J. Crew Group may have a solid following among consumers, with a strong product lineup and brand identity, but BMO Capital said Wednesday that the retailer may have maxed out its growth opportunities for now.
THE OPINION: Analyst John Morris said J. Crew has delivered above-average returns recently as it captured market share from department stores but its strengths are already recognized in its stock price. And the company faces a tough second half of the year if the overall retail business slows.
THE STOCK: J. Crew's stock fell $1.96, more than 4 percent, to $42.73 in midday trading Wednesday. Morris lowered his rating on the company to "Market Perform" from "Outperform" and lowered his price target from $55 to $48. He also lowered its 2010 guidance to $2.45 from $2.50 and 2011 estimate to $2.82 from $2.92.
Wednesday, May 26, 2010
Apple overtakes Microsoft in Market Cap....
Apple, the maker of iPods, iPhones and iPads, overtook Microsoft, the computer software giant, on Wednesday to become the world’s most valuable technology company.
In intraday trading shortly after 2:30 p.m., Apple shares rose 1.8 percent, which gave the company a value of $227.1 billion. Shares of Microsoft declined about 1 percent, giving the company a market capitalization of $226.3 billion. (Let's see if it holds up).
The only American company valued higher is Exxon Mobil, with a market capitalization of $282 billion.
In intraday trading shortly after 2:30 p.m., Apple shares rose 1.8 percent, which gave the company a value of $227.1 billion. Shares of Microsoft declined about 1 percent, giving the company a market capitalization of $226.3 billion. (Let's see if it holds up).
The only American company valued higher is Exxon Mobil, with a market capitalization of $282 billion.
Why the VMWare move???
VMware Inc. shares rose Wednesday after an analyst upgraded the virtual desktop service provider, saying the company is in a better position than many other software companies.
THE SPARK: In a note to investors Wednesday, RBC Capital Markets analyst Robert Breza upgraded VMware shares to "Outperform" from "Sector Perform" and raised his price target by $12 to $75.
THE BIG PICTURE: Companies are shifting toward virtualization because it helps them cut data center costs. Instead of needing one server for each task, software such as that offered by VMware lets one server computer do many more things simultaneously. Virtualization is also extending beyond servers in data centers to applications and even whole desktops.
THE ANALYSIS: Breza said VMware is "one of the best-positioned software companies" and he expects it to gain from several technology trends in the next several years, such as growth in cloud-computing applications. He also thinks its enterprise license agreement is "under-appreciated by investors" and could result in the company raising its earnings estimates this year.
THE SPARK: In a note to investors Wednesday, RBC Capital Markets analyst Robert Breza upgraded VMware shares to "Outperform" from "Sector Perform" and raised his price target by $12 to $75.
THE BIG PICTURE: Companies are shifting toward virtualization because it helps them cut data center costs. Instead of needing one server for each task, software such as that offered by VMware lets one server computer do many more things simultaneously. Virtualization is also extending beyond servers in data centers to applications and even whole desktops.
THE ANALYSIS: Breza said VMware is "one of the best-positioned software companies" and he expects it to gain from several technology trends in the next several years, such as growth in cloud-computing applications. He also thinks its enterprise license agreement is "under-appreciated by investors" and could result in the company raising its earnings estimates this year.
NCR continues to go after DVD market....
Blockbuster's DVD vending machines will be installed at more than 100 grocery stores in Texas.
NCR Corp., which operates the rental kiosks for Blockbuster, said Wednesday that the machines will come to 105 Tom Thumb and Randalls stores in Dallas, Austin and Houston by the end of May as replacements for existing DVDPlay kiosks.
NCR bought DVDPlay in December, and since then has been working to replace DVDPlay kiosks with Blockbuster Express kiosks.
The kiosk rollout is part of Blockbuster's effort to catch up with Redbox, the Coinstar Inc. subsidiary that pioneered $1-per-night rentals from vending machines.
NCR Corp., which operates the rental kiosks for Blockbuster, said Wednesday that the machines will come to 105 Tom Thumb and Randalls stores in Dallas, Austin and Houston by the end of May as replacements for existing DVDPlay kiosks.
NCR bought DVDPlay in December, and since then has been working to replace DVDPlay kiosks with Blockbuster Express kiosks.
The kiosk rollout is part of Blockbuster's effort to catch up with Redbox, the Coinstar Inc. subsidiary that pioneered $1-per-night rentals from vending machines.
Market still up, but fading....
Stocks are paring their gains on Wednesday after investors bought shares of beaten-down companies following recent losses, and after new home sales rose last month to their highest in almost two years.
SXC Health Solutions...
SXCI is another stock I love. SXC Health Solutions Corp. provides pharmacy benefit management (PBM) services and healthcare information technology solutions in North America. Very strong earnings and revenue growth.
VM Ware Chart is looking strong....
The stock is now up 4.00 today to $65.30. You can see it is breaking out to New Highs.Amazon Kindle Losing momentum...
AMZN – from WSJ Heard on the Street; the Kindle is losing momentum to Apple and its
iPad and Touch; AMZN mgmt appeared to lower expectations for the Kindle at its
shareholder meeting Tues; AMZN valuation still rich.
iPad and Touch; AMZN mgmt appeared to lower expectations for the Kindle at its
shareholder meeting Tues; AMZN valuation still rich.
New Home Sales Better than Expected...
Apr. New Home Sales: +14.8% to 504K vs. 425K expected, 439K (revised) in March. Months' supply 5 vs. 6.7 prior. Median price $198,400.
