Morgan
GSI Commerce (GSIC) by Jefferies & Co
Wimm-Bill-Dann Foods (WBD) by Credit Suisse
Monsanto (MON) by Banc of America Sec
AstraZeneca (AZN) by UBS
Carlisle Capital on Verge of Collapse...
Carlyle Capital, managed by private-equity firm Carlyle Group LLC, says it expects its lenders will soon seize "substantially all" of its remaining assets after banks including Deutsche Bank (DB) and J.P. Morgan (JPM) refused to extend it new financing terms.
The firm's leveraged $22B portfolio consists entirely of securities issued by government-sponsored lenders Fannie Mae (FNM) and Freddie Mac (FRE), the value of which has plummeted in recent weeks.
The firm's leveraged $22B portfolio consists entirely of securities issued by government-sponsored lenders Fannie Mae (FNM) and Freddie Mac (FRE), the value of which has plummeted in recent weeks.
Southwest Airlines Grounded...
Southwest Airlines (LUV) grounded 38 of its older planes amid government and internal probes over "ambiguity" in its inspection protocols. The groundings reduce its scheduled flights by 4%; the company said the aircraft would be reinspected Wednesday and return to service by this morning.
Last week the FAA confronted Southwest with a $10.2M fine for missing deadlines to inspect planes for fuselage cracks and continuing to fly them after acknowledging the oversight.
Last week the FAA confronted Southwest with a $10.2M fine for missing deadlines to inspect planes for fuselage cracks and continuing to fly them after acknowledging the oversight.
Paulson to Address Credit Crunch...
The Working Group on Financial Markets, led by Treasury Secretary Henry Paulson, will today release its recommendations to avoid a repetition of the liquidity freeze now threatening the U.S. economy. Highlights include "strong nationwide licensing standards" for mortgage brokers; a clearer differentiation in credit ratings between bonds and complex, riskier structures coupled with greater disclosure by rating agencies; and increased regulation of the dealings of issuers of mortgage-backed securities.
US Dollar Dives...
The dollar fell to 12-year lows against the yen, dropping to less than 100 yen, and hit record lows against the euro, as Asian/European markets and U.S. equity futures dived in overnight trading [see below], raising concerns of more turmoil in the financial markets. "Investors are getting out of dollar assets and this is going to lead to a dollar crash," a Tokyo currency manager said.
On four previous occasions since 1995, Japanese authorities have sold the yen when it approached the 100 mark to support its country's exports.
On four previous occasions since 1995, Japanese authorities have sold the yen when it approached the 100 mark to support its country's exports.
Earnings Due Today....
COMPANIES REPORTING EARNINGS
• Aeropostale Inc. (ARO). Expected to report Q4 earnings of $0.88 a share, according to analysts polled by Thomson Financial.
• Flanders Corp. (FLDR). Expected to post Q4 profit of $0.15 per share.
• TICC Capital Corp. (TICC). Expected to report Q4 profit of $0.34 per share, which is a decrease of 12.82% from the same quarter last year when the company earned $0.39 a share.
• Aeropostale Inc. (ARO). Expected to report Q4 earnings of $0.88 a share, according to analysts polled by Thomson Financial.
• Flanders Corp. (FLDR). Expected to post Q4 profit of $0.15 per share.
• TICC Capital Corp. (TICC). Expected to report Q4 profit of $0.34 per share, which is a decrease of 12.82% from the same quarter last year when the company earned $0.39 a share.
Today's Top Stories....
• Dollar tumbles below 100 yen for first time in 12 years
• Treasury secretary Henry Paulson to propose revamp of credit rules - report
• Treasury deputy secretary Robert Kimmitt says U.S. economy should pick up in Q2
• Home foreclosure filings rise 60% in Feb.
• Abbott's diabetes treatment gets FDA nod
• Electronic Arts makes $26-a-share hostile bid for Take-Two Interactive
• Monsanto upgraded to 'buy' at Banc of America
• AIG cut to equal-weight from overweight at Morgan Stanley; target cut to $50
• Tyco Electronics to buy back additional $500 million of stock
• Treasury secretary Henry Paulson to propose revamp of credit rules - report
• Treasury deputy secretary Robert Kimmitt says U.S. economy should pick up in Q2
• Home foreclosure filings rise 60% in Feb.
• Abbott's diabetes treatment gets FDA nod
• Electronic Arts makes $26-a-share hostile bid for Take-Two Interactive
• Monsanto upgraded to 'buy' at Banc of America
• AIG cut to equal-weight from overweight at Morgan Stanley; target cut to $50
• Tyco Electronics to buy back additional $500 million of stock
Wednesday, March 12, 2008
Wednesday's Summary....
U.S. Markets
Dow -46.57 (-0.38%)
Nasdaq -11.89 (-0.53%)
S&P 500 -11.88 (-0.90%)
News That Moved the Market
Stocks Fizzle Out. A late sell-off ensured the market would finish lower; one day after the Dow was up more than 4%. Stocks did trade higher for a large part of the session, but could not gain any momentum and looked overextended after huge gains yesterday. Oil topped $110/barrel for the first time, despite a greater than expected build in inventories. Instead of trading lower, investors seemed to have a "buy on the dip" mentality, pushing oil up another $1.17 to finish at $109.92. Government data showed speculators and fund managers are making bets for higher oil, with net long positions tripling in the last month. The rally should end when hedge funds and speculators decide to start taking profits, and will depend less on economic data, as exhibited today.
Target In Talks To Sell Half of Credit Card Division. Mega-retailer Target (TGT, -0.95% day; +1.45% A.H.) announced after the close it is in negotiations to sell about half of its credit-card loans for $4 billion. The potential acquirer was not named. The money could be used for stock buybacks, increasing shareholder value, and would create more stability on Target's balance sheet.
Quick Tics:
Caterpillar (CAT, +3.6%) and G.E. (GE, +1.7%) were both up after each company released positive outlooks…
Eliot Spitzer resigned as New York Governor after news surfaced yesterday of his connection to a prostitution ring…
Humana (HUM, -13.7%) dropped after cutting its earnings outlook.
Tomorrow Notable Earnings
Aeropostale, Inc. (ARO) Time Not Supplied
Economic Events:
8:30 AM: Retail Sales
8:30 AM: Jobless Claims
8:30 AM: Import and Export Prices
10:00 AM: Business Inventories
Dow -46.57 (-0.38%)
Nasdaq -11.89 (-0.53%)
S&P 500 -11.88 (-0.90%)
News That Moved the Market
Stocks Fizzle Out. A late sell-off ensured the market would finish lower; one day after the Dow was up more than 4%. Stocks did trade higher for a large part of the session, but could not gain any momentum and looked overextended after huge gains yesterday. Oil topped $110/barrel for the first time, despite a greater than expected build in inventories. Instead of trading lower, investors seemed to have a "buy on the dip" mentality, pushing oil up another $1.17 to finish at $109.92. Government data showed speculators and fund managers are making bets for higher oil, with net long positions tripling in the last month. The rally should end when hedge funds and speculators decide to start taking profits, and will depend less on economic data, as exhibited today.
