U.S. Markets:
Dow -7.49 (-0.06%)
Nasdaq -12.88 (-0.57%)
S&P 500 +0.71 (+0.05%)
News That Moved the Market:
Flat Day With Less Than Stellar Data. A late day rally left the markets mostly flat, but the S&P was able to eek out a gain for the first time in a week. The biggest piece of data released was the Institute for Supply Management's factory index, which fell to 48.3. The number represented a contraction, but was slightly better than expected. The Commerce Department also released data showing construction spending dropped by 1.7%, more than estimated by economists. Both numbers served as reminders that a recession may be coming if we are already not in one.
Diebold Rejects Takeover Bid. Diebold (DBD, +61.0%) announced that it has rejected United Technology's (UTX, -1.6%) $2.64 billion bid, saying the $40/share offer undervalued the company. Diebold has seen its stock price drop recently because the SEC is investigating its revenue recognition policies.
Fannie and Freddie Overhaul Appraisal Process. Fannie Mae (FNM, -4.4%) and Freddie Mac (FRE, -5.8%) agreed to only buy mortgages from lenders that used independent home appraisers. The deal was pushed by New York Attorney General Andrew Cuomo, and a new oversight group will be created to make sure the new standards are upheld. The rules should prevent inflated appraisals, which distort the value of mortgage-backed securities whose values are based on the homes.
Quick Tics:
GM (GM, -0.3%), Ford (F, -5.4%), and Toyota (TM, +0.5%) all reported declines in U.S. auto sales...
Warren Buffet announced he has withdrawn his offer to reinsure municipal bonds guaranteed by MBIA (MBI, -2.7%), Ambac (ABK, -10.8%) and FGIC.
Once again, gold and crude hit new highs in trading today.
Tomorrow Notable Earnings:
Staples, Inc. (STPL) Before Open
Economic Events:
9:00 AM: FOMC President Ben Bernanke Speaks (Oh, no...Not Again!!!)
Monday, March 3, 2008
Thornburg Getting Crushed...
Thornburg Mortgage (TMA) getting slammed, after company reported it's been hit with another wave of margin calls, worth about $270M, and is having trouble meeting them, seeing as it just met $300M worth of calls in February. "To date, we have not met the substantial majority of the most recent margins calls," company says in SEC filing.
TMA says it's working to meet the calls by either selling portfolio securities or raising debt or equity capital. Margin calls have been triggered by declines in the value of securities backed by Alt-A mortgage loans, company says. TMA down 54% at $4.12 on heavy volume.
TMA says it's working to meet the calls by either selling portfolio securities or raising debt or equity capital. Margin calls have been triggered by declines in the value of securities backed by Alt-A mortgage loans, company says. TMA down 54% at $4.12 on heavy volume.
This Morning's Upgrades...
Here is a list of stocks Upgraded this morning...
Methanex (MEOH) by CIBC Wrld Mkts
BioMed Realty (BMR) by Stifel Nicolaus
Pier 1 Imports (PIR) by Wachovia
Deutsche Telekom (DT) by JP Morgan
Lululemon Athletica (LULU) by BMO Capital Markets
OSI Pharm (OSIP) by Wachovia
Exelon (EXC) by Jefferies & Co
Northrop Grumman (NOC) by Oppenheimer
Seagate Tech (STX) by JP Morgan
Kohl's (KSS) by JP Morgan
Expeditors Intl (EXPD) by UBS
DeVRY (DV) by Lehman Brothers
Methanex (MEOH) by CIBC Wrld Mkts
BioMed Realty (BMR) by Stifel Nicolaus
Pier 1 Imports (PIR) by Wachovia
Deutsche Telekom (DT) by JP Morgan
Lululemon Athletica (LULU) by BMO Capital Markets
OSI Pharm (OSIP) by Wachovia
Exelon (EXC) by Jefferies & Co
Northrop Grumman (NOC) by Oppenheimer
Seagate Tech (STX) by JP Morgan
Kohl's (KSS) by JP Morgan
Expeditors Intl (EXPD) by UBS
DeVRY (DV) by Lehman Brothers
This Morning's Downgrades....