Here's a Strange Story for you....
Apple Inc. said Wednesday that it is independently investigating how one of its Taiwan suppliers is dealing with nine suicides among its workers in China.
The object of the investigation is Hon-Hai Precision Industry Inc., which does business as Foxconn and assembles Apple (NASDAQ:AAPL) products including the iPhone and MacBook. It also does work for Dell Inc., Sony Corp. and Nokia Corp.
The Apple investigation comes after nine Hon-Hai workers in Shenzhen died from falls at buildings that have been confirmed as suicides. This has raised concerns about working conditions in the factories.
Hon Hai founder and chairman Terry Gou on Wednesday outlined a series of safety precautions the company is instituting, including installing 1.5 million square meters of safety nets around the outsides of all worker dormitories.
He has rejected characterizations of his factories as "sweat shops" and said it is difficult to manage a work force of 800,000 people, but the company is taking steps.
The object of the investigation is Hon-Hai Precision Industry Inc., which does business as Foxconn and assembles Apple (NASDAQ:AAPL) products including the iPhone and MacBook. It also does work for Dell Inc., Sony Corp. and Nokia Corp.
The Apple investigation comes after nine Hon-Hai workers in Shenzhen died from falls at buildings that have been confirmed as suicides. This has raised concerns about working conditions in the factories.
Hon Hai founder and chairman Terry Gou on Wednesday outlined a series of safety precautions the company is instituting, including installing 1.5 million square meters of safety nets around the outsides of all worker dormitories.
He has rejected characterizations of his factories as "sweat shops" and said it is difficult to manage a work force of 800,000 people, but the company is taking steps.
Upcoming Earnings...
Wed May 26:
After the close (NetApp, Verifone);
Thurs May 27:
Before the open (Lenovo, Genesco, Heinz, Big Lots, Costco);
After the close (Blue Coat Systems, J. Crew);
Fri May 28:
Before the open (Mentor Graphics)
After the close (NetApp, Verifone);
Thurs May 27:
Before the open (Lenovo, Genesco, Heinz, Big Lots, Costco);
After the close (Blue Coat Systems, J. Crew);
Fri May 28:
Before the open (Mentor Graphics)
Toll Brothers with Mixed Results...
Toll Brothers (TOL):
Mixed result here as the earnings miss, revenue miss, gross margin miss, higher charges, and lower closings; however, The new orders number was well ahead of the street and the company's outlook was pretty upbeat.
FQ2 EPS of -$0.24 misses by $0.01. Revenue of $311M (-21.9%) vs. $322M.
Mixed result here as the earnings miss, revenue miss, gross margin miss, higher charges, and lower closings; however, The new orders number was well ahead of the street and the company's outlook was pretty upbeat.
FQ2 EPS of -$0.24 misses by $0.01. Revenue of $311M (-21.9%) vs. $322M.
Top Hedge Fund Holdings....
Every quarter, Goldman Sachs puts out the list of the top holdings owned by hedge funds. The top holdings are what you would expect: Apple (AAPL), Bank of America (BAC), Microsoft (MSFT), Google (GOOG), and JP Morgan (JPM).
The 12 new holdings on the list are:
CIT Group (CIT)
CF Industries (CF)
Aclon (ACL)
Coca Cola Enterprises (CCE)
Kraft (KFT)
Xerox (XRX)
Assured Guaranty (AGO)
Baidu (BIDU)
Equinix (EQIX)
Gilead Sciences (GILD)
Liberty (LBTYA)
News Corp (NWSA)
The 12 new holdings on the list are:
CIT Group (CIT)
CF Industries (CF)
Aclon (ACL)
Coca Cola Enterprises (CCE)
Kraft (KFT)
Xerox (XRX)
Assured Guaranty (AGO)
Baidu (BIDU)
Equinix (EQIX)
Gilead Sciences (GILD)
Liberty (LBTYA)
News Corp (NWSA)
American Eagle Reports In-Line....
American Eagle Outfitters (AEO): Q1 EPS of $0.17 in-line. Revenue of $659.5M (+7.8%) vs. $656M.
Shares -6.1% premarket.
Shares -6.1% premarket.
Futures Point to Higher Opening...
Stock futures are near their morning highs in the minutes that follow the latest dose of durable goods orders data. Durable goods orders for April spiked 2.9%, which is much stronger than the 1.5% increase that had been widely expected.
Mortgage Applications up....
MBA Mortgage Applications: +11.3% vs. -1.5% last week.
Thirty-year fixed mortgage rate decreased to 4.80% from 4.83%.
Thirty-year fixed mortgage rate decreased to 4.80% from 4.83%.
Tuesday, May 25, 2010
Closing Market Breadth Figures
Quite a reversal from how we looked in the morning. At one point Declining Volume on the NYSE outnumbered Advancing Volume by a 15-1 ratio.Short-Sellers head for the exits....
Obvious short covering rally in the last hour, as traders fear that we may get some sort of stimulus announcement from European central banks, overnight.
The S&P finishes positive after one of the nastiest starts I've seen in a while.
We need some follow thru tomorrow to crush those shorts who remain.
The S&P finishes positive after one of the nastiest starts I've seen in a while.
We need some follow thru tomorrow to crush those shorts who remain.
Too many Bears....
This rush to jump on the bearish bandwagon is not typical of what happens at major market tops, Mark Hulbert says; such tops are far more often characterized by a more stubborn bullishness. In any case, it's rare for the advisory consensus to be right about the market's direction.