Target In Talks To Sell Half of Credit Card Division. Mega-retailer Target (TGT, -0.95% day; +1.45% A.H.) announced after the close it is in negotiations to sell about half of its credit-card loans for $4 billion. The potential acquirer was not named. The money could be used for stock buybacks, increasing shareholder value, and would create more stability on Target's balance sheet.
Quick Tics:
Caterpillar (CAT, +3.6%) and G.E. (GE, +1.7%) were both up after each company released positive outlooks…
Eliot Spitzer resigned as New York Governor after news surfaced yesterday of his connection to a prostitution ring…
Humana (HUM, -13.7%) dropped after cutting its earnings outlook.
Tomorrow Notable Earnings
Aeropostale, Inc. (ARO) Time Not Supplied
Economic Events:
8:30 AM: Retail Sales
8:30 AM: Jobless Claims
8:30 AM: Import and Export Prices
10:00 AM: Business Inventories
Finally the Fed Gets it Right...
The Fed said it will inject another $200B into the economy, lending money against mortgage-backed debt for 28 days, vs. the current overnight. The move sparked a 3.6% gain in the Dow, its biggest rally in five years. The Fed hopes the additional liquidity will help Wall Street bankers cushion their books against loan defaults and depressed debt securities.
The odds of a 75 BP cut to the Fed's current 3% target on March 18 fell to 64%; it had previously been fully priced-in.
Most importantly, the Market is actually showing respect for this latest move by the Fed. A huge rally yesterday and what is shaping up to be a follow-up rally today...
The odds of a 75 BP cut to the Fed's current 3% target on March 18 fell to 64%; it had previously been fully priced-in.
Most importantly, the Market is actually showing respect for this latest move by the Fed. A huge rally yesterday and what is shaping up to be a follow-up rally today...
Technical Watch: Zimmer Holdings...
Check out the Daily chart on Zimmer Holdings (ZMH). The stock has formed a near perfect "cup and handle" formation.
The point to BUY would be if the stock breaks clearly above the $79-80 area.
The stock is up 1.05 to $76.15 this morning....and ticking higher.
The point to BUY would be if the stock breaks clearly above the $79-80 area.
The stock is up 1.05 to $76.15 this morning....and ticking higher.
Steel Dynamics Raises Guidance...
Steel Dynamics Inc. (STLD). the Fort Wayne, Ind.-based steel company late Tuesday said it now expects first-quarter earnings of $1.25 to $1.30 a share, up from its previous outlook of $1.10 to $1.20 a share, based on higher-than-anticipated flat-rolled steel pricing and improved scrap-processing results.
The current mean estimate of analysts polled by Thomson Financial is for a per-share profit of $1.18 for the quarter. Additionally, the company said it now expects full-year 2008 earnings of $5.25 to $5.75 a share, up from its prior forecast of $5 to $5.50 a share. Analysts are looking for earnings of $5.40 a share for the year.
The current mean estimate of analysts polled by Thomson Financial is for a per-share profit of $1.18 for the quarter. Additionally, the company said it now expects full-year 2008 earnings of $5.25 to $5.75 a share, up from its prior forecast of $5 to $5.50 a share. Analysts are looking for earnings of $5.40 a share for the year.
JA Solar Earnings In-Line, Raises Guidance...
JA Solar Holdings Co.'s (JASO) fourth-quarter net income rose 34% on a boon in shipments and despite losses from currency fluctuations, which the company said it is addressing going forward.
The company also projected 2008 revenue well above analysts' expectations and boosted its production target for the year. Shares rose to $15.90 during recent premarket trading after closing at $14.58 on Tuesday.
JA Solar's stock had been down more than 40% the past two months. JA Solar, a Chinese manufacturer of high-performance solar cells, posted net income of $13.5 million, or 9 cents a share, compared with $10.1 million, or 11 cents a share, a year earlier. Shares outstanding were 36% higher in the recently ended quarter. Revenue more than tripled to $144.2 million.
The mean estimates of analysts surveyed by Thomson Financial were for earnings of 9 cents a share on revenue of $118 million.
The company also projected 2008 revenue well above analysts' expectations and boosted its production target for the year. Shares rose to $15.90 during recent premarket trading after closing at $14.58 on Tuesday.
JA Solar's stock had been down more than 40% the past two months. JA Solar, a Chinese manufacturer of high-performance solar cells, posted net income of $13.5 million, or 9 cents a share, compared with $10.1 million, or 11 cents a share, a year earlier. Shares outstanding were 36% higher in the recently ended quarter. Revenue more than tripled to $144.2 million.
The mean estimates of analysts surveyed by Thomson Financial were for earnings of 9 cents a share on revenue of $118 million.
Take Two Raises Guidance...
By raising its annual guidance Tue, video game maker Take-Two Software (TTWO) could force Electronic Arts (ERTS) to hike its $2B bid for the company, argues research firm Wall Street Strategies. Citing a better than expected 1Q and surprisingly strong preorders for a game to be released in a few weeks, Take-Two said it now expects fiscal 2008 earnings of $1.35 to $1.55 a share on revenue of $1.25B to $1.4B.
The company had expected per-share earnings of $1.30 to $1.50. Analysts expected per-share earnings of $1.35 on revenue of $1.36 billion. "Without a doubt the saga surrounding ERTS' bid is about to get a bit more complex," wrote the Wall Street Strategies research firm.
The company had expected per-share earnings of $1.30 to $1.50. Analysts expected per-share earnings of $1.35 on revenue of $1.36 billion. "Without a doubt the saga surrounding ERTS' bid is about to get a bit more complex," wrote the Wall Street Strategies research firm.
Humana Warns...
Humana (HUM) stock gets crushed again in premarket trading Wed, dragging down the entire managed care sector, after the company cuts its 1Q and 2008 earnings guidance. HUM recently down 26% at $35. The stock fell 24% Tue, after peer WellPoint's (WLP) earnings warning raised fears that unexpectedly high medical costs could mean weakening profits across the health insurance sector.
Aetna falls 6.2% to $40, WellPoint edges down an additional 1.6% to $46.49, UnitedHealth Group (UNH) loses another 10% to $34.51.
Also in premarket, Cigna (CI) falls 12%, Coventry Health Care (CVH) down 7.4%. (MRL).
Aetna falls 6.2% to $40, WellPoint edges down an additional 1.6% to $46.49, UnitedHealth Group (UNH) loses another 10% to $34.51.