Here is a list of companies Downgraded this morning...
Supertex (SUPX) by Piper Jaffray
Alnylam Pharmaceuticals (ALNY) by Needham & Co
Cablevision (CVC) by Pali Research
Apollo Group (APOL) by Banc of America Sec
Isle of Capri (ISLE) by Brean Murray
SW Energy (SWN) by Sun Trust Rbsn Humphrey
Western Digital (WDC) by JP Morgan
Ford Motor (F) by Citigroup
Omnicare (OCR) by Oppenheimer
DealerTrack (TRAK) by Lehman Brothers
Supertex (SUPX) by Piper Jaffray
Alnylam Pharmaceuticals (ALNY) by Needham & Co
Cablevision (CVC) by Pali Research
Apollo Group (APOL) by Banc of America Sec
Isle of Capri (ISLE) by Brean Murray
SW Energy (SWN) by Sun Trust Rbsn Humphrey
Western Digital (WDC) by JP Morgan
Ford Motor (F) by Citigroup
Omnicare (OCR) by Oppenheimer
DealerTrack (TRAK) by Lehman Brothers
Stock Splits Today....
STOCK-SPLITS TODAY:
New Jersey Resources (NJR). 3-for-2 split
OXBOW RES CORP (OXWR.PK). 3-for-1 split
Parexel (PRXL). 2-for-1 split.
New Jersey Resources (NJR). 3-for-2 split
OXBOW RES CORP (OXWR.PK). 3-for-1 split
Parexel (PRXL). 2-for-1 split.
End of an Era for Televisions....
Sony Corp. (SNE). The Japanese electronics giant today said it will end production of cathode ray tube (CRT) televisions by the end of the month, four decades after they were launched, as consumers switch to flat-screen TVs.
Sony ended production of CRTs in Japan in 2004, but continued to produce CRT TVs under the Trinitron brand at plants in Singapore and Malaysia to meet limited demand in Latin America and parts of Asia.
Sony ended production of CRTs in Japan in 2004, but continued to produce CRT TVs under the Trinitron brand at plants in Singapore and Malaysia to meet limited demand in Latin America and parts of Asia.
Chip Sales Top Targets...
January global chip sales gained 0.03% Y/Y, beating expectations. Excluding highly-competitive memory chips, semi sales were up 8.1% Y/Y. PC and mobile handset shipments were in-line with expectations, which forecast 12% and 12--15% sales growth in 2008 respectively. "
The U.S. economy has entered a period of slower growth that may impact consumer purchases of electronic products," SIA president George Scalise said. "However the emergence and growth of large consumer markets outside the U.S. has created new opportunities for chipmakers."
The U.S. economy has entered a period of slower growth that may impact consumer purchases of electronic products," SIA president George Scalise said. "However the emergence and growth of large consumer markets outside the U.S. has created new opportunities for chipmakers."
Northrup Wins $35B Contract...
Intel Goes Atomic...
Intel (INTC) is launching one of its trademark "branding campaigns" to market two new microchips. Now co-named Atom, the Silverthorne is targeted at MIDs (pocket-sized internet-enabled devices), while the Diamondville is for low-end laptops.
Intel's branding moves are closely watched, because the company uses its brands together with lucrative marketing incentives to dominate the market.
Intel's branding moves are closely watched, because the company uses its brands together with lucrative marketing incentives to dominate the market.
Will Commercial Real Estate be Next??
The impending fall of commercial real estate will take a heavy toll on firms with exposure to commercial property loans and mortgage-backed securities, such as Bear Stearns (BSC), Citigroup (C), JPMorgan (JPM), Lehman Brothers (LEH), Merrill Lynch (MER) and Morgan Stanley (MS). Goldman Sachs analyst William Tanona thin ks the above firms will write down $7.2B in Q1, and projects commercial real estate values will slide 21-26% over the next two years.
Microsoft Increasing Online Software Offerings...
Microsoft (MSFT) will announce plans to offer online software services that will handle email, calendars, contacts and video conferencing for small-to-medium-size companies for a per-user fee. MSFT will start testing its offerings today for free with select businesses, after which it will begin charging fees. How much? Only time will tell.