He's right.
He's right.
Some Insider Buying....
Some interesting insider buying amid the bloodshed: Ormat Technologies (ORA), Tupperware (TUP), Comcast (CMCSA) and JB Hunt (JBHT), companies that are good economic barometers whose stocks already looked cheap from a fundamentals level even before recent insider activity.
Netflix Target Raised....
FBR Capital analyst Heath Terry this morning repeated his Outperform rating on Netflix (NFLX), while lifting his price target on the shares to $130, from $100.
“We continue to believe that Netflix is in the sweet spot of its growth phase: closing rental stores and expanding streaming options are driving significant subscriber growth, while the impact of rising content costs is more than offset by declining fulfillment costs,” he writes.
In particular, Terry says that the success of the company’s Apple iPad app and the coming addition of apps for the iPhone and iPod Touch, “should drive meaningful incremental subscriber growth, lower churn, and lower subscriber acquisition costs.”
Concludes Terry: “With growth accelerating in the quarters ahead and consensus expectations still withinmanagement’s typically conservative guidance, we believe that the potential for upside to consensus expectations far outweighs the risk to the down side.”
Of course, the focus today is on the macro, not the micro. Ergo, NFLX is down $1.67, or 1.6%, to $99.95.
“We continue to believe that Netflix is in the sweet spot of its growth phase: closing rental stores and expanding streaming options are driving significant subscriber growth, while the impact of rising content costs is more than offset by declining fulfillment costs,” he writes.
In particular, Terry says that the success of the company’s Apple iPad app and the coming addition of apps for the iPhone and iPod Touch, “should drive meaningful incremental subscriber growth, lower churn, and lower subscriber acquisition costs.”
Concludes Terry: “With growth accelerating in the quarters ahead and consensus expectations still withinmanagement’s typically conservative guidance, we believe that the potential for upside to consensus expectations far outweighs the risk to the down side.”
Of course, the focus today is on the macro, not the micro. Ergo, NFLX is down $1.67, or 1.6%, to $99.95.
Lunchtime update....
12:30 pm : Trade remains choppy and generally listless, but stocks continue to trim their losses. Despite such a feat, the major equity averages are still down markedly for this session. This session's slide, on top of those registered in recent weeks, has put the S&P 500 on pace for a monthly loss of more than 10%, which would challenge the 11% drop in February 2009 for the stock market's worst monthly performance of the past 15 months.
Looks to me like we are vastly oversold....
Looks to me like we are vastly oversold....
Transocean's Legal Action "Inappropriate"...
Here's the News...
The U.S. Food and Drug Administration approved Genzyme's(GENZ) Lumizyme as a treatment for Pompe disease, a rare genetic disorder, the agency said Tuesday in a statement.
The FDA decision to approve Lumizyme came earlier than expected.
Currently, the only other treatment for Pompe disease available in the U.S. is Myozyme, also made by Genzyme.
In Pompe disease, a gene mutation prevents the body from making an enzyme, necessary for proper muscle functioning. Without the enzyme action, glycogen builds up in the cells and, ultimately, weakens the heart and muscles.
The FDA decision to approve Lumizyme came earlier than expected.
Currently, the only other treatment for Pompe disease available in the U.S. is Myozyme, also made by Genzyme.
In Pompe disease, a gene mutation prevents the body from making an enzyme, necessary for proper muscle functioning. Without the enzyme action, glycogen builds up in the cells and, ultimately, weakens the heart and muscles.
Genzyme spikes...no news yet...
Genzyme (GENZ) stock is spiking +2.34 to $50.70 all of a sudden.
No news yet...stay tuned.
No news yet...stay tuned.
Verizon's version of I-Phone will hurt AT&T...
AT&T could lose as many as 40% of iPhone users once Verizon starts selling a version of
the phone, according to Davenport analyst F. Drake Johnstone.
the phone, according to Davenport analyst F. Drake Johnstone.
Upcoming Earnings...
Tues May 25:
Earnings after the close:
TIVO
Wed May 26:
Earnings before the open:
Cable & Wireless
Burberry
SCMR
TOL
BMO
Earnings after the close:
NTAP
PAY
AINV
Earnings after the close:
TIVO
Wed May 26:
Earnings before the open:
Cable & Wireless
Burberry
SCMR
TOL
BMO
Earnings after the close:
NTAP
PAY
AINV
Crude Prices Tumbling...
July crude oil has traded in negative territory all session and hit morning lows of $67.15 per barrel around 9:00am ET. The energy component has since recovered a portion of its losses, but remains well in the red at $68.00 per barrel, down 3.1%.
Just released: Home Price Index....
The FHFA's Home Price Index for March increased 0.3%, which is a bit of a surprise since a flat reading that had been widely expected. It also marks an improvement from the 0.4% decline for the prior month.
Consumer Confidence is High....
May Consumer Confidence Index: 63.3 vs. 58.8 expected and 57.7 in April.
Consumer confidence posted its third consecutive monthly gain, and although still weak by historical levels, appears to be gaining some traction.
Consumer confidence posted its third consecutive monthly gain, and although still weak by historical levels, appears to be gaining some traction.
NCR looks to compete with Coinstar....
The nation's biggest ATM maker wants to compete with Coinstar.
NCR (NCR), the company that makes automatic teller machines and kiosks is ready to do some transacting for themselves.
They've already rolled out DVD-kiosks across the United States to prove they're serious... desiring a piece of an industry expected to grow 37% this year to $1.3 billion.