Also in premarket, Cigna (CI) falls 12%, Coventry Health Care (CVH) down 7.4%. (MRL).
Caterpillar Reaffirms Forecast...
Caterpillar Sees $60B In Revenue In 2010
Heavy-equipment maker reaffirms its 2008 per-share earnings and revenue forecast, and says it also expects revenues approaching $60 billion by 2010 and per-share earnings growth of 15% to 20% from 2005 through 2012. Shares rise 2% pre-market.
Heavy-equipment maker reaffirms its 2008 per-share earnings and revenue forecast, and says it also expects revenues approaching $60 billion by 2010 and per-share earnings growth of 15% to 20% from 2005 through 2012. Shares rise 2% pre-market.
Cleveland Cliffs to Split Stock....
Cleveland-Cliffs Inc. (CLF). The Cleveland, OH-based mining company late Tuesday declared a two-for-one stock split, payable May 15 to shareholders of record as of May 1.
Earnings Due Today....
COMPANIES REPORTING EARNINGS
• American Eagle Outfitters Inc. (AEO). Expected to report Q4 earnings of $0.66 a share, according to analysts polled by Thomson Financial.
• Gymboree Corp. (GYMB). Expected to post Q4 profit of $0.95 a share, up 13.10% from the same quarter last year when the company earned $0.84.
• Men's Wearhouse Inc. (MW). Expected to report Q4 earnings of $0.17 a share.
• American Eagle Outfitters Inc. (AEO). Expected to report Q4 earnings of $0.66 a share, according to analysts polled by Thomson Financial.
• Gymboree Corp. (GYMB). Expected to post Q4 profit of $0.95 a share, up 13.10% from the same quarter last year when the company earned $0.84.
• Men's Wearhouse Inc. (MW). Expected to report Q4 earnings of $0.17 a share.
Today's Top Stories....
• Mortgage applications for week to March 7 fall 1.9% on lower refinancing
• Boeing reiterates 787 schedule after Goldman Sachs warns of further delays - report
• Wyeth withdraws application for EU approval of hot flashes treatment
• Coach names ex-COO of Limited Brands its executive officer, effective March 17
• Kroger cut to 'underweight' by JP Morgan on likely underperformance
• Ruddick upped to 'overweight' at JP Morgan on growth prospects
• Toyota to raise monthly salaries by average 7,900 yen
• AstraZeneca's Seroquel patent infringement trial to start Aug. 11
• Boeing reiterates 787 schedule after Goldman Sachs warns of further delays - report
• Wyeth withdraws application for EU approval of hot flashes treatment
• Coach names ex-COO of Limited Brands its executive officer, effective March 17
• Kroger cut to 'underweight' by JP Morgan on likely underperformance
• Ruddick upped to 'overweight' at JP Morgan on growth prospects
• Toyota to raise monthly salaries by average 7,900 yen
• AstraZeneca's Seroquel patent infringement trial to start Aug. 11
Tuesday's Summary....
U.S. Markets
Dow +416.7 (+3.55%)
Nasdaq +86.4 (+3.98%)
S&P 500 +47.4 (+3.71%)
News That Moved the Market
Markets Surge. Tuesday's gains were the most since 2003. The market was propelled higher after the Fed announced a new Term Security Lending Facility, allowing borrowers to pledge a large assortment of debt securities as collateral including privately rated AAA mortgage backed securities. The plan will increase liquidity and generate more value for mortgage backed securities, which have become a thinly traded asset. The plan includes also raising the swap lines with the ECB and Swiss National Bank, putting an extra $12 billion into the U.S. markets. The markets opened sharply higher, and finished strong, with financials (+7.4%) leading the charge. Volume was high and for any technical analysis followers, Tuesday's jumps may have also created a double bottom, a very bullish signal.
Wellpoint Causes Health Insurer Sell-Off. Wellpoint (WLP, -28.31%) slashed its full-year guidance to $5.76 - $6.01/share from $6.41/share. The new forecast was well below analysts' estimates and caused a massive sell-off of all the large health insurers; UnitedHealth Group (UNH, -15.2%) and Humana (HUM, -24.7%) finished with massive losses as well.
Quick Tics:
Google's (GOOG, +6.3%) acquisition of DoubleClick was approved by European regulators…
Crude-oil futures ended the session at a new record closing high of $108.75/barrel..
Texas Instruments (TXN, -3.0%) lowered its first-quarter earnings forecast, the company's shares hit a 52-week low.
Wednesday's Notable Earnings
Hot Topic (HOTT) After Close
American Eagle Outfitters Inc (AEO) Before Open
Economic Events:
10:30 AM: Crude Inventories
Dow +416.7 (+3.55%)
Nasdaq +86.4 (+3.98%)
S&P 500 +47.4 (+3.71%)
News That Moved the Market
Markets Surge. Tuesday's gains were the most since 2003. The market was propelled higher after the Fed announced a new Term Security Lending Facility, allowing borrowers to pledge a large assortment of debt securities as collateral including privately rated AAA mortgage backed securities. The plan will increase liquidity and generate more value for mortgage backed securities, which have become a thinly traded asset. The plan includes also raising the swap lines with the ECB and Swiss National Bank, putting an extra $12 billion into the U.S. markets. The markets opened sharply higher, and finished strong, with financials (+7.4%) leading the charge. Volume was high and for any technical analysis followers, Tuesday's jumps may have also created a double bottom, a very bullish signal.
Wellpoint Causes Health Insurer Sell-Off. Wellpoint (WLP, -28.31%) slashed its full-year guidance to $5.76 - $6.01/share from $6.41/share. The new forecast was well below analysts' estimates and caused a massive sell-off of all the large health insurers; UnitedHealth Group (UNH, -15.2%) and Humana (HUM, -24.7%) finished with massive losses as well.
Quick Tics:
Google's (GOOG, +6.3%) acquisition of DoubleClick was approved by European regulators…
Crude-oil futures ended the session at a new record closing high of $108.75/barrel..
Texas Instruments (TXN, -3.0%) lowered its first-quarter earnings forecast, the company's shares hit a 52-week low.
Wednesday's Notable Earnings
Hot Topic (HOTT) After Close
American Eagle Outfitters Inc (AEO) Before Open
Economic Events:
10:30 AM: Crude Inventories
Tuesday, March 11, 2008
Monday, March 10, 2008
Monday's Trading Summary...
U.S. Markets
Dow -153.54 (-1.29%)
Nasdaq -43.15 (-1.95%)
S&P 500 -20.00 (-1.55%)
News That Moved the Market
Financials Push Markets Down Further. Stocks finished sharply lower Monday, with more bad news coming out of the financial sector. Bear Stearns (BSC, -11.1%) fell the most in 10 years after rumors spread that the company has liquidity issues. "There's an insolvency rumor and concerns on liquidity, that they just have no cash," said Michael Mainwald, head of equity trading at Lek Securities Corp. A spokesman for Bear said that there is "no truth" to the rumors, but the trust in the banks has disappeared in the last couple months and investors were noticeably rattled. Citigroup (C, -5.8%) fell under $20, to its lowest levels since 1998.
