Market Levels
- US: Dow: 12824.40 (-0.10%), S&P 500: 1355.69 (-0.17%), NASDAQ: 2930.45 (0.02%)
- Europe: CAC: 3126.52 (0.28%), DAX: 6392.13 (0.45%), FTSE: 5622.29 (0.64%).
- Asia-Pacific: Australia: 4132.40 (0.22%), China: 2292.88 (-0.35%), Hong Kong: 19518.85 (0.52%), India: 5120.55 (0.33%), Japan: 8752.31 (1.10%).
- Metals: Gold: 1615.80 (-0.46%), Silver: 28.39 (0.07%), Copper: 3.39 (-1.34%)
- Energy: Crude Oil: 81.80 (-2.65%), Natural Gas: 2.52 (-1.10%)
- Commodities: Corn: 5.66 (0.53%), Soya Bean: 13.95 (0.79%), Wheat: 7.06 (1.80%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2707 (-0.14%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5718 (0.05%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.5050 (0.67%)
- 10 year US Treasury: 1.657% (0.038)
Market and Economy News Update
U.S. markets end mixed: U.S. markets closed mixed in volatile trading on Wednesday after the Federal Reserve extended Operation Twist to December, but stopped short of announcing a more aggressive stimulus program. The Dow Jones Industrial Average (INDEXDJX:.DJI) finished 0.10 percent lower at 12824.31. The S&P 500 (INDEXSP:.INX) fell 0.17 percent to 1355.69, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) edged up 0.02 percent to 2930.45.
Oil prices fall: Oil prices plunged to their lowest level in a year and a half on Wednesday after the U.S. Energy Information Administration reported that U.S. crude inventories jumped to their highest level in 22 years. Crude oil for July delivery slumped 2.7 percent, to settle at $81.80 a barrel on the New York Mercantile Exchange. Brent oil for August settlement dropped 3.2 percent to $92.69 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Bed Bath & Beyond Inc. (NASDAQ:BBBY) reported a 15 percent jump in fiscal second quarter profit to $206.8 million, or 89 cents per share, from $180.6 million, or 72 cents per share, in the year ago period, but provided a weaker-than-expected outlook for the current quarter.
- Red Hat, Inc. (NYSE:RHT) posted fiscal first quarter earnings of 30 cents a share, on revenue of $314.7 million, that topped analysts’ estimates.
- Financial stocks ended the day higher after the U.S. Federal Reserve extended its “Operation Twist” program to the end of the year. J.P. Morgan Chase & Co. (NYSE:JPM) was up 3 percent, Citigroup Inc. (NYSE:C) gained 1.3 percent and Jefferies Group, Inc. (NYSE:JEF) increased 2.5 percent.
- · J.P. Morgan Chase & Co. (NYSE:JPM) has substantially reduced its exposure to a credit derivatives index that caused huge trading losses for the bank, CNBC reported.
- Burger King (BKW), the world’s second largest hamburger chain, debuted on the New York Stock Exchange, two years after being taken private by owner 3G Capital Management. The stock closed 3.7 percent higher.
- A Dutch court today ordered Apple Inc. (NASDAQ:AAPL) to pay damages to Samsung over a 3G patent violation.
- Chinese oil giant China Petroleum & Chemical Corporation (HKG:0386) is planning to table a multibillion dollar bid for Chesapeake Energy Corporation (NYSE:CHK) assets, the Financial Times reported.
- Wells Fargo & Company (NYSE:WFC), which is planning to cut expenses by $1.7 billion, may move some jobs in the technology and the retirement division to India and the Philippines.
- Conagra Foods, Inc. (NYSE:CAG) said a lawsuit that claims its hot dogs and other products sold under its Hebrew National brand are not kosher, is without merit.
- T-Mobile USA Inc., a unit of Deutsche Telekom AG (ETR:DTE), received bids from American Tower Corp (NYSE:AMT) and Crown Castle International Corp. (NYSE:CCI) for its cellular towers, Bloomberg reported.
- Hotel franchiser Choice Hotels International, Inc. (NYSE:CHH) surged 7.2 percent on news the company was planning to pay a special dividend of nearly $10 per share.
