Market Levels
- US: Dow: 12580.70 (1.01%), S&P 500: 1332.42 (1.11%), NASDAQ: 2870.99 (1.18%)
- Europe: CAC: 3084.70 (1.35%), DAX: 6396.84 (1.15%), FTSE: 5391.14 (0.65%).
- Asia-Pacific: Australia: 4114.40 (1.14%), China: 2389.64 (1.18%), Hong Kong: 19055.46 (1.34%), India: 4990.10 (0.09%), Japan: 8657.08 (0.74%).
- Metals: Gold: 1548.70 (-1.29%), Silver: 27.79 (-2.10%), Copper: 3.46 (0.41%)
- Energy: Crude Oil: 90.76 (-0.11%), Natural Gas: 2.43 (-5.41%)
- Commodities: Corn: 5.62 (-2.77%), Soya Bean: 12.93 (0.33%), Wheat: 6.56 (-3.42%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2491 (-0.39%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5638 (-0.27%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 79.5100 (0.06%)
- 10 year US Treasury: 1.745% (0.007)
Market and Economy News Update
U.S. markets end higher: U.S. markets finished higher on Tuesday as data signaled the American housing market stabilized, and Greek election polls pointed to support for pro-bailout parties. The Dow Jones Industrial Average (INDEXDJX:.DJI) jumped 1.01 percent to close at 12,580.69. The S&P 500 (INDEXSP:.INX) gained 1.11 percent to end at 1,332.42, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) rallied 1.18 percent to finish at 2,870.99.
Oil prices slip: Oil prices declined in choppy trading on Tuesday after a downgrade of Spain’s credit rating pushed the euro to the lowest level in almost two years. Crude oil for July delivery fell 0.1 percent, to settle at $90.76 a barrel on the New York Mercantile Exchange. Brent oil for July settlement dropped 0.4 percent to $106.68 a barrel on the London-based ICE Futures Europe exchange.
Company News Update
- Facebook Inc (NASDAQ:FB) slumped below $30 for the first time since its much-awaited public debut earlier this month. The stock ended 9.6 percent lower at $28.84.
- Embattled BlackBerry maker, Research In Motion Limited (USA) (NASDAQ:RIMM) has hired JPMorgan Chase & Co. (NYSE:JPM) and RBC Capital Markets to advise on strategic options, and said it expects an operating loss in the first quarter.
- Texas- based Anadarko Petroleum Corporation (NYSE:APC) and Noble Corporation (NYSE:NE) have agreed to settle their $102 million legal dispute over Anadarko’s termination of its lease contract for Noble’s offshore oil rig in June 2010 after BP plc (ADR) (NYSE:BP)’s Gulf of Mexico oil spill brought some U.S. offshore drilling to a halt.
- DirecTV (NASDAQ:DTV), the largest satellite pay- television service, said that Dan York, the former president of content and advertising sales for AT&T Inc. (NYSE:T), will succeed Derek Chang as chief content officer. Chang will be leaving at the end of the year.
- Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) plunged almost 11 percent in trade today after the company said previously announced results from a clinical trial of two cystic fibrosis drugs overstated the benefits of the drug combination.
- Defense equipment manufacturer Teledyne Technologies Incorporated (NYSE:TDY) has agreed to acquire New York-based instrumentation and measurement firm LeCroy Corporation (NASDAQ:LCRY) for about $240.6 million in cash to expand its product portfolio.
- Austin, Texas-based maker of signal processing chips, Cirrus Logic, Inc. (NASDAQ:CRUS), soared 7.1 percent in New York trading after media reports speculated that it will win more orders from its largest customer, Apple Inc. (NASDAQ:AAPL).
- Tech company FormFactor, Inc. (NASDAQ:FORM) boosted its second quarter revenue outlook for the second quarter, citing higher demand for its memory chips. The company now expects second quarter revenue of $50 million to $54 million, much better than the average analysts’ estimate of $42.7 million.
- North American Energy Partners Inc. (USA) (NYSE:NOA) has named Martin Ferron, former chief executive of Helix Energy Solutions Group Inc. (NYSE:HLX), as the new President and Chief Executive Officer.
Hedge Fund News Update
- Hedge funds are shorting the bonds of core euro zone countries like France and Germany hoping that these countries, once considered safe havens, would be also be dragged down by the deepening of crisis in peripheral states like Greece and Spain.
- Hedge funds are rushing in to go short on Spanish bank Bankia, as evident from a key gauge of short-selling interest that showed that as of last week, 89 percent of Bankia’s stock which can be borrowed was out on loan, up from 61 percent in the final week of March.
- A new study conducted by the Centre for Hedge Fund Research, and commissioned by KPMG, and the Alternative Investment Management Association, has found that hedge funds have outperformed traditional asset classes such as equities, bonds and commodities for the last 17 years.
- Data from the Commodity Futures Trading Commission showed that fund managers had turned bullish on wheat contracts just days before the grain tumbled for three consecutive sessions. On the contrary, money managers offloaded nearly $670 million worth of long positions in copper, managing to avert the 3 percent slump in the price of the metal on May 22 and 23.
- According to a new report from BofA Merrill Lynch Global Research, hedge funds are aggressively buying 30-year Treasury bond futures, betting that interest rates will drop.
- · Arpad Busson’s fund of funds manager EIM might be up for sale, after assets fell by more than half since the financial crisis.
- London-based hedge fund Winton Capital Management will open an office in Zurich in the hope of attracting top scientific talent to the firm, Financial News reported. Physicist and founder of Winton, David Harding said that the firm chose the Swiss town because of its high scientific pedigree that includes a couple of top universities.
- Hong Kong-based Expedition Advisors has hired Kam Bahra, the former chief executive of Japanese money manager Sparx Group, as chief operating officer.
Brokerage Upgrades and Downgrades on Tuesday, May 29, 2012
- Foot Locker, Inc. (NYSE:FL) was raised to “buy” from “hold” at Deutsche Bank with a target price of $38.
- Intersil Corp (NASDAQ:ISIL) was upgraded to “buy” from “hold” at Needham with a target price of $13.
- L-3 Communications Holdings, Inc. (NYSE:LLL) was raised to “perform” from “underperform” at Oppenheimer.
- USG Corporation (NYSE:USG) was upgraded to “buy” from “neutral” at Longbow with a target price of $20.
- Vail Resorts, Inc. (NYSE:MTN) was raised to “buy” from “hold” at Stifel Nicolaus with a target price of $53.
- Gafisa SA (ADR) (NYSE:GFA) was cut to “underweight” from “neutral” at JPMorgan Chase.
- Mechel OAO (ADR) (NYSE: MTL) was downgraded to “sell” from “buy” at Societe Generale.
- Tenet Healthcare Corporation (NYSE:THC) was cut to “fair value” from “buy” at CRT Capital.
- Seagate Technology PLC (NYSE: STX) was downgraded to “equal weight” from “overweight” at Barclays Capital with a target price of $29.
- Western Digital Corp. (NYSE: WDC) was cut to “equal weight” from “overweight” at Barclays Capital with a target price of $37.