Lehman Brothers (LEH, -7.3%) announced plans to cut another 5% of its work force, citing weak credit markets and a slowing economy. Markets finished near their lows, with the financial sector ending down 2.0%.
Blackstone's Profits Plunge. Blackstone (BX, +2.9%) reported an 89% decrease in profits this morning. The company was hurt by its holdings in FGIC, the troubled bond insurer. The company's stock hit an all-time low, before finding bidders late in the session, and said it sees difficult market conditions continuing in 2008.
FBI Targets Countrywide, Subprime Lenders. Countrywide (CFC, -14.0%) lost more ground after The Wall Street Journal reported the company, along with 15 other subprime lenders, is under an FBI investigation. The FBI is taking a broad look at the subprime industry as a whole for fraud and other unlawful practices. The investigation is still in its early stages.
Goldman Sees FOMC Cutting Rates By 1.0% In Two Meetings. Goldman Sachs (GS, -2.8%) sees the FOMC dropping interest rates a full point by late April. There were talks of an intermeeting cut before next week's official FOMC meeting, but few really believe the Fed would think the situation is so dire, that it could not wait one week.
Quick Tics:
McDonalds (MCD, +2.9%) reported strong same store sales growth
NY Governor Eliot Spitzer has been linked to a prostitution ring
Oil closed up nearly 3% to $107.90/barrel.
TomorrowNotable Earnings
Boston Beer Company (SAM) Time Not Supplied
J. Crew Group, Inc. (JCG) After Close
Take-Two Interactive Software (TTWO) After Close
The Kroger Co. (KR) Before Open
Economic Events:
8:30 AM: Trade Balance
Dow -153.54 (-1.29%)
Nasdaq -43.15 (-1.95%)
S&P 500 -20.00 (-1.55%)
News That Moved the Market
Financials Push Markets Down Further. Stocks finished sharply lower Monday, with more bad news coming out of the financial sector. Bear Stearns (BSC, -11.1%) fell the most in 10 years after rumors spread that the company has liquidity issues. "There's an insolvency rumor and concerns on liquidity, that they just have no cash," said Michael Mainwald, head of equity trading at Lek Securities Corp. A spokesman for Bear said that there is "no truth" to the rumors, but the trust in the banks has disappeared in the last couple months and investors were noticeably rattled. Citigroup (C, -5.8%) fell under $20, to its lowest levels since 1998.
Lehman Brothers (LEH, -7.3%) announced plans to cut another 5% of its work force, citing weak credit markets and a slowing economy. Markets finished near their lows, with the financial sector ending down 2.0%.
Blackstone's Profits Plunge. Blackstone (BX, +2.9%) reported an 89% decrease in profits this morning. The company was hurt by its holdings in FGIC, the troubled bond insurer. The company's stock hit an all-time low, before finding bidders late in the session, and said it sees difficult market conditions continuing in 2008.
FBI Targets Countrywide, Subprime Lenders. Countrywide (CFC, -14.0%) lost more ground after The Wall Street Journal reported the company, along with 15 other subprime lenders, is under an FBI investigation. The FBI is taking a broad look at the subprime industry as a whole for fraud and other unlawful practices. The investigation is still in its early stages.
Goldman Sees FOMC Cutting Rates By 1.0% In Two Meetings. Goldman Sachs (GS, -2.8%) sees the FOMC dropping interest rates a full point by late April. There were talks of an intermeeting cut before next week's official FOMC meeting, but few really believe the Fed would think the situation is so dire, that it could not wait one week.
Quick Tics:
McDonalds (MCD, +2.9%) reported strong same store sales growth
NY Governor Eliot Spitzer has been linked to a prostitution ring
Oil closed up nearly 3% to $107.90/barrel.
TomorrowNotable Earnings
Boston Beer Company (SAM) Time Not Supplied
J. Crew Group, Inc. (JCG) After Close
Take-Two Interactive Software (TTWO) After Close
The Kroger Co. (KR) Before Open
Economic Events:
8:30 AM: Trade Balance
FBI Probes Countrywide...
The FBI has opened a criminal inquiry to probe whether Countrywide Financial (CFC) intentionally misrepresented its financial condition in SEC filings. The FBI is investigating more than a dozen subprime lenders' origination and securitization processes, and probing possible conflicts of interest between lenders and investors.
If Countrywide is found guilty of fraud, it could scuttle a planned $4B acquisition of the company by Bank of America (BAC).
If Countrywide is found guilty of fraud, it could scuttle a planned $4B acquisition of the company by Bank of America (BAC).
Earnings Due Today....
COMPANIES REPORTING EARNINGS
• Foot Locker Inc. (FL). Expected to report Q4 earnings of $0.44 a share, according to analysts polled by Thomson Financial. This is a decrease of 36.71% from the same quarter last year when the company earned $0.70.
• Inter Parfums Inc. (IPAR). Expected to post Q4 earnings of $0.34 a share, up 25.93% from the same quarter last year when the company earned $0.27.
• The Blackstone Group (BX). Expected to post Q4 earnings of $0.29 a share.
• Vail Resorts (MTN). Expected to report Q2 earnings of $1.35 a share.
• Foot Locker Inc. (FL). Expected to report Q4 earnings of $0.44 a share, according to analysts polled by Thomson Financial. This is a decrease of 36.71% from the same quarter last year when the company earned $0.70.
• Inter Parfums Inc. (IPAR). Expected to post Q4 earnings of $0.34 a share, up 25.93% from the same quarter last year when the company earned $0.27.
• The Blackstone Group (BX). Expected to post Q4 earnings of $0.29 a share.
• Vail Resorts (MTN). Expected to report Q2 earnings of $1.35 a share.
This Morning's Top Stories...
• Morgan Stanley cuts 2008 earnings estimates on raft of large-cap banks
• Chevron to develop LNG facility in Australia
• Siemens eager to settle with SEC before presidential election - report
• Nationwide Financial Services gets buyout offer from parent
• Wyeth to invest $280 million in Chinese nutritional manufacturing plant
• Chevron to develop LNG facility in Australia
• Siemens eager to settle with SEC before presidential election - report
• Nationwide Financial Services gets buyout offer from parent
• Wyeth to invest $280 million in Chinese nutritional manufacturing plant
Friday, March 7, 2008
Ciena Net Income Nearly Triples...
Ciena posts net income to $28.8 million, or 28¢ a share, amid increasing demand for gear allowing network operators to handle more traffic at lower costs. Excluding items, EPS jumps to 47¢; analysts expected 40¢. Shares rise 4% pre-market.