- Osiris Therapeutics, Inc. (NASDAQ:OSIR) soared 8.4 percent in New York trading, after its life-saving stem cell therapy, Prochymal, received a second regulatory approval.
- Biochemical company Gevo, Inc. (NASDAQ:GEVO) said a U.S. district court had ruled that it had not infringed any patents held by rival Butamax Advanced Biofuels LLC, and was free to sell its renewable fuel products.
- Diagnostic-product developer AspenBio Pharma, Inc. (NASDAQ:APPY) plunged 37 percent in trade today, after the company announced it will sell 6.1 million shares at $2 per share.
Hedge Fund News Update
- Michael Dell-affiliated credit fund, the MSD Credit Opportunity Fund, has loaned out an undisclosed amount of capital to Harbinger Capital Partners’ flagship hedge fund, Harbinger Capital Partners Master Fund I Ltd.
- Man Group Plc (LON:EMG), the $59 billion hedge fund firm, has hired Tim Peach as managing director and head of its Asia-Pacific operations.
- Hedge fund Lone Pine Capital LLC increased its stake in clothing retailer, Esprit Holdings Limited (HKG:0330), buying 1.39 million shares on June 13 and 14.1 million shares on June 15.
- For the third consecutive year, commodity hedge funds fared badly in May. The Brevan Howard Commodities Strategies Master Fund Ltd. was down 2 percent last month, the Taylor Woods Master Fund Ltd. fell 4.2 percent and Galena Asset Management Ltd.’s metals fund, run by Duncan Neil Letchford, shed 2.6 percent in May
- The Chicago Transit Authority Employees Retirement Plan, the $1.8 billion pension, is looking for a low-volatility fund of funds or funds of funds, which will be allocated $30 million.
- Julian Robertson, founder of hedge fund New York-based Tiger Management LLC, is betting the euro will fall further, amid the absence of any resolution to the region’s sovereign debt crisis, Bloomberg reported.
- ABN Amro’s private banking business has upgraded its hedge fund allocation from neutral to overweight, Bloomberg reported.
- Data from hedge fund tracking firm eVestment|HFN showed that hedge fund assets fell $18.8 billion last month, despite net inflows of $9.5 billion in May.
- Hedge fund advisor Pyxis Capital, L.P. has named former Executive Vice President of Ivy Funds, J. Bradley Ross, as President.
Brokerage Upgrades and Downgrades on Wednesday, June 20, 2012
- Applied Materials, Inc. (NASDAQ:AMAT) was upgraded to “overweight” from “Equal Weight” at Barclays Capital with a target price of $15.
- BEAM Inc (NYSE:BEAM) was raised to “buy” from “hold” at Argus with a price target of $74.
- Choice Hotels International, Inc. (NYSE:CHH) was lifted to “neutral” from “underperform” at Robert W. Baird with a target price of $38.
- Gevo, Inc. (NASDAQ:GEVO) was upgraded to “outperform” from “neutral” at Cowen.
- Mitel Networks Corporation (NASDAQ:MITL) was raised to “buy” from “hold” at Canaccord Genuity.
- PennantPark Investment Corp. (NASDAQ:PNNT) was lifted to “outperform” from “market perform” at FBR Capital with a price target of $11.
- Adobe Systems Incorporated (NASDAQ:ADBE) was cut to “underperform” from “market perform” at JMP Securities with a target price of $26. Atlantic Equities also cut the stock to “neutral” from “overweight”.
- Cirrus Logic, Inc. (NASDAQ:CRUS) was downgraded to “buy” from “strong buy” at Needham & Company with a price target of $35.
- HSN, Inc. (NASDAQ:HSNI) was lowered to “neutral” from “buy” at Citigroup with a target price of $42.50.
- The Southern Company (NYSE:SO) was cut to “neutral” from “buy” at Bank of America with a price target of $48.
- Walgreen Company (NYSE:WAG) was downgraded to “hold” from “buy” at Argus.
- WellPoint, Inc. (NYSE:WLP) was lowered to “neutral” from “market perform” at Credit Suisse with a target price of $30.