But don't run out and risk the house on these guys just yet. You will want to play it safe.
We're still slightly concerned that they don't have any agreements with studios... yet. But that shouldn't be a long-term issue, as they plan to offer something that Coinstar does not: sales.
NCR wants to "use the kiosks to sell DVDs, giving the studios a chance to recoup lost DVD sales revenue and possibly encourage impulse DVD purchases,” according to CNN.
And that alone could prove to be a gold mine.
NCR (NCR), the company that makes automatic teller machines and kiosks is ready to do some transacting for themselves.
They've already rolled out DVD-kiosks across the United States to prove they're serious... desiring a piece of an industry expected to grow 37% this year to $1.3 billion.
But don't run out and risk the house on these guys just yet. You will want to play it safe.
We're still slightly concerned that they don't have any agreements with studios... yet. But that shouldn't be a long-term issue, as they plan to offer something that Coinstar does not: sales.
NCR wants to "use the kiosks to sell DVDs, giving the studios a chance to recoup lost DVD sales revenue and possibly encourage impulse DVD purchases,” according to CNN.
And that alone could prove to be a gold mine.
Toyota suspends sales of Lexus sedans...
Toyota Motor Corp. (TM). The automaker said it had temporarily suspended sales of certain Lexus LS sedans following a steering-related recall. The decision announced on Monday marks the third time in recent months that Toyota has told dealers to stop selling vehicles in the wake of a recall.
From our Market Strategist....
As noted many times, the major difference between today and fall 2008/winter 2009 is the recovering American economy. According to a survey by the National Association for Business Economics, the American economy is expected to expand by 3.2% this year and next. In February this same group projected a 3.1% growth rate.
If the economy does grow at this pace, this would be the strongest consecutive periods of expansion since 2003 and 2004. Wow!
Yesterday stocks were again volatile. In my view the economic data was largely dismissed and all focused upon the happenings in Europe. What will happen today? There is more housing data, a regional manufacturing index, inflation and confidence surveys released. All can influence trading.
Last night the foreign markets were down. London was down 2.66%, Paris down 3.47% and Frankfurt down 2.76%. Japan was down 3.06% and Hang Sang down 3.47%.
The Dow should open sharply lower on mounting concern that Europe debt crisis will endanger the global recovery. The Korean situation is also increasing nervousness. There are reports that North Korea ordered its troops last week to prepare for combat. The 10-year is up 21/32 to yield 3.12%.
Kent Engelke
Chief Economic Strategist/Managing Director
Capitol Securities Management
If the economy does grow at this pace, this would be the strongest consecutive periods of expansion since 2003 and 2004. Wow!
Yesterday stocks were again volatile. In my view the economic data was largely dismissed and all focused upon the happenings in Europe. What will happen today? There is more housing data, a regional manufacturing index, inflation and confidence surveys released. All can influence trading.
Last night the foreign markets were down. London was down 2.66%, Paris down 3.47% and Frankfurt down 2.76%. Japan was down 3.06% and Hang Sang down 3.47%.
The Dow should open sharply lower on mounting concern that Europe debt crisis will endanger the global recovery. The Korean situation is also increasing nervousness. There are reports that North Korea ordered its troops last week to prepare for combat. The 10-year is up 21/32 to yield 3.12%.
Kent Engelke
Chief Economic Strategist/Managing Director
Capitol Securities Management
On the positive side....
The delinquency rate for auto loan payments dropped markedly in Q1, falling to 0.66% from 0.83% Y/Y. Similar improvements in credit card and mortgage delinquency rates suggest consumers are finally starting to climb out from under their debt loads.
PVH beats but guides lower....
Phillips-Van Heusen Corp (PVH). The company beat Wall Street estimates in its first quarter, but a second quarter profit forecast lighter than some analysts anticipated. The company's adjusted earnings was 83 cents per share -- above the 79 cents per share expected, on average, by analysts, according to Thomson Reuters.
DSW Beats Expectations...
DSW Inc. (DSW). The shoe retailer on Tuesday posted first-quarter profit that beat market expectations, boosted by strong merchandise margins, and the shoe retailer backed its 2010 earnings view. The company reported net income of 67 cents a share up from 16 cents a share, a year earlier.
Dell unveils its version of the "IPad"
Dell (DELL) unveils the Streak this morning, an Android-based tablet with a 5-inch screen. The Streak goes on sale in the U.K. in June, and in the U.S. later this summer, as Dell makes its assault on the tablet market with its 'mini-iPad.'
AutoZone Beats....
AutoZone Inc. said Tuesday its net income rose 17 percent in its fiscal third quarter on strong sales of automotive replacement parts and several new store openings.
The results breezed past analyst projections.
The company said its net income rose to $202.7 million, or $4.12 per share, in the three months ended May 8 from $173.7 million, or $3.13 per share, a year ago.
Revenue rose 10 percent to $1.82 billion from $1.66 billion a year ago.
Analysts surveyed by Thomson Reuters expected earnings of $3.59 per share on $1.71 billion in sales, on average.
Shares of AutoZone closed Monday at $184.25, up 17 percent for the year.
The results breezed past analyst projections.
The company said its net income rose to $202.7 million, or $4.12 per share, in the three months ended May 8 from $173.7 million, or $3.13 per share, a year ago.
Revenue rose 10 percent to $1.82 billion from $1.66 billion a year ago.
Analysts surveyed by Thomson Reuters expected earnings of $3.59 per share on $1.71 billion in sales, on average.