C'mon Ciena...we're not supposed to have good news...only the bad stuff...
C'mon Ciena...we're not supposed to have good news...only the bad stuff...
Fed Moves to Bolster Liquidity...
To address heightened liquidity pressures in term funding markets, the Fed will increase the amounts outstanding in the Term Auction Facility to $100 billion. It also will initiate a series of term repurchase transactions that are expected to amount to $100 billion.
US Payrolls Fall, Raising Odds for Recession...
U.S. recession fears mount as employment falls by 63,000 in February, its fastest rate in five years, suggesting that the housing and credit crunch is gripping the broader economy. Unemployment rate surprisingly ticks down to 4.8%, triggered by a 450,000 decline in the size of the labor force, not a rise in employment. Data support expectations for additional Fed rate cuts.
Marvell Beats, but Conference Call Spooks...
Marvell (MRVL) blasted past expectations with Q4 EPS of $0.20 vs. consensus of $0.11 and revenue of $845M vs. consensus of $783M. After gaining 6% in AH trading, things got ugly during the conference call after MRVL said 2008 costs would be higher than expected, and declined to offer a full-year forecast due to broad economic uncertainty.
Shares ended -5.4% in extended trading.
Shares ended -5.4% in extended trading.
National Semi Soars on Margin Surprise...
National Semiconductor (NSM) posted FQ3 EPS of $0.28, better than consensus estimates of $0.24. Revenue was just short at $453.4M. NSM sees Q4 revenue of $440M-$460M, short of consensus estimates of $470.3M. NSM said Q3 bookings declined sequentially by approximately 14%, due primarily to weak orders for wireless handsets and personal mobile devices. But gross margins "held up well," it said, at 64.3%, up from 59.8% Y/Y.
Shares jumped 9.5% in AH trading.
Shares jumped 9.5% in AH trading.
Retail Sales Encourage....
Retail sales in February largely beat expectations. Same-store sales were up 1.9%, led by a 2.6% increase at Wal-Mart (WMT). Still, stores continue to expect a rough spring, and a number of retailers have stopped reporting monthly comps in order to focus on long-term strategy. "These month-to-month blips don't change the trend," economist Frank Badillo said. "
Shoppers are intent on slowing their spending, and that will continue in the months ahead." Analysts noted sales at discounters (WMT, FDO) were stronger than at middle-end retailers (TGT, JCP, KSS).
Shoppers are intent on slowing their spending, and that will continue in the months ahead." Analysts noted sales at discounters (WMT, FDO) were stronger than at middle-end retailers (TGT, JCP, KSS).
iPhone SDK Wows...
Apple's iPhone SDK impressed developers, who said the tool addresses all three core groups: Developers, IT departments, and end-users. Developers liked the functionality of iPhone APIs, and the ability to store data using popular SQL Lite. Apple is licensing technology from Microsoft (MSFT) that will enable it to interact with Microsoft Exchange, and will enable "wipe and lock" and "on-device data encryption" along with other IT tools.
Consumers get push email that turns the iPhone into an instant BlackBerry (RIMM) rival. What's still missing? Multiple carriers, and corporate management tools.
Consumers get push email that turns the iPhone into an instant BlackBerry (RIMM) rival. What's still missing? Multiple carriers, and corporate management tools.
Sony, Microsoft Talk Blu-Ray....
Sony (SNE) is in talks with Microsoft (MSFT) about a Xbox 360 Blu-ray drive. On the one hand, Sony has touted the now de-facto standard Blu-ray as one of its PS3's advantages over the Xbox; on the other, the revenue from a Microsoft deal might be irresistible. Sony also said it has had discussions with Apple (AAPL), which has yet to offer Blu-ray drives on its computers.
Thursday, March 6, 2008
Thursday's Market Summary....
U.S. Markets
Dow -214.60 (-1.75%)
Nasdaq -52.31 (-2.30%)
S&P 500 -29.36 (-2.20%)
News That Moved the Market
More Financial Woes Hit Stocks. The markets opened down and never were able to recover after numerous companies in the financial sector came out with bad news. Thornburg Mortgage (TMA, -51.5%) plummeted after its ratings were downgraded by the main ratings agencies. The company disclosed it was not able to meet a margin call of $28 million, triggering defaults in other lending agreements. Washington Mutual (WM, -8.1%) fell following S&P's downgrade of the company, citing a "severe residential mortgage credit cycle" as the catalyst for decision. WaMu was placed on CreditWatch with negative implications. Major indices finished near their lows, w ith the Dow closing just above 12,000. Whether it holds it tomorrow will be an important mental threshold for investors.
Foreclosures Spike. U.S. mortgage foreclosures hit all-time high at the end of last year, according to the Mortgage Bankers Association. New foreclosures increased to 0.83% of all home loans last quarter, with late payment jumping to a 23-year high.
Citi To Cut Mortgage Holdings by 20%. Citigroup (C, -4.4%) announced it will decrease its mortgage assets by $45 billion over the next year. The company will make fewer loans that it cannot sell.
Retail Sales Better Than Expected. Wal-Mart (WMT, +0.86%) reported higher than expected February sales, as more consumers turned to the low cost retailer. U.S. retailers' same store sales increased by 1.9%, beating estimates. About 60% of retailers reported higher than anticipated sales.
Quick Tics:
Merrill Lynch (MER, -7.0%) will exit the subprime lending industry
Crude increased to $105.47, up $0.95.
Tomorrow Notable Earnings
NONE
Economic Events:
8:30 AM: Jobs Report
3:00 PM: Consumer Credit
Dow -214.60 (-1.75%)
Nasdaq -52.31 (-2.30%)
S&P 500 -29.36 (-2.20%)
News That Moved the Market
More Financial Woes Hit Stocks. The markets opened down and never were able to recover after numerous companies in the financial sector came out with bad news. Thornburg Mortgage (TMA, -51.5%) plummeted after its ratings were downgraded by the main ratings agencies. The company disclosed it was not able to meet a margin call of $28 million, triggering defaults in other lending agreements. Washington Mutual (WM, -8.1%) fell following S&P's downgrade of the company, citing a "severe residential mortgage credit cycle" as the catalyst for decision. WaMu was placed on CreditWatch with negative implications. Major indices finished near their lows, w ith the Dow closing just above 12,000. Whether it holds it tomorrow will be an important mental threshold for investors.
Foreclosures Spike. U.S. mortgage foreclosures hit all-time high at the end of last year, according to the Mortgage Bankers Association. New foreclosures increased to 0.83% of all home loans last quarter, with late payment jumping to a 23-year high.
Citi To Cut Mortgage Holdings by 20%. Citigroup (C, -4.4%) announced it will decrease its mortgage assets by $45 billion over the next year. The company will make fewer loans that it cannot sell.
