Every afternoon we provide an update on global market levels, company news, economic news, and hedge fund news.
Post Market Update
- US: Dow: 12573.60 (-1.96%), S&P 500: 1325.51 (-2.23%), NASDAQ: 2859.09 (-2.44%)
- Europe: CAC: 3114.22 (-0.39%), DAX: 6343.13 (-0.77%), FTSE: 5566.36 (-1.00%).
- Asia-Pacific: Australia: 4087.60 (-1.08%), China: 2260.88 (-1.42%), Hong Kong: 19265.07 (-1.32%), India: 5165.00 (0.87%), Japan: 8824.07 (0.81%).
- Metals: Gold: 1565.50 (-3.11%), Silver: 26.84 (-5.46%), Copper: 3.30 (-2.64%)
- Energy: Crude Oil: 78.20 (-3.99%), Natural Gas: 2.58 (2.58%)
- Commodities: Corn: 5.50 (-2.91%), Soya Bean: 13.71 (-1.74%), Wheat: 7.00 (-0.81%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2545 (1.26%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5589 (0.77%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 80.3050 (1.06%)
- 10 year US Treasury: 1.618% (-0.039)
Market and Economy News Update
U.S. markets deep in the red: U.S. markets suffered their second worst fall of the year, as a bearish recommendation from Goldman Sachs added to weak U.S. housing and labor market data. Media reports of a Moody’s downgrade of some big banks also helped accelerate declines. The Dow Jones Industrial Average (INDEXDJX:.DJI) dropped 2 percent to 12573.57. The S&P 500 (INDEXSP:.INX) fell 2.2 percent to 1325.51, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) shed 2.4 percent to 2859.09.
Philadelphia Fed index plunges in June: Manufacturing in the Philadelphia region contracted for the second consecutive month in June, amid a decline in new business orders and shipments. The Federal Reserve Bank of Philadelphia’s general economic index, considered a strong barometer of demand, dropped to minus 16.6 in June, from minus 5.8 in May. Economists were expecting a reading of zero.
U.S. existing home sales fell in May: Sales of previously owned U.S. homes fell in May, suggesting an uneven recovery in residential real estate market. Existing-home sales slipped 1.5 percent to a seasonally adjusted annual rate of 4.55 million units in May, the National Association of Realtors said today. Economists were looking for a decrease to an annual rate of 4.57 million units.
Oil prices tumble: Oil prices plunged below $80 a barrel on Thursday as dismal economic data from the United States, China and the eurozone pointed to a global economic slowdown. Crude oil for August delivery slumped 3.99 percent, to settle at $78.20 a barrel on the New York Mercantile Exchange. Brent oil for August settlement dropped 3.7 percent to $89.23 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Moody’s Investors Service downgraded the debt ratings of 15 banks, which included U.S. names like Bank of America Corp (NYSE:BAC), Citigroup Inc. (NYSE:C), Goldman Sachs Group, Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM) and Morgan Stanley (NYSE:MS). More on story here.
- Nomura Securities today initiated coverage of Facebook Inc (NASDAQ:FB) with a “buy” rating and a price target of $40.
- Chesapeake Energy Corporation (NYSE:CHK) has named former Chairman of ConocoPhillips (NYSE:COP), Archie Dunham, as its new chairman. Dunham will replace controversial founder Aubrey McClendon.
- Electronics retailer Best Buy Co., Inc. (NYSE:BBY) has increased its dividend by one penny per share to 17 cents.
- Biopharmaceutical company Celgene Corporation (NASDAQ:CELG) withdrew its application to market blood-cancer drug Revlimid in the European Union, following questions from European regulators about the treatment’s links to other cancers.
- The Financial Industry Regulatory Authority has slapped a fine of $2.8 million on Bank of America Corp (NYSE:BAC)’s Merrill Lynch wealth-management unit for over charging customers $32.2 million in fees over an eight year period.
- Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) surged 43 percent in trade today, after the U.S. Food and Drug Administration’s Oncologic Drugs Advisory Committee panel recommended the approval of an experimental blood cancer drug, carfilzomib.
- Oil services company Key Energy Services, Inc. (NYSE:KEG) said second-quarter results will miss prior projections due to a decline in natural gas prices. The company also cut its full-year earnings guidance.