Shares of AutoZone closed Monday at $184.25, up 17 percent for the year.
Futures look ugly....
Ahead of the opening bell, Dow futures are down 221, or 2.2 percent, to 9,822. Standard & Poor's 500 index futures are down 27.90, or 2.6 percent, to 1,043.10, while Nasdaq 100 index futures are down 42.00, or 2.3 percent, to 1,770.50.
Tuesday's expected sell-off follows a sharp, late-session drop Monday. The Dow lost 80 points in the last 15 minutes of trading Monday to close down nearly 127 points. The index is now trading at its lowest levels since February.
Tuesday's expected sell-off follows a sharp, late-session drop Monday. The Dow lost 80 points in the last 15 minutes of trading Monday to close down nearly 127 points. The index is now trading at its lowest levels since February.
More on Medtronic....
NEW YORK (AP) -- Medtronic Inc., the world's largest medical-device company, says its fourth-quarter profit surged from results a year ago that had been depressed by a large license payment.
Medtronic says its revenue rose 10 percent, helped by higher sales of implantable heart devices as rival Boston Scientific suspended its U.S. sales of such devices for a month. Boston Scientific made changes to some of its devices without telling regulators.
Medtronic, which is based in Minneapolis, says it earned $954 million, or 86 cents per share, in the quarter ended April 30. That's up from $103 million, or 9 cents per share.
Medtronic says its earnings per share was 89 cents per share excluding one-time costs. That is a penny a share higher than analysts expected.
Its revenue rose to $4.2 billion. Analysts expected $4.19 billion in revenue.
Medtronic says its revenue rose 10 percent, helped by higher sales of implantable heart devices as rival Boston Scientific suspended its U.S. sales of such devices for a month. Boston Scientific made changes to some of its devices without telling regulators.
Medtronic, which is based in Minneapolis, says it earned $954 million, or 86 cents per share, in the quarter ended April 30. That's up from $103 million, or 9 cents per share.
Medtronic says its earnings per share was 89 cents per share excluding one-time costs. That is a penny a share higher than analysts expected.
Its revenue rose to $4.2 billion. Analysts expected $4.19 billion in revenue.
Earnings Before the Market....
Monday, May 24, 2010
Mad Money Recap...
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Monday evening.
Macy's (M): "Everyone knows I like Macy's, but not at the exclusion of TJX Companies (TJX). I'm going to say buy TJ Maxx and don't buy Macy's."
World Wrestling Entertainment (WWE): "If you look at the combination of the dividend and the stock, you've got a winner."
Caterpillar (CAT): "I feel that this is still not at the yield I want. I like it at 3.5% yield. Let's wait a couple more points."
MGM Mirage (MGM): "I think that Vegas is having another downturn. Macau is on fire, though. I'm a seller on MGM and a buyer of Wynn Resorts (WYNN)."
Vodafone Group (VOD): "I don't have a catalyst there. I like Verizon (VZ)."
Hitachi (HIT): "I think Japan is a no-growth environment and I'm not a buyer."
Macy's (M): "Everyone knows I like Macy's, but not at the exclusion of TJX Companies (TJX). I'm going to say buy TJ Maxx and don't buy Macy's."
World Wrestling Entertainment (WWE): "If you look at the combination of the dividend and the stock, you've got a winner."
Caterpillar (CAT): "I feel that this is still not at the yield I want. I like it at 3.5% yield. Let's wait a couple more points."
MGM Mirage (MGM): "I think that Vegas is having another downturn. Macau is on fire, though. I'm a seller on MGM and a buyer of Wynn Resorts (WYNN)."
Vodafone Group (VOD): "I don't have a catalyst there. I like Verizon (VZ)."
Hitachi (HIT): "I think Japan is a no-growth environment and I'm not a buyer."
WalMart to cut I-Phone Prices in Half...
Wal-Mart says it's cutting the price of the most up-to-date iPhone in half. That's another sign Apple is getting ready to unveil a new model.
Wal-Mart says that starting Tuesday the iPhone 3GS with 16 gigabytes of storage space will cost $97 with a two-year contract with AT&T. It currently costs $197.
Leaked prototypes for an updated iPhone surfaced on blogs recently. The price cut could signal retailers are clearing the shelves to make room for a new Apple smart phone.
Apple declined to comment on whether it's planning to release a new iPhone soon, or whether it will also sell the iPhone 3GS for less.
The company's annual developer conference kicks off June 7. Apple unveiled the iPhone 3GS at the same event last year.
Wal-Mart says that starting Tuesday the iPhone 3GS with 16 gigabytes of storage space will cost $97 with a two-year contract with AT&T. It currently costs $197.
Leaked prototypes for an updated iPhone surfaced on blogs recently. The price cut could signal retailers are clearing the shelves to make room for a new Apple smart phone.
Apple declined to comment on whether it's planning to release a new iPhone soon, or whether it will also sell the iPhone 3GS for less.
The company's annual developer conference kicks off June 7. Apple unveiled the iPhone 3GS at the same event last year.
Medtronic to Report Tuesday before the open...
Medtronic (MDT) is expected to report Q4 earnings on Tuesday, May 25 before the market open with a conference call scheduled for 8 am ET.
Guidance:
Analysts are looking for EPS of 88c on revenue of $4.19B. The consensus range is 86c-91c for EPS, and $4.11B-$4.27B for revenue. The company raised the lower end of its FY10 EPS guidance to $3.20-$3.22 in late February.