Retail Sales Better Than Expected. Wal-Mart (WMT, +0.86%) reported higher than expected February sales, as more consumers turned to the low cost retailer. U.S. retailers' same store sales increased by 1.9%, beating estimates. About 60% of retailers reported higher than anticipated sales.
Quick Tics:
Merrill Lynch (MER, -7.0%) will exit the subprime lending industry
Crude increased to $105.47, up $0.95.
Tomorrow Notable Earnings
NONE
Economic Events:
8:30 AM: Jobs Report
3:00 PM: Consumer Credit
A Commodity Linked CD....
Now I've seen it all. Take a look at this CD that just came out. It is tied to the performance of Commodities.
Silverton Bank Commodity Linked CD
Maturity 9/30/2013
If held to maturity, purchasers get their original investment back plus a return of 125% of a basket tied to the performance of the following commodities:
Crude Oil, Coal, Copper, and the Live Cattle Index.
Smells like a top in Commodities to me.....
Silverton Bank Commodity Linked CD
Maturity 9/30/2013
If held to maturity, purchasers get their original investment back plus a return of 125% of a basket tied to the performance of the following commodities:
Crude Oil, Coal, Copper, and the Live Cattle Index.
Smells like a top in Commodities to me.....
More Doom and Gloom...
The percentage of mortgages that were in foreclosure hit a record high in the fourth quarter, while mortgage delinquencies rose to a 23-year high, the Mortgage Bankers Association said Thursday. A record 2.04% of U.S. mortgages were somewhere in the foreclosure process at the end of the year, while a record-high 0.83% of loans entered foreclosure in the fourth quarter, the trade group's quarterly survey found. More homeowners fell behind on payments as well, with 5.82% of loans past due in the quarter. That was the highest delinquency rate since 1983. MBA Chief Economist Doug Duncan said declining home prices were the driving force behind the foreclosure record.
Really??? This is surprising....I would have thought it was more like 60% of the mortgages out there are in the foreclosure process....:-)
Really??? This is surprising....I would have thought it was more like 60% of the mortgages out there are in the foreclosure process....:-)
Will there be ANY Banks or Mortgage Companies This Time Next Year???
Maybe all of them will go out of business.... People will no longer be able to buy a home and we will have to keep our money in our mattresses.
That's the mentality now!!!
This is about the worst sentiment I've ever seen on a sector. I would say we are VERY close to a complete washout...which means we are VERY close to a bottom.
That's the mentality now!!!
This is about the worst sentiment I've ever seen on a sector. I would say we are VERY close to a complete washout...which means we are VERY close to a bottom.
Technical Alert: Akamai Breaking Out...
Akamai (AKAM) is breaking out of a nice cup and handle formation this morning.
The stock is up .91 to $35.72 on decent volume. While the stock looks good here, a break above longer term resistance at $38 would be a more significant BUY signal.
The stock is up .91 to $35.72 on decent volume. While the stock looks good here, a break above longer term resistance at $38 would be a more significant BUY signal.
Joy Global In-Line, But Raises Guidance...
Joy Global Corp.'s (JOYG) fiscal first-quarter net income rose 19% as sales climbed amid demand sparked by the continuing commodities boom abroad and "improving conditions" in the U.S. coal market.
The company boosted its fiscal-year earnings outlook, saying due to high coal prices the outlook for mining equipment looks "robust." Joy said global capacity constraints leave the U.S. the only country with the potential to substantially boost coal output - just as markets around the world are begging for more. "The U.S. has gone from being a regional market to being the swing supplier to the international coal market," the company said. U.S. coal exports rose 10 million tons in 2007, and Joy expects that rise to continue.
The heavy-mining equipment manufacturer reported net income for the quarter ended Feb. 1 of $71.1 million, or 65 cents a share, compared with $59.7 million, or 51 cents a share a year earlier. The latest quarter's results included 1 cent in earnings from discontinued operations. Revenue rose 14% to $640.3 million.
The mean per-share earnings estimate of analysts polled by Thomson Financial was 65 cents on revenue of $639 million.
The company boosted its fiscal-year earnings outlook, saying due to high coal prices the outlook for mining equipment looks "robust." Joy said global capacity constraints leave the U.S. the only country with the potential to substantially boost coal output - just as markets around the world are begging for more. "The U.S. has gone from being a regional market to being the swing supplier to the international coal market," the company said. U.S. coal exports rose 10 million tons in 2007, and Joy expects that rise to continue.
The heavy-mining equipment manufacturer reported net income for the quarter ended Feb. 1 of $71.1 million, or 65 cents a share, compared with $59.7 million, or 51 cents a share a year earlier. The latest quarter's results included 1 cent in earnings from discontinued operations. Revenue rose 14% to $640.3 million.
The mean per-share earnings estimate of analysts polled by Thomson Financial was 65 cents on revenue of $639 million.
Blockbuster Reports In-Line Earnings...
Blockbuster Inc.'s (BBI) fourth-quarter net income more than tripled as operating expenses fell and rental revenue jumped 11%. The company said its 2007 was a year of "transition" and that it expects to return to profitability in 2008 - forecasting net income where analysts had seen a loss. Blockbuster's shares rose in premarket trading.
The movie rental company reported net income of $41 million, or 18 cents a share, compared with $11.2 million, or 4 cents a share, a year earlier. Excluding charges, per-share earnings rose to 26 cents from 11 cents. Revenue grew 3.6% to $1.57 billion.
The mean per-share earnings estimate of analysts polled by Thomson Financial was 18 cents on revenue of $1.44 billion.
Makes sense....People aren't going to stop watching movies....they'll just stay at home and rent...NetFlix beat estimates recently and raised their guidance....looks like a trend to me.
The movie rental company reported net income of $41 million, or 18 cents a share, compared with $11.2 million, or 4 cents a share, a year earlier. Excluding charges, per-share earnings rose to 26 cents from 11 cents. Revenue grew 3.6% to $1.57 billion.
The mean per-share earnings estimate of analysts polled by Thomson Financial was 18 cents on revenue of $1.44 billion.
Makes sense....People aren't going to stop watching movies....they'll just stay at home and rent...NetFlix beat estimates recently and raised their guidance....looks like a trend to me.
ViewSonic Pulls IPO...
ViewSonic Corp. The Walnut, CA-based provider of visual display technology Wednesday withdrew its $143.75 million worth intial public offering with the U.S. Securities and Exchange Commission, saying the current market terms are not attractive.
Earnings Today....
COMPANIES REPORTING EARNINGS
Blockbuster Inc. (BBI). Expected to report Q4 earnings of $0.18 a share, according to analysts polled by Thomson Financial. This is an increase of 101.11% from the same quarter last year when the company earned $0.09.
Casey's General Stores Inc. (CASY). Expected to post Q3 earnings of $0.28 per share, up 25.45% from the same quarter last year when the company earned $0.22.