- Diversified manufacturing company 3M Co (NYSE:MMM) has agreed to buy the electronic tolling business of Federal Signal Corporation (NYSE:FSS) for $110 million.
- Nursing-home provider Sun Healthcare Group Inc (NASDAQ:SUNH) soared 37 percent after agreeing to be acquired by privately held rival Genesis Healthcare in a $217 million deal.
- Dry bulk shipper Eagle Bulk Shipping Inc. (NASDAQ:EGLE) closed 31 percent higher after reaching an agreement with a syndicate of its lenders, led by Royal Bank of Scotland Group plc (NYSE:RBS), to restructure its $1.13 billion in debt.
Hedge Fund News Update
- Nelson Peltz‘s Trian Group, which holds a 7.05 percent stake in industrial conglomerate, Ingersoll-Rand PLC (NYSE:IR), turned down a board seat; a regulatory filing disclosed on Wednesday.
- BlueMountain Capital Management LLC, co-founded by Andrew Feldstein, is helping JPMorgan Chase & Co. (NYSE:JPM) unwind its huge position in the credit-default swap index, which was at the heart of the $2 billion loss last month, Bloomberg reported. Feldstein is a former JPMorgan Chase executive, who helped build the credit-default swaps market.
- According to Pierre Lagrange, who manages the $2bn Long Short Fund at GLG Partners, part of the world’s second-largest hedge fund, Man Group Plc (LON:EMG), trying to keep Greece in the euro was futile and damaging to the bloc.
- New York-based Hyaline Capital Management, founded by former Morgan Stanley proprietary trader, Tony D’Andraia, and FBR Capital Management veteran, Justin Meadlin, will launch its maiden fund next month.
- Investors last month slashed their exposure to hedge funds that invest in Europe, as the sovereign debt crisis, and a slowdown in the region, eroded investor confidence, data from hedge fund tracking firm eVestment|HFN showed.
- Luxembourg, one of the biggest hedge fund domiciles in Europe, saw total hedge fund assets soar to an all-time high of 2.23 trillion euros ($2.8 trillion) at the end of April 2012.
- The $3.3 billion Colorado Fire & Police Pension Association invested around $30 million in a hedge fund managed by Bill Ackman’s Pershing Square Capital Management.
- Todd Esse’s $625-million Sasco Energy Partners fund is up 10 percent this year, at a time when energy funds are going through one of the industry’s most challenging years.
Brokerage Upgrades and Downgrades on Thursday, June 21, 2012
- EQT Corporation (NYSE:EQT) was upgraded to “buy” from “hold” at Deutsche Bank with a target price of $59.
- NIC Inc. (NASDAQ:EGOV) was raised to “buy” rating by analysts at Dougherty & Co.
- MedAssets, Inc. (NASDAQ:MDAS) was lifted to “buy” from “neutral” at UBS AG with a price target of $18.
- NuVasive, Inc. (NASDAQ:NUVA) was upgraded to “outperform” from “market perform” at Wells Fargo & Co.
- Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) was raised to “outperform” from “neutral” at Robert W. Baird. Analysts at Brean Murray also upgraded the stock to “buy” from “neutral” with a price target of $60.
- Seadrill Ltd (NYSE:SDRL) was lifted to “overweight” from “neutral” at HSBC Securities.
- Xylem Inc (NYSE:XYL) was upgraded to “buy” from “neutral” at Janney Montgomery Scott.
- BAE Systems PLC (ADR) (NASDAQ:BAESY) was cut to “neutral” from “buy” at Citigroup.
- Chimera Investment Corporation (NYSE:CIM) was downgraded to “underperform” from “neutral” at Bank of America. The stock was also cut to “neutral” from “outperform” by analysts at Credit Suisse.
- CenterPoint Energy, Inc. (NYSE:CNP) was lowered to “neutral” from “outperform” at Credit Suisse with a target price of $21.
- Overland Storage, Inc. (NASDAQ:OVRL) was cut to “hold” from “speculative buy” at The Benchmark Company.
- Under Armour Inc (NYSE:UA) was downgraded to “neutral” from “buy” at UBS AG with a price target of $105.
- Wright Express Corp (NYSE:WXS) was lowered to “sell” from “neutral” at Citigroup with a target price of $56.
- Zumiez Inc. (NASDAQ:ZUMZ) was cut to