Positive catalysts for Medtronic this quarter include the product recalls that its competitor Boston Scientific (BSX) is currently experiencing, expanding global sales in the ICD market, domestic and international demand for the Endeavor stent, and sales of its new heart valve products. Negative catalysts for the quarter may be seen coming from a maturing domestic ICD market with slowing sales growth.
Guidance:
Analysts are looking for EPS of 88c on revenue of $4.19B. The consensus range is 86c-91c for EPS, and $4.11B-$4.27B for revenue. The company raised the lower end of its FY10 EPS guidance to $3.20-$3.22 in late February.
Positive catalysts for Medtronic this quarter include the product recalls that its competitor Boston Scientific (BSX) is currently experiencing, expanding global sales in the ICD market, domestic and international demand for the Endeavor stent, and sales of its new heart valve products. Negative catalysts for the quarter may be seen coming from a maturing domestic ICD market with slowing sales growth.
Market Recap....
Market recap: Stocks plummeted in the final half-hour of trading, knocked down by concerns about Europe's Banks and Washington's Lawmaking.
NYSE decliners outnumbered advancers two to one.
At the close:
Dow -1.27% to 10064.
S&P -1.31% to 1073.
Nasdaq -0.69% to 2214.
Treasurys: 30-year -0.33%. 10-yr -0.09%. 5-yr -0.08%.
Commodities: Crude +0.03% to $70.06. Gold +1.44% to $1193.00.
Currencies: Euro -1.51% vs. dollar. Yen -0.67%. Pound -0.17
NYSE decliners outnumbered advancers two to one.
At the close:
Dow -1.27% to 10064.
S&P -1.31% to 1073.
Nasdaq -0.69% to 2214.
Treasurys: 30-year -0.33%. 10-yr -0.09%. 5-yr -0.08%.
Commodities: Crude +0.03% to $70.06. Gold +1.44% to $1193.00.
Currencies: Euro -1.51% vs. dollar. Yen -0.67%. Pound -0.17
Will Amazon buy out Netflix???
For what it's worth, a recent poll by TheStreet.com suggests that Netflix will not be bought by
Amazon.
http://www.thestreet.com/_yahoo/story/10764150/1/netflix-wontbe-
bought-by-amazon-poll-says.html
Amazon.
http://www.thestreet.com/_yahoo/story/10764150/1/netflix-wontbe-
bought-by-amazon-poll-says.html
Disney's Toy Story 3...Coming June 18
Toy Story 3 will be the first film to use Dolby Surround 7.1 for sound effects, an
improvement over the current 5.1 setup.
The film will debut on June 18th.
improvement over the current 5.1 setup.
The film will debut on June 18th.
IBD Top 100 Deletions...
J Crew (JCG)
Tractor Supply (TSCO)
Fossil Inc. (FOSL)
Whirlpool (WHR)
Phillips Van Heusen (PVH)
TRW Automotive (TRW)
Tractor Supply (TSCO)
Fossil Inc. (FOSL)
Whirlpool (WHR)
Phillips Van Heusen (PVH)
TRW Automotive (TRW)
Limewire in Trouble...
LimeWire creator Mark Groton is profiled in the NYT, he is facing up to $450M in damages for copyright infringement.
http://www.nytimes.com/2010/05/24/business/media/24limewire.html?ref=media
http://www.nytimes.com/2010/05/24/business/media/24limewire.html?ref=media
IBD Top 100 Additions....
New to the Top 100:
Dollar Tree (DLTR)
Aeropostale (ARO)
Polaris Industries (PII)
O'Reilly Automotive (ORLY)
Family Dollar (FDO)
Life-time Fitness (LTM)
DSW Shoe Warehouse (DSW)
Ann Taylor (ANN)
Ross Stores (ROST)
IMAX Theatres (IMAX)
Cheesecake Factory (CAKE)
Bed, Bath and Beyond (BBBY)
Dollar Tree (DLTR)
Aeropostale (ARO)
Polaris Industries (PII)
O'Reilly Automotive (ORLY)
Family Dollar (FDO)
Life-time Fitness (LTM)
DSW Shoe Warehouse (DSW)
Ann Taylor (ANN)
Ross Stores (ROST)
IMAX Theatres (IMAX)
Cheesecake Factory (CAKE)
Bed, Bath and Beyond (BBBY)
Stocks to Watch This Morning
• American International Group Inc. (AIG). U.S. Treasury is re-looking at plans to float the Asian unit of AIG in case a bid by Prudential (PUK) to buy the AIA fails, two British newspapers reported on Sunday. Separately, the company welcomed the Justice Department decision, not specifically identified, in which published reports indicate that federal prosecutors will not charge company executives over credit default swaps.
• BHP Billiton Ltd/Plc (BHP). The global miner wants to take advantage of the current market weakness and is looking worldwide for acquisition opportunities to grow its business, a senior company official said on Monday. The company also said that the recent giant oil spill in the Gulf of Mexico has brought some delays to its projects and could hit its production growth forecast of 10 percent for the year ending June 10, and estimates of 8-10 percent next year. Separately, the company set out its case for changes to Australia's proposed new mining tax in talks with government officials on Friday, saying any tax should be based on the value of commodities produced. Meanwhile, BHP said it still sees returns on its petroleum operations in Western Australia and the Gulf of Mexico as competitive, amid tax and regulatory debates affecting the two regions.