No doubt this was spurred by the success around the Netsuite (N) IPO late last year. That stock ran from IPO price at $22 up to $45 and back down to $21. Not good news for Netsuite, UNLESS Microsoft decides to buy them out....
No doubt this was spurred by the success around the Netsuite (N) IPO late last year. That stock ran from IPO price at $22 up to $45 and back down to $21. Not good news for Netsuite, UNLESS Microsoft decides to buy them out....
United Technologies Bids for Diebold...
United Technologies (UTX) made an unsolicited $2.63B cash bid for developer Diebold (DBD). The $40/share offer is well below Diebold's 52-week high of $54.50, but a 66% premium to its Friday close of $24.12/share, UTC says the bid is "compelling." Besides ATM machines, Diebold develops security systems and computer hardware that would help UTC's fledgling fire-and-security business grow revenue from a current $5.8B to $10B+.
The move is the latest in a string of unsolicited bids as buyers look to capitalize on deflated share prices.
The move is the latest in a string of unsolicited bids as buyers look to capitalize on deflated share prices.
Notable Earnings Due This Week...
Monday
Finisar Corp. (FNSR) 3Q .02 AMC
LeapFrog Enterp Inc. (LF) 4Q (.40) 5:00PM
Midway Games Inc. (MWY) 4Q (.22) AMC
SuperGen Inc. (SUPG) 4Q .06 AMC
VeriFone Hldgs Inc. (PAY) 1Q .35
Tuesday
Chico's FAS Inc. (CHS) 4Q (.12) AMC
Clearwire Corp. (CLWR) 4Q (1.04) BMO
Heelys Inc. (HLYS) 4Q .01 AMC
Jackson Hewitt Tax Svc Inc. (JTX) 3Q .97 BMO
Semtech Corp. (SMTC) 4Q .21 AMC
Staples Inc. (SPLS) 4Q .48
Take-Two Interactive Software Inc. (TTWO) 1Q (.50)
Tech Data Corp. (TECD) 4Q .87 BMO
Wellcare Health Plans Inc. (WCG) 4Q 1.610000
Wednesday
Big Lots Inc. (BIG) 4Q .84
BJ's Wholesale Club Inc. (BJ) 4Q .73 7:00AM
Brown Shoe Co. Inc. (BWS) 4Q .42 BMO
Coldwater Creek Inc. (CWTR) 4Q .00
Costco Wholesale Corp. (COST) 2Q .74
Encysive Pharms Inc. (ENCY) 4Q (.16)
FuelCell Energy Inc. (FCEL) 1Q (.24) AMC
H&R Block Inc. (HRB) 3Q .07 AMC
Men's Wearhouse Inc. (MW) 4Q .21
PETsMART Inc. (PETM) 4Q .60
Saks Inc. (SKS) 4Q .22 8:00AM
Solarfun Power Hldgs Co. Ltd. (SOLF) 4Q .22
Tivo Inc. (TIVO) 4Q (-.12) AMC
Trump Entertain Resorts Inc. (TRMP) 4Q (.36)
Thursday
Anthracite Capital Inc. (AHR) 4Q .27
Blockbuster Inc. (BBI) 4Q .19 BMO
Dynamic Materials Corp. (BOOM) 4Q .57 AMC
Gerber Scientific Inc. (GRB) 3Q .12 BMO
Jones Soda Co. (JSDA) 4Q (.02) 4:00PM
Joy Global Inc. (JOYG) 1Q .62 BMO
Marvell Tech Grp Ltd. (MRVL) 4Q .07
Orbitz Worldwide Inc. (OWW) 4Q .11
Progressive Corp. (PGR) 1Q .33
Urban Outfitters Inc. (URBN) 4Q .29 BMO
Wind River Syss Inc. (WIND) 4Q (.07) AMC
Friday
Ciena Corp. (CIEN) 1Q .36 BMO
Goldcorp Inc. (GG) 1Q .17
Volkswagen AG (VLKAY) 4Q .83
Finisar Corp. (FNSR) 3Q .02 AMC
