Every afternoon ValueWalk provides an update on global market levels, economic news, and hedge fund news. Today’s highlights for May 22nd, 2012
Post Market Update
- US: Dow: 12508.80 (-0.01%), S&P 500: 1316.63 (0.05%), NASDAQ: 2839.08 (-0.29%)
- Europe: CAC: 3084.09 (1.85%), DAX: 6435.60 (1.62%), FTSE: 5403.28 (1.83%).
- Asia-Pacific: Australia: 4121.00 (1.16%), China: 2373.31 (1.05%), Hong Kong: 19039.15 (0.61%), India: 4860.50 (-0.93%), Japan: 8729.29 (1.09%).
- Metals: Gold: 1576.60 (-0.76%), Silver: 28.18 (-0.50%), Copper: 3.49 (-0.43%)
- Energy: Crude Oil: 91.50 (-1.38%), Natural Gas: 2.71 (3.76%)
- Commodities: Corn: 5.97 (-5.69%), Soya Bean: 12.82 (-1.84%), Wheat: 6.85 (-2.63%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2688 (0.99%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5765 (0.40%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 79.9450 (0.81%)
- 10 year US Treasury: 1.769% (0.027)
Market and Economy News Update
U.S. markets end flat: U.S. markets erased gains made earlier in the day and ended flat on Tuesday amid rising concerns that Greece would exit the euro zone. Greek Prime Minister Lucas Papademos said the debt-ridden nation is considering preparedness for its exit from the euro zone. The Dow Jones Industrial Average (INDEXDJX:.DJI) erased 0.01 percent to close at 12,502.81. The S&P 500 (INDEXSP:.INX) eked out a gain of 0.05 percent to end at 1,316.63, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) slipped 0.29 percent to finish at 2,839.08.
Oil prices fall: Oil prices fell on Tuesday as Iran’s approval to let in United Nations nuclear inspectors eased fears of oil supply disruptions. Crude oil for June delivery slipped 1.4 percent, to settle at $91.50 a barrel on the New York Mercantile Exchange. Brent oil for July settlement declined 0.4 percent to $108.41 a barrel on the London-based ICE Futures Europe exchange.
Company News Update
- Computer maker Dell Inc. (NASDAQ:DELL) posted fiscal first quarter earnings per share of 43 cents, on revenue of $14.4 billion, below the average analysts’ estimate of earnings of 46 cents a share on revenue of $14.91 billion. For the current quarter, the company projected revenue growth of 2 to 4 percent, which also trailed estimates.
- Video game publisher Take-Two Interactive Software, Inc. (NASDAQ:TTWO) reported fiscal fourth quarter loss excluding items of 60 cents a share on revenue of $148.1 million that was below analysts’ projection of a loss of 54 cents a share on $140 million in revenue.
- After tumbling almost 11 percent in the previous session, Facebook Inc (NASDAQ:FB) shares took another drubbing on Tuesday, closing the day 8.9 percent lower at $31.
- JPMorgan Chase & Co. (NYSE:JPM) has hired William McLucas, a former U.S. Securities and Exchange Commission enforcement chief, to help respond to a SEC probe of the bank’s shock $2 billion loss on credit derivatives trades, Bloomberg News reported.
- Google Inc (NASDAQ:GOOG) has announced the completion of its $12.5 billion acquisition of US phone maker Motorola Mobility Holdings Inc (NYSE:MMI), and has named Dennis Woodside, previously president of Google’s Americas region as the new chief executive officer.
- SAP AG (NYSE:SAP), the world’s largest business management software maker, has agreed to acquire Sunnyvale, California-based cloud computing company Ariba, Inc. (NASDAQ:ARBA) for $45.00 per share, or about $4.51 billion.
- Ford Motor Company (NYSE:F) was raised to investment grade by Moody’s Investors Service; just a month after the auto-maker was assigned an investment grade rating by Fitch.
- Auto parts retail chain AutoZone, Inc. (NYSE:AZO) reported better than expected third quarter earnings of $6.28 a share, but revenue trailed estimates.
- Teen apparel retailer Urban Outfitters, Inc. (NASDAQ:URBN) reported a first quarter profit of $34.0 million, or 23 cents a share, beating the 20 cents a share that analysts were expecting.
- Specialty retailer Express, Inc. (NYSE:EXPR) posted lower than expected first quarter net income of $42.1 million, or 47 cents a share, and slashed its full year earnings forecast.
- Chicago-based commercial-printing company R.R. Donnelley & Sons Company (NASDAQ:RRD) has agreed to buy financial data company Edgar Online, Inc. (NASDAQ:EDGR) for about $70.5 million, including debt.
Hedge Fund News Update
- George Soros’ New York-based hedge fund, Soros Fund Management has dumped all the 259,900 Google Inc (NASDAQ:GOOG) shares it held at the end of 2011, and reduced its stake in Apple Inc. (NASDAQ:AAPL) by half, according to Wall Street research firm, SNL Financial. Soros’ fund also quadrupled its investment in banks to $196.5 million at the end of March 2012, which included names like JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc. (NYSE:C), Suntrust Banks, Inc. (NYSE:STI), Capital One Financial Corp. (NYSE:COF) and Fifth Third Bancorp (NASDAQ:FITB).
- According to the GlobeOp Forward Redemption Indicator, hedge fund redemptions were up in May. The indicator which measures the sum of forward redemption notices as a percentage of GlobeOp’s assets under administration, stood at 3.31 percent in May, up from 2.00 percent in April.
- The Asian prime brokerage units of Goldman Sachs Group, Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS) have seen their market share almost halve, with Credit Suisse Group AG (USA) (NYSE:CS), Deutsche Bank AG (USA) (NYSE:DB) and UBS AG (USA) (NYSE:UBS) capturing more than 10 percent each of the market space, the annual AsiaHedge survey showed.
- London-based CTA hedge fund Harmonic Capital, has announced the appointment of Per Ivarsson, who has been with the firm since 2007, as a partner.
- Chilean pension funds will have to hedge as much of 50 percent of their foreign equity holdings and at least 50 percent of their foreign fixed-income holdings, according to new proposals presented by the industry regulator.
Brokerage Upgrades and Downgrades on Tuesday, May 22, 2012
- Auxilium Pharmaceuticals, Inc. (NASDAQ:AUXL) was upgraded to “buy” from “neutral” at MKM Partners with a target price of $21.
- EnerNOC, Inc. (NASDAQ:ENOC) was raised to “buy” from “hold” at Needham & Company with a target price of $7.5.
- Hancock Holding Company (NASDAQ:HBHC) was upgraded to “buy” from “hold” at Stifel Nicolaus with a target price of $36.
- V.F. Corporation (NYSE:VFC) was raised to “buy” from “neutral” at Janney Montgomery Scott with a target price of $160.
- Western Refining, Inc. (NYSE:WNR) was upgraded to “buy” from “hold” at Dahlman Rose with a target price of $25.
- Cooper Industries plc (NYSE:CBE) was cut to “market perform” from “outperform” at FBR Capital with a target price of $72.
- Cooper Industries plc (NYSE:CBE) was downgraded to “hold” from “buy” at KeyBanc Capital Mkts.
- Knight Transportation (NYSE:KNX) was cut to “hold” from “buy” at KeyBanc Capital Mkts.
- Redwood Trust, Inc. (NYSE:RWT) was downgraded to “underperform” from “market perform” at FBR Capital with a target price of $10.
- Charles Schwab Corp (NYSE:SCHW) was cut to “underperform” from “market perform” at Raymond James.