• British Petroleum (BP). The British oil major sharply reduced its estimate on Monday of how much oil it is siphoning off each day from a ruptured well in the Gulf of Mexico that has been spewing oil for a month and threatening ecological disaster. Separately, BP will press ahead with a series of short-term options, including one this week, to try to plug its gushing Gulf of Mexico oil well, and these will be attempted before it completes an expected relief well in August, BP Managing Director Bob Dudley said on Sunday.
• Burger King Holdings (BKC). The hamburger chain’s franchisees have won the right to argue in court that the company acted in bad faith when it added its double cheeseburger to its $1 Value Menu.
• Campbell Soup Co. (CPB). The largest soup maker on Monday posted higher sales in its key U.S. soup market, helped by increased promotional spending. The company's third-quarter earnings were 54 cents a share, before items.
• EMC Corp. (EMC). The company's shares, which have already jumped 50 percent in the past year, could climb even more fueled by a recovering economy and strong demand for storage capacity from its corporate customers, according to a story in Barron's.
• Equity One Inc. (EQY). The shopping center owner said on Sunday it would buy Capital Shopping Centres Group Plc's U.S. unit in a $258.3 million deal, helping the company expand into California. The transaction will give British company 4.1 million shares of Equity One common stock and 10.9 million joint venture units.
• First Solar (FSLR). The producer of solar modules, which plans to build the world's largest solar power plant in Inner Mongolia, could hear from China in coming months the amount of subsidy it will get, the company's president said.
• Fluor Corp. (FLR). The company on Monday said it won a series of contracts from Ma`aden and Alcoa (AA) joint venture to provide program management consultancy, engineering, procurement and construction management services for projects related to the development of the integrated Ras Az`Zawr aluminum complex. The company said it expects to book about $3 billion covering four separate scopes of work.
• Marriott International Inc. (MAR). The largest U.S. hotel chain aims to double the number of Marriott brand hotels in China within five years and intends to introduce a lower-priced hotel brand in the near future. Marriott, which currently manages 46 hotels in China, expects to have 60 hotels by the end of the year and 90 in five years, making China its second-largest market by number of hotels, Arne Sorenson, Marriott's president, said in Shanghai on Monday.
• Morgan Stanley (MS). China's securities regulator has started to review the company’s application to sell its roughly $1 billion stake in Chinese investment bank China International Capital Corp, state media reported on Monday. If the application process goes smoothly, Morgan Stanley could obtain regulatory approval to sell its 34.3 percent stake in CICC within around three months, the official Shanghai Securities News said, citing unnamed sources.
• News Corp. (NWSA). An Italian court on Monday rejected an appeal against the sale of satellite TV soccer rights to News Corp unit Sky Italia, averting possible financial problems for Italian clubs. The appeal was filed by Conto TV, a small satellite operator. Conto claimed the way Serie A rights for the next two seasons were sold to Sky Italia was unfair.
• Rio Tinto (RTP). The global miner described Australia as its top sovereign risk on Monday and said it was reviewing all investments there as its raised pressure on Canberra to overhaul its planned new mining tax.
• Royal Dutch Shell (RDSa). The oil major has started commissioning the first phase of its multi-billion dollar Pearl gas-to-liquids project in Qatar, an executive of the plant said on Monday. The GTL plant, which Shell describes as the world's largest energy project, has a price tag of up to $19 billion.
• Sherwin-Williams Co. (SHW). The largest U.S. paint maker on Monday said it will buy wood coatings maker Becker Acroma Industrial Wood Coatings for an undisclosed sum, in a bid to expand its global footprint. The deal, subject to regulatory approvals, is slated to close in the third aquarter
• Sony Corp. (SNE). The company’s CEO is set to meet rival Samsung Electronics, for possible alliances, as the Japanese consumer electronics maker aims to turn its TV business profitable with aggressive sales targets.
• Sprint Nextel (S). Shares of the carrier could rise to about $6 a share, helped by the introduction of a mobile phone that works on it's new high-speed network, according to business weekly Barron's. The newspaper said in its May 24 edition that Sprint's total subscriber base could grow as it takes the lead with a phone that runs on its "4G" network, which it promises will deliver speeds up to 10 times faster than existing networks.
• UAL Corp. (UAUA). A U.S. Senate subcommittee is set to examine the proposed airline deal between the company’s United Airlines and Continental Airlines (CAL) on Thursday that will study the implications for airline consumers.
• Verizon Communications Inc. (VZ). The company won final U.S. regulatory approval on Friday to sell 4.8 million rural phone lines to Frontier Communications Corp (FTR) for about $5.25 billion in stock.
• Walt Disney Co. (DIS). Billionaire Ron Burkle and Hollywood producer Harvey Weinstein on Friday said they were continuing efforts to buy the company's Miramax Films, playing down media reports that the long-gestating deal had fallen through.
• Whirlpool Corp. (WHR). The Indian unit of global appliances maker plans to hike product prices by 2-3 percent in the next 2 months, a top official said. The firm has also revised its investment in India to 4 billion rupees over 3 years, starting this fiscal. The firm also plans to launch a new range of higher end washing machines by September this year and boost distribution.
• BHP Billiton Ltd/Plc (BHP). The global miner wants to take advantage of the current market weakness and is looking worldwide for acquisition opportunities to grow its business, a senior company official said on Monday. The company also said that the recent giant oil spill in the Gulf of Mexico has brought some delays to its projects and could hit its production growth forecast of 10 percent for the year ending June 10, and estimates of 8-10 percent next year. Separately, the company set out its case for changes to Australia's proposed new mining tax in talks with government officials on Friday, saying any tax should be based on the value of commodities produced. Meanwhile, BHP said it still sees returns on its petroleum operations in Western Australia and the Gulf of Mexico as competitive, amid tax and regulatory debates affecting the two regions.