LeapFrog Enterp Inc. (LF) 4Q (.40) 5:00PM
Midway Games Inc. (MWY) 4Q (.22) AMC
SuperGen Inc. (SUPG) 4Q .06 AMC
VeriFone Hldgs Inc. (PAY) 1Q .35
Tuesday
Chico's FAS Inc. (CHS) 4Q (.12) AMC
Clearwire Corp. (CLWR) 4Q (1.04) BMO
Heelys Inc. (HLYS) 4Q .01 AMC
Jackson Hewitt Tax Svc Inc. (JTX) 3Q .97 BMO
Semtech Corp. (SMTC) 4Q .21 AMC
Staples Inc. (SPLS) 4Q .48
Take-Two Interactive Software Inc. (TTWO) 1Q (.50)
Tech Data Corp. (TECD) 4Q .87 BMO
Wellcare Health Plans Inc. (WCG) 4Q 1.610000
Wednesday
Big Lots Inc. (BIG) 4Q .84
BJ's Wholesale Club Inc. (BJ) 4Q .73 7:00AM
Brown Shoe Co. Inc. (BWS) 4Q .42 BMO
Coldwater Creek Inc. (CWTR) 4Q .00
Costco Wholesale Corp. (COST) 2Q .74
Encysive Pharms Inc. (ENCY) 4Q (.16)
FuelCell Energy Inc. (FCEL) 1Q (.24) AMC
H&R Block Inc. (HRB) 3Q .07 AMC
Men's Wearhouse Inc. (MW) 4Q .21
PETsMART Inc. (PETM) 4Q .60
Saks Inc. (SKS) 4Q .22 8:00AM
Solarfun Power Hldgs Co. Ltd. (SOLF) 4Q .22
Tivo Inc. (TIVO) 4Q (-.12) AMC
Trump Entertain Resorts Inc. (TRMP) 4Q (.36)
Thursday
Anthracite Capital Inc. (AHR) 4Q .27
Blockbuster Inc. (BBI) 4Q .19 BMO
Dynamic Materials Corp. (BOOM) 4Q .57 AMC
Gerber Scientific Inc. (GRB) 3Q .12 BMO
Jones Soda Co. (JSDA) 4Q (.02) 4:00PM
Joy Global Inc. (JOYG) 1Q .62 BMO
Marvell Tech Grp Ltd. (MRVL) 4Q .07
Orbitz Worldwide Inc. (OWW) 4Q .11
Progressive Corp. (PGR) 1Q .33
Urban Outfitters Inc. (URBN) 4Q .29 BMO
Wind River Syss Inc. (WIND) 4Q (.07) AMC
Friday
Ciena Corp. (CIEN) 1Q .36 BMO
Goldcorp Inc. (GG) 1Q .17
Volkswagen AG (VLKAY) 4Q .83
Asian Markets Tumble...
The Nikkei fell 4.49% to its lowest since Jan. 23, the Hang Seng was off 3.07%, and the U.S. dollar fell to 102.72 yen -- its lowest since January 2005. Investors continue to fret a potential U.S. recession, and are gearing up for yet another Fed rate cut.
Saturday, March 1, 2008
Friday's Trading Summary...
U.S. Markets:
Dow -315.79 (-2.51%)
Nasdaq -60.09 (-2.58%)
S&P 500 -37.05 (-2.71%)
News That Moved the Market:
Weak Finish To a Weak a Month. The markets drifted lower the whole session, with 97% of the S&P 500 finishing with losses. AIG (AIG, -6.6%) sparked the sell-off late Thursday after announcing it lost $5.29 billion in its fiscal fourth quarter as a result of massive writedowns, and said it would not buyback any of its shares for the "foreseeable future." Stocks fell further after CNBC reported the Ambac (ABK, -5.6%) bailout had hit a significant snag. Rating agencies want the banks involved to inject more money than originally proposed. The deal is still not dead, but it was only fair that the market fall on the news after it rallied on the announcement of the deal late l ast Friday. For the month, the S&P 500 fell 3.5%, the Dow finished 3.0% lower, and the Nasdaq dropped 5.0%.
