U.S. Markets
Dow -108.03 (-0.85%)
Nasdaq -30.51 (-1.26%)
S&P 500 -14.60 (-1.05%)
News That Moved the Market
Markets Fall; Factory Orders Disappoints. Markets drifted lower Monday after posting a strong gain last week. After opening down, major indices fell even lower after factory orders came in weaker than expected. The figure increased by 2.3%, but fell short of the 2.6% jump economists were anticipating.
With little news during the day, buyers seemed to sit the session out and let seller regain control.
Google Reacts To Microsoft's Bid. Microsoft's (MSFT, -0.1%) bid for Yahoo (YHOO, +3.3%) remained in focus Monday, as major players began reacting to the move. Google (GOOG, -4.0%) CEO Eric Schmidt reportedly called Yahoo CEO Jerry Yang to explore partnerships between the companies to fend off the unsolicited bid. Meanwhile, an executive at Google said on a blog during the weekend that the combination of Microsoft and Yahoo could create antitrust issues, despite Google owning a greater market share of the Internet search market than its two rivals combined. Yahoo said that it still has made "absolutely no decisions" about the proposed deal, but I do not know many Yahoo share holders opposed to it.
After Hours Earnings Reports.
News Corp. (NWS, -0.3% day; -0.0% A.H. ) reported a slight increase in profit, but missed estimates by a penny. The company closed its deal to buy Wall Street Journal publisher Dow Jones in December.
Yum Brands (YUM, +1.6% day, -1.3% A.H.) top and bottom-line fourth quarter figures beat estimates, but its 2008 EPS guidance fell short of expectations.
Tomorrow Notable Earnings
Toyota (TM) Before Open
Disney (DIS) After Close
NYSE Euronext (NYE) Before Open
CME (CME) Before Open
Economic Events:
10:00 AM: ISM Services
Monday, February 4, 2008
What a Boring Day...
I guess I'm getting spoiled by all the volatility we've seen over the past month, but today was very slow.
Closing performance:
Dow -108
S&P -14
Nasdaq -30
Retail and Gold stocks sold off, leaders were Pharmaceutical, Oil, and Fertilizer stocks.
More complete summary to follow.
Closing performance:
Dow -108
S&P -14
Nasdaq -30
Retail and Gold stocks sold off, leaders were Pharmaceutical, Oil, and Fertilizer stocks.
More complete summary to follow.
Motorola Downgraded to Sell....
MOT down .38 to $12.31
AmTech Research downgrades Motorola from Neutral to Sell . Amtech downgrades MOT to Sell from Neutral saying in the $13 range, MOT stock is discounting a successful sale of the handset division for $10-$11 bln.
The firm says they would sell the stock here on strength given the risk and uncertainty of timing and/or amount of transaction. They argue that 1) $8 bln for handsets would be generous based on 0.5x their CY08 sales estimate of $16 bln, and 2) a successful deal appears factored into today's stock valuation.
AmTech Research downgrades Motorola from Neutral to Sell . Amtech downgrades MOT to Sell from Neutral saying in the $13 range, MOT stock is discounting a successful sale of the handset division for $10-$11 bln.
The firm says they would sell the stock here on strength given the risk and uncertainty of timing and/or amount of transaction. They argue that 1) $8 bln for handsets would be generous based on 0.5x their CY08 sales estimate of $16 bln, and 2) a successful deal appears factored into today's stock valuation.
Wells Fargo Downgraded to Sell....
WFC down 1.75 to $31.90
Stifel Nicolaus downgrades Wells Fargo from Hold to Sell . Stifel downgrades WFC to Sell from Hold based on valuation. The firm says this move is one of the toughest decisions they have made in recent years.
They still believe the co has one of the better management teams in the industry and has a strong capital position relative to other large-cap banks. However, the shares currently trade at 14.0x their 2008 EPS of $2.40, which is in line with the broader market multiple. This premium multiple comes despite the fact that the firm has lowered their 2008 EPS estimate by 20% since 2Q07, which shows that while the company has avoided the large CDO and market valuation writedowns, it is not immune to the overall economic environment.
Stifel Nicolaus downgrades Wells Fargo from Hold to Sell . Stifel downgrades WFC to Sell from Hold based on valuation. The firm says this move is one of the toughest decisions they have made in recent years.