Joy Global Inc. (JOYG). Expected to post Q1 earnings of $0.65 per share, up 27.06% from the same quarter last year when the company earned $0.51.
Marvell Technology Group Ltd. (MRVL). Expect to report Q4 earnings of $0.11 per share, an increase of 266.67% from the same quarter last year when the company earned $0.03.
National Semiconductor Corp. (NSM). Expected to report Q3 earnings of $0.24 per share, up 6.82% from the same quarter last year when the company earned $0.22.
The Cooper Cos. Inc. (COO). Expected to post Q1 earnings of $0.45 per share, down 6.04% from the same quarter last year when the company earned $0.48.
Wind River Systems Inc. (WIND). Expected to post Q4 earnings of $0.09 per share, down 15.00% from the
Blockbuster Inc. (BBI). Expected to report Q4 earnings of $0.18 a share, according to analysts polled by Thomson Financial. This is an increase of 101.11% from the same quarter last year when the company earned $0.09.
Casey's General Stores Inc. (CASY). Expected to post Q3 earnings of $0.28 per share, up 25.45% from the same quarter last year when the company earned $0.22.
Joy Global Inc. (JOYG). Expected to post Q1 earnings of $0.65 per share, up 27.06% from the same quarter last year when the company earned $0.51.
Marvell Technology Group Ltd. (MRVL). Expect to report Q4 earnings of $0.11 per share, an increase of 266.67% from the same quarter last year when the company earned $0.03.
National Semiconductor Corp. (NSM). Expected to report Q3 earnings of $0.24 per share, up 6.82% from the same quarter last year when the company earned $0.22.
The Cooper Cos. Inc. (COO). Expected to post Q1 earnings of $0.45 per share, down 6.04% from the same quarter last year when the company earned $0.48.
Wind River Systems Inc. (WIND). Expected to post Q4 earnings of $0.09 per share, down 15.00% from the
Headlines That May Move the Market.....
-Wal-Mart Feb. same-store sales up 2.6%, ahead of Wall St. view
-Oil soars above $105 a barrel as NY blast sparks jitters
-Euro hits new high of $1.5347 against dollar ahead of ECB decision
-Joy Global Q1 net rises to $71 million
-Limited Brands Feb. same-store sales down 9%
-Afren to buy Devon Energy's interest in Cote d'Ivoire for $205 million
-Ingersoll-Rand backs 2008 earnings, revenue forecasts
-McDermott raised to 'buy' at Citi on Qatar project hopes, good results
-Novartis cancer drug Gleevec may harm fetus development - study
-McAfee plans further acquisitions
-Saks cut to 'neutral' at Bank of America; price target slashed to $13
-Oil soars above $105 a barrel as NY blast sparks jitters
-Euro hits new high of $1.5347 against dollar ahead of ECB decision
-Joy Global Q1 net rises to $71 million
-Limited Brands Feb. same-store sales down 9%
-Afren to buy Devon Energy's interest in Cote d'Ivoire for $205 million
-Ingersoll-Rand backs 2008 earnings, revenue forecasts
-McDermott raised to 'buy' at Citi on Qatar project hopes, good results
-Novartis cancer drug Gleevec may harm fetus development - study
-McAfee plans further acquisitions
-Saks cut to 'neutral' at Bank of America; price target slashed to $13
TiVo Pares Losses....
Shares of TiVo Inc. (TIVO) rose 4.8% to $8.53 after the company reported that its fourth-quarter loss narrowed to 6 cents a share from 20 cents a share in the prior year, on better-than-anticipated sales of its standard digital video recorders.
Analysts polled by FactSet Research were expecting a loss of 11 cents a share.
The Alviso, Calif., digital recording technology company's service and technology revenue rose to $58.1 million from $57 million. For the quarter ending in April, TiVo expects to post a net loss of $1 million to $3 million on service and technology revenue of $53 million to $55 million.
Analysts polled by FactSet Research were expecting a loss of 11 cents a share.
The Alviso, Calif., digital recording technology company's service and technology revenue rose to $58.1 million from $57 million. For the quarter ending in April, TiVo expects to post a net loss of $1 million to $3 million on service and technology revenue of $53 million to $55 million.
Coldwater Creek Tumbles....
Shares of Coldwater Creek Inc. (CWTR) dropped to $4.37 after the company released disappointing first-quarter guidance. The company expects to report a first-quarter loss of 14 cents to 17 cents a share, below analysts' average estimate of a per-share loss of 4 cents.
The company also reported a fourth-quarter net loss of 19 cents a share compared with a net income of 17 cents a share a year earlier. Revenue totaled $345.5 million, decreasing from $366.6 million a year ago, the Sandpoint, Idaho apparel retailer said.
Analysts had forecast a net loss of 19 cents a share.
The company also reported a fourth-quarter net loss of 19 cents a share compared with a net income of 17 cents a share a year earlier. Revenue totaled $345.5 million, decreasing from $366.6 million a year ago, the Sandpoint, Idaho apparel retailer said.
Analysts had forecast a net loss of 19 cents a share.
Harris Corp Raises Guidance..
Shares of Harris Corp. (HRS) rose 4.2% to $49.48 after the company said it expects fiscal 2009 earnings of $4 to $4.10 a share on revenue of $5.7 billion to $5.8 billion, driven by growth across all operating segments as a result of demand for its information-technology products and services.
Analysts had expected, according to a poll by Thomson Financial, earnings of $3.95 a share on $5.71 billion in revenue.
The Melbourne, Fla., communications equipment said it expects to finish fiscal 2008 with a substantial backlog, which is expected to drive double-digit revenue growth in RF Communications in fiscal 2009. The company also said it expects top-line growth and improved operating performance in its two commercial businesses in the fiscal year ending June 30, 2009.
Analysts had expected, according to a poll by Thomson Financial, earnings of $3.95 a share on $5.71 billion in revenue.
The Melbourne, Fla., communications equipment said it expects to finish fiscal 2008 with a substantial backlog, which is expected to drive double-digit revenue growth in RF Communications in fiscal 2009. The company also said it expects top-line growth and improved operating performance in its two commercial businesses in the fiscal year ending June 30, 2009.
Thornburg Crushed After Hours....
Shares of Thornburg Mortgage Inc. (TMA) plunged 44% to $1.92 in after-hours trading after the home-mortgage lender late Wednesday disclosed that its failure to meet a $28 million margin call caused a series of cross-defaults. Thornburg also said JPMorgan Chase Bank N.A., which made the original margin call, will "exercise its rights."
In Wednesday's disclosure, Thornburg didn't specify those rights, but in a previous filing with the Securities and Exchange Commission the company said that the lender has the "right to liquidate pledged collateral." Thornburg said it was loaned $320 million under reverse repurchase agreements made with JPMorgan.