Mixed Economic Data. The Personal Consumption Expenditure indicator increased 0.4% while income rose 0.3%, both figures coming in slightly higher than expected. Core PCE was right in-line. Though this was good news, the markets moved little after it was released. The Chicago Purchasing Managers Index was announced just after the opening bell and disappointed investors, posting a reading of 44.5, well below the 49.5 expected and representing a contraction in manufacturing in the region.
Northrop wins Massive Government Contract Boeing Gets Snubbed. The Air Force announced it will use Northrop Grumman Corp. (NOC, -1.7% day; +5.3% A.H.) and EADS (an Airbus unit) to build new airborne fuel tankers, in a deal worth at least $35 billion. Additional needs such as maintenance and additional parts could add another $60 billion to the deal, making it one of the largest defense contracts ever. Most experts were expecting Boeing (BA, -2.4% day; -5.6% A.H.) to win the deal. Boeing is now expected to file a protest with the Government Accountability Office; the government did not say why Boeing was not chosen.
Quick Tics:
The Gap (GPS, +3.7%) was up after reporting a 21% increase in net income. Warren Buffet released his popular annual letter to shareholders Friday, noting "the party is over" for insurance companies and lenders should be admonished for fueling the housing bubble.
Monday's Notable Earnings:
Midway Games(MWY) After Close
Economic Events:
10:00 AM: Construction Spending
10:00 AM: ISM Index
Dow -315.79 (-2.51%)
Nasdaq -60.09 (-2.58%)
S&P 500 -37.05 (-2.71%)
News That Moved the Market:
Weak Finish To a Weak a Month. The markets drifted lower the whole session, with 97% of the S&P 500 finishing with losses. AIG (AIG, -6.6%) sparked the sell-off late Thursday after announcing it lost $5.29 billion in its fiscal fourth quarter as a result of massive writedowns, and said it would not buyback any of its shares for the "foreseeable future." Stocks fell further after CNBC reported the Ambac (ABK, -5.6%) bailout had hit a significant snag. Rating agencies want the banks involved to inject more money than originally proposed. The deal is still not dead, but it was only fair that the market fall on the news after it rallied on the announcement of the deal late l ast Friday. For the month, the S&P 500 fell 3.5%, the Dow finished 3.0% lower, and the Nasdaq dropped 5.0%.
Mixed Economic Data. The Personal Consumption Expenditure indicator increased 0.4% while income rose 0.3%, both figures coming in slightly higher than expected. Core PCE was right in-line. Though this was good news, the markets moved little after it was released. The Chicago Purchasing Managers Index was announced just after the opening bell and disappointed investors, posting a reading of 44.5, well below the 49.5 expected and representing a contraction in manufacturing in the region.
Northrop wins Massive Government Contract Boeing Gets Snubbed. The Air Force announced it will use Northrop Grumman Corp. (NOC, -1.7% day; +5.3% A.H.) and EADS (an Airbus unit) to build new airborne fuel tankers, in a deal worth at least $35 billion. Additional needs such as maintenance and additional parts could add another $60 billion to the deal, making it one of the largest defense contracts ever. Most experts were expecting Boeing (BA, -2.4% day; -5.6% A.H.) to win the deal. Boeing is now expected to file a protest with the Government Accountability Office; the government did not say why Boeing was not chosen.
Quick Tics:
The Gap (GPS, +3.7%) was up after reporting a 21% increase in net income. Warren Buffet released his popular annual letter to shareholders Friday, noting "the party is over" for insurance companies and lenders should be admonished for fueling the housing bubble.
Monday's Notable Earnings:
Midway Games(MWY) After Close
Economic Events:
10:00 AM: Construction Spending
10:00 AM: ISM Index
Friday, February 29, 2008
Berkshire Hathaway 4Q Net Slides...
Berkshire Hathaway Inc. (BRKA BRKB) posted an 18% drop in fourth-quarter net income on lower investment gains and a drop in insurance underwriting fees, and Chairman Warren Buffett warned that the insurance business is likely to get tougher in 2008.
