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.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....
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