• British Petroleum (BP). The British oil major sharply reduced its estimate on Monday of how much oil it is siphoning off each day from a ruptured well in the Gulf of Mexico that has been spewing oil for a month and threatening ecological disaster. Separately, BP will press ahead with a series of short-term options, including one this week, to try to plug its gushing Gulf of Mexico oil well, and these will be attempted before it completes an expected relief well in August, BP Managing Director Bob Dudley said on Sunday.
• Burger King Holdings (BKC). The hamburger chain’s franchisees have won the right to argue in court that the company acted in bad faith when it added its double cheeseburger to its $1 Value Menu.
• Campbell Soup Co. (CPB). The largest soup maker on Monday posted higher sales in its key U.S. soup market, helped by increased promotional spending. The company's third-quarter earnings were 54 cents a share, before items.
• EMC Corp. (EMC). The company's shares, which have already jumped 50 percent in the past year, could climb even more fueled by a recovering economy and strong demand for storage capacity from its corporate customers, according to a story in Barron's.
• Equity One Inc. (EQY). The shopping center owner said on Sunday it would buy Capital Shopping Centres Group Plc's U.S. unit in a $258.3 million deal, helping the company expand into California. The transaction will give British company 4.1 million shares of Equity One common stock and 10.9 million joint venture units.
• First Solar (FSLR). The producer of solar modules, which plans to build the world's largest solar power plant in Inner Mongolia, could hear from China in coming months the amount of subsidy it will get, the company's president said.
• Fluor Corp. (FLR). The company on Monday said it won a series of contracts from Ma`aden and Alcoa (AA) joint venture to provide program management consultancy, engineering, procurement and construction management services for projects related to the development of the integrated Ras Az`Zawr aluminum complex. The company said it expects to book about $3 billion covering four separate scopes of work.
• Marriott International Inc. (MAR). The largest U.S. hotel chain aims to double the number of Marriott brand hotels in China within five years and intends to introduce a lower-priced hotel brand in the near future. Marriott, which currently manages 46 hotels in China, expects to have 60 hotels by the end of the year and 90 in five years, making China its second-largest market by number of hotels, Arne Sorenson, Marriott's president, said in Shanghai on Monday.
• Morgan Stanley (MS). China's securities regulator has started to review the company’s application to sell its roughly $1 billion stake in Chinese investment bank China International Capital Corp, state media reported on Monday. If the application process goes smoothly, Morgan Stanley could obtain regulatory approval to sell its 34.3 percent stake in CICC within around three months, the official Shanghai Securities News said, citing unnamed sources.
• News Corp. (NWSA). An Italian court on Monday rejected an appeal against the sale of satellite TV soccer rights to News Corp unit Sky Italia, averting possible financial problems for Italian clubs. The appeal was filed by Conto TV, a small satellite operator. Conto claimed the way Serie A rights for the next two seasons were sold to Sky Italia was unfair.
• Rio Tinto (RTP). The global miner described Australia as its top sovereign risk on Monday and said it was reviewing all investments there as its raised pressure on Canberra to overhaul its planned new mining tax.
• Royal Dutch Shell (RDSa). The oil major has started commissioning the first phase of its multi-billion dollar Pearl gas-to-liquids project in Qatar, an executive of the plant said on Monday. The GTL plant, which Shell describes as the world's largest energy project, has a price tag of up to $19 billion.
• Sherwin-Williams Co. (SHW). The largest U.S. paint maker on Monday said it will buy wood coatings maker Becker Acroma Industrial Wood Coatings for an undisclosed sum, in a bid to expand its global footprint. The deal, subject to regulatory approvals, is slated to close in the third aquarter
• Sony Corp. (SNE). The company’s CEO is set to meet rival Samsung Electronics, for possible alliances, as the Japanese consumer electronics maker aims to turn its TV business profitable with aggressive sales targets.
• Sprint Nextel (S). Shares of the carrier could rise to about $6 a share, helped by the introduction of a mobile phone that works on it's new high-speed network, according to business weekly Barron's. The newspaper said in its May 24 edition that Sprint's total subscriber base could grow as it takes the lead with a phone that runs on its "4G" network, which it promises will deliver speeds up to 10 times faster than existing networks.
• UAL Corp. (UAUA). A U.S. Senate subcommittee is set to examine the proposed airline deal between the company’s United Airlines and Continental Airlines (CAL) on Thursday that will study the implications for airline consumers.
• Verizon Communications Inc. (VZ). The company won final U.S. regulatory approval on Friday to sell 4.8 million rural phone lines to Frontier Communications Corp (FTR) for about $5.25 billion in stock.
• Walt Disney Co. (DIS). Billionaire Ron Burkle and Hollywood producer Harvey Weinstein on Friday said they were continuing efforts to buy the company's Miramax Films, playing down media reports that the long-gestating deal had fallen through.
• Whirlpool Corp. (WHR). The Indian unit of global appliances maker plans to hike product prices by 2-3 percent in the next 2 months, a top official said. The firm has also revised its investment in India to 4 billion rupees over 3 years, starting this fiscal. The firm also plans to launch a new range of higher end washing machines by September this year and boost distribution.
Wednesday, March 26, 2008
Akeena Solar Poised for Growth...
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.
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.
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
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