"That party is over," the billionaire investor wrote in his annual letter to shareholders. "It's a certainty that insurance-industry profit margins, including ours, will fall significantly in 2008."
The investment holding company reported net income of $2.95 billion, or $1,904 a Class A share, compared with $3.58 billion, or $2,323 a Class A share, a year earlier.
Analysts surveyed by Thomson Financial had expected the Omaha, Neb., company to post earnings of $1,606 a share.
"That party is over," the billionaire investor wrote in his annual letter to shareholders. "It's a certainty that insurance-industry profit margins, including ours, will fall significantly in 2008."
The investment holding company reported net income of $2.95 billion, or $1,904 a Class A share, compared with $3.58 billion, or $2,323 a Class A share, a year earlier.
Analysts surveyed by Thomson Financial had expected the Omaha, Neb., company to post earnings of $1,606 a share.
Stocks Plunge on Inflation Worries....
Credit losses from American International Group combine with troubling growth and inflation data to diminish hopes that the U.S. stock market and the economy have seen the worst this year.
DJIA ends down 316 points, with all 30 components lower. The Nasdaq Composite falls 60 points.
DJIA ends down 316 points, with all 30 components lower. The Nasdaq Composite falls 60 points.
Ugly Market....
Want to see some Bad Breadth:
NYSE
Advances 417
Declines 2528 6:1
Advancing Volume 34 Million shares
Declining Volume 373 Million shares 11:1
As a result:
Dow -216
S&P -24
Nasdaq -41
It is no longer coincidence that when Bush and Bernanke speak....the market sells off....
NYSE
Advances 417
Declines 2528 6:1
Advancing Volume 34 Million shares
Declining Volume 373 Million shares 11:1
As a result:
Dow -216
S&P -24
Nasdaq -41
It is no longer coincidence that when Bush and Bernanke speak....the market sells off....
Today's Upgrades...
Stocks Upgraded this Morning...
Nippon Telegraph (NTT) by Credit Suisse
Deutsche Telekom (DT) by Citigroup
Quest Diagnostics (DGX) by Credit Suisse
Dell (DELL) by Friedman Billings
Deckers Outdoor (DECK) by RBC Capital Mkts
Entergy (ETR) by UBS
Repsol SA (REP) by UBS
Pfizer (PFE) by Lehman Brothers
Nippon Telegraph (NTT) by Credit Suisse
Deutsche Telekom (DT) by Citigroup
Quest Diagnostics (DGX) by Credit Suisse
Dell (DELL) by Friedman Billings
Deckers Outdoor (DECK) by RBC Capital Mkts
Entergy (ETR) by UBS
Repsol SA (REP) by UBS
Pfizer (PFE) by Lehman Brothers
Today's Downgrades....
Stocks Dowgraded this Morning....
Take-Two (TTWO) by Cowen & Co
Carrizo Oil & Gas (CRZO) by CapitalOne southcoast
Jackson Hewitt (JTX) by FTN Midwest
InterNAP (INAP) by RBC Capital Mkts
EOG Resources (EOG) by RBC Capital Mkts
BEA Systems (BEAS) by Deutsche Securities
R.H. Donnelley (RHD) by Bear Stearns
Omnicare (OCR) by Bear Stearns
Novartis AG (NVS) by HSBC Securities
American Intl Group (AIG) by Keefe Bruyette
MF Global (MF) by Lehman Brothers
R.H. Donnelley (RHD) by Deutsche Securities
Take-Two (TTWO) by Cowen & Co
Carrizo Oil & Gas (CRZO) by CapitalOne southcoast
Jackson Hewitt (JTX) by FTN Midwest
InterNAP (INAP) by RBC Capital Mkts
EOG Resources (EOG) by RBC Capital Mkts
BEA Systems (BEAS) by Deutsche Securities
R.H. Donnelley (RHD) by Bear Stearns
Omnicare (OCR) by Bear Stearns
Novartis AG (NVS) by HSBC Securities
American Intl Group (AIG) by Keefe Bruyette
MF Global (MF) by Lehman Brothers
R.H. Donnelley (RHD) by Deutsche Securities
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