They still believe the co has one of the better management teams in the industry and has a strong capital position relative to other large-cap banks. However, the shares currently trade at 14.0x their 2008 EPS of $2.40, which is in line with the broader market multiple. This premium multiple comes despite the fact that the firm has lowered their 2008 EPS estimate by 20% since 2Q07, which shows that while the company has avoided the large CDO and market valuation writedowns, it is not immune to the overall economic environment.
A Lull in the Action....
Very sluggish market this morning. The averages are lower following a great Superbowl last night. Probably a hangover similar to the one I'm experiencing right now.
Dow - 69
S&P - 8
Nasdaq -16
I think Traders want to bring this market back down to retest the bottom made on January 22nd. However, with all the positive stimulus going on out there, they may not be able to.
The old adage is "Don't fight the Fed" and the Fed right now is cutting rates....that should help the market head higher over the next few months.
Dow - 69
S&P - 8
Nasdaq -16
I think Traders want to bring this market back down to retest the bottom made on January 22nd. However, with all the positive stimulus going on out there, they may not be able to.
The old adage is "Don't fight the Fed" and the Fed right now is cutting rates....that should help the market head higher over the next few months.
Earnings Today...
COMPANIES REPORTING EARNINGS
Anadarko Petroleum Corp. (APC). Expected to post Q4 earnings of $0.76 a share, a decrease of 40.86% from $1.28 earned same time last year, according to analysts polled by Thomson Financial.
Clorox Co. (CLX). Expected to report Q2 earnings of $0.55 a share.
Computer Sciences Corp. (CSC). Expected to report Q3 earnings of $1 a share.
Equifax Inc. (EFX). Expected to post Q4 earnings of $0.57 a share.
Lincoln National Corp. (LNC). Expected to post Q4 earnings of $1.36 a share.
Manitowoc Co. (MTW). Expected to post Q4 profit of $0.68 a share.
News Corp. (NWS). Expected to post Q2 earnings of $0.27 a share.
PartnerRe Ltd. (PRE). Expected to post Q4 earnings of $3.19 a share.
Post Properties Inc. (PPS). Expected to post Q4 earnings of $0.09 a share.
Principal Financial Group (PFG). Expected to report Q4 earnings of $1.01 a share.
Savvis Inc. (SVVS). Expected to post Q4 earnings of $0.02 a share.
Yum Brands Inc. (YUM). Expected to report Q4 earnings of $0.42 a share.
Anadarko Petroleum Corp. (APC). Expected to post Q4 earnings of $0.76 a share, a decrease of 40.86% from $1.28 earned same time last year, according to analysts polled by Thomson Financial.
Clorox Co. (CLX). Expected to report Q2 earnings of $0.55 a share.
Computer Sciences Corp. (CSC). Expected to report Q3 earnings of $1 a share.
Equifax Inc. (EFX). Expected to post Q4 earnings of $0.57 a share.
Lincoln National Corp. (LNC). Expected to post Q4 earnings of $1.36 a share.
Manitowoc Co. (MTW). Expected to post Q4 profit of $0.68 a share.
News Corp. (NWS). Expected to post Q2 earnings of $0.27 a share.
PartnerRe Ltd. (PRE). Expected to post Q4 earnings of $3.19 a share.
Post Properties Inc. (PPS). Expected to post Q4 earnings of $0.09 a share.
Principal Financial Group (PFG). Expected to report Q4 earnings of $1.01 a share.
Savvis Inc. (SVVS). Expected to post Q4 earnings of $0.02 a share.
Yum Brands Inc. (YUM). Expected to report Q4 earnings of $0.42 a share.
Google will try to thwart MSFT/YHOO deal...
Google mobilized over the weekend to thwart Microsoft's $44.6 billion hostile bid for Yahoo. A Google statement said the deal would threaten competition and needed examination by policymakers around the world. Google CEO Eric E. Schmidt reportedly called Yahoo chief Jerry Yang to offer help in fending off Microsoft, possibly in the form of a partnership between the companies.
Google's lobbyists in Washington began shaping arguments against the transaction, hoping to prolong a regulatory review at least until after the next president takes office.
This, of course, is positibve news for Yahoo, as it means Google may ultimately get in a bidding war with Microsoft. Yahoo is just responding that it is "exploring its options."
Google's lobbyists in Washington began shaping arguments against the transaction, hoping to prolong a regulatory review at least until after the next president takes office.
This, of course, is positibve news for Yahoo, as it means Google may ultimately get in a bidding war with Microsoft. Yahoo is just responding that it is "exploring its options."
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