The notice of default from JPMorgan triggered cross-defaults "under all of the Company's other reverse repurchase agreements and its secured loan agreements," the company said in Wednesday's filing. Thornburg offered no description of the amounts involved in the cross-defaults, but said its "obligations under those agreements are material."
In Wednesday's disclosure, Thornburg didn't specify those rights, but in a previous filing with the Securities and Exchange Commission the company said that the lender has the "right to liquidate pledged collateral." Thornburg said it was loaned $320 million under reverse repurchase agreements made with JPMorgan.
The notice of default from JPMorgan triggered cross-defaults "under all of the Company's other reverse repurchase agreements and its secured loan agreements," the company said in Wednesday's filing. Thornburg offered no description of the amounts involved in the cross-defaults, but said its "obligations under those agreements are material."
PetsMart Profit Margin Falls...
PetSmart Inc. (PETM), which is hurting from soft consumer spending, posted a 2% drop in fiscal fourth-quarter net income as its profit margin fell and said it would slow capital spending as it tries to improve performance at its stores.
The nation's largest pet-food and supplies chain said Wednesday that net income for the quarter ended Feb. 3 fell to $75.4 million from $77 million. Earnings per share rose to 59 cents a share from 56 cents a share.
In January, PetSmart slashed its earnings forecast by 13 cents a share to a range of 57 cents to 61 cents a share, blaming weak sales and a challenging retail climate.
The latest results included costs to exit the State Line Tack business. Excluding those costs and an extra week of sales, earnings came to 52 cents a share. Net sales in the latest quarter rose 14% to $1.33 billion, with a $90 million benefit from an extra week of sales.
The latest forecast from analysts polled by Thomson Financial was for earnings, excluding items, of 59 cents a share on revenue of $1.33 billion.
The nation's largest pet-food and supplies chain said Wednesday that net income for the quarter ended Feb. 3 fell to $75.4 million from $77 million. Earnings per share rose to 59 cents a share from 56 cents a share.
In January, PetSmart slashed its earnings forecast by 13 cents a share to a range of 57 cents to 61 cents a share, blaming weak sales and a challenging retail climate.
The latest results included costs to exit the State Line Tack business. Excluding those costs and an extra week of sales, earnings came to 52 cents a share. Net sales in the latest quarter rose 14% to $1.33 billion, with a $90 million benefit from an extra week of sales.
The latest forecast from analysts polled by Thomson Financial was for earnings, excluding items, of 59 cents a share on revenue of $1.33 billion.
Wednesday, March 5, 2008
Wednesday's Summary....
U.S. Markets
Dow +41.19 (+0.34%)
Nasdaq +12.53 (+0.55%)
S&P 500 +6.95 (+0.52%)
News That Moved the Market
Markets End Up After Digesting Ambac News. The markets finished the day up, but that was not before it tested the previous day's lows. For much of the day, most of the attention went to Ambac (ABK, -19.8%), which announced plans to raised $1.5 billion through sales of common shares and equity units. After the announcement, markets seemed disappointed with the news. Investors were looking for a true bailout that would solidify the company's balance sheet and extinguish concerns that Ambac would lose its AAA rating. Though S&P and Moody's did say they would probably confirm the bond insurer's AAA rating, the let down from the announcement pushed the markets down in the middle of the day. But like yesterday, the bottom fishers grabbed control in the afternoon and pushed the major indices back into the green to end the day.
Oil Rallies Off Inventory Decline. Crude spiked to a new record high of $104.95, before closing at $104.45. The jump was caused by OPEC's announcement that it will leave productions levels unchanged and an unexpected decline in inventories.
ISM Services Data Gives Market Hope. Before the bell the ADP Employment Report showed an unexpected decline in payrolls. Markets mostly shrugged off the figure and will pay much closer to Friday's Job's Report. The Institute for Supply Management services index data was better than expected and provided a much needed positive piece of economic data; markets were higher immediately after the announcement. Factory orders were also released, and were in-line with forecasts.
Quick Tics:
The Fed Beige Book survey showed economic growth has slowed, with 8 of the 12 Fed regional banks noticing a "weakening in the pace of business activity."
Goldman Sachs (GS, +0.7%) CEO Lloyd Blankfein believes the credit-market contraction is at least half way over.
Big Lots (BIG, +22.2%) jumped after increasing its 2008 profits forecasts.
Tomorrow Notable Earnings
Marvell Technology Group Ltd. (MRVL) After Close
National Semiconductor (NSM) After Close
Urban Outfitters (URBN) Before Open
Economic Events:
Chain Store Sales
Bank of England and European Central Bank Announcements
8:30 AM: Job Claims
10:00 AM: Pending Home Sales
Dow +41.19 (+0.34%)
Nasdaq +12.53 (+0.55%)
S&P 500 +6.95 (+0.52%)
News That Moved the Market
Markets End Up After Digesting Ambac News. The markets finished the day up, but that was not before it tested the previous day's lows. For much of the day, most of the attention went to Ambac (ABK, -19.8%), which announced plans to raised $1.5 billion through sales of common shares and equity units. After the announcement, markets seemed disappointed with the news. Investors were looking for a true bailout that would solidify the company's balance sheet and extinguish concerns that Ambac would lose its AAA rating. Though S&P and Moody's did say they would probably confirm the bond insurer's AAA rating, the let down from the announcement pushed the markets down in the middle of the day. But like yesterday, the bottom fishers grabbed control in the afternoon and pushed the major indices back into the green to end the day.
Oil Rallies Off Inventory Decline. Crude spiked to a new record high of $104.95, before closing at $104.45. The jump was caused by OPEC's announcement that it will leave productions levels unchanged and an unexpected decline in inventories.
ISM Services Data Gives Market Hope. Before the bell the ADP Employment Report showed an unexpected decline in payrolls. Markets mostly shrugged off the figure and will pay much closer to Friday's Job's Report. The Institute for Supply Management services index data was better than expected and provided a much needed positive piece of economic data; markets were higher immediately after the announcement. Factory orders were also released, and were in-line with forecasts.
Quick Tics:
The Fed Beige Book survey showed economic growth has slowed, with 8 of the 12 Fed regional banks noticing a "weakening in the pace of business activity."
Goldman Sachs (GS, +0.7%) CEO Lloyd Blankfein believes the credit-market contraction is at least half way over.
Big Lots (BIG, +22.2%) jumped after increasing its 2008 profits forecasts.
Tomorrow Notable Earnings
Marvell Technology Group Ltd. (MRVL) After Close
National Semiconductor (NSM) After Close
Urban Outfitters (URBN) Before Open
Economic Events:
Chain Store Sales
Bank of England and European Central Bank Announcements
8:30 AM: Job Claims
10:00 AM: Pending Home Sales
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