Every afternoon we provide an update on global market levels, company news, economic news, and hedge fund news. In focus today; Updates on PEET, TXN, JCP, T, RF, R, LMT, UPS, WU
Post Market Update
- US: Dow: 12721.50 (-0.79%), S&P 500: 1350.52 (-0.89%), NASDAQ: 2890.15 (-1.20%)
- Europe: CAC: 3101.53 (-2.98%), DAX: 6419.33 (-3.28%), FTSE: 5533.87 (-2.13%).
- Asia-Pacific: Australia: 4128.90 (-1.67%), China: 2141.40 (-1.27%), Hong Kong: 19053.47 (-3.08%), India: 5117.95 (-1.67%), Japan: 8508.32 (-1.90%).
- Metals: Gold: 1577.40 (-0.34%), Silver: 27.04 (-0.95%), Copper: 3.38 (-1.97%)
- Energy: Crude Oil: 88.14 (-4.02%), Natural Gas: 3.12 (1.17%)
- Commodities: Corn: 7.85 (-1.29%), Soya Bean: 16.22 (-3.80%), Wheat: 9.19 (-3.08%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2119 (0.31%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5511 (0.71%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.3650 (-0.19%)
- 10 year US Treasury: 1.426% (-0.030)
Market and Economy News Update
U.S. markets end lower: U.S. markets managed to recover from lows made earlier in the day but still closed in the red as concerns about Spain’s debt problems sparked a global sell-off. Investors flocked to the safety of U.S. Treasurys where the 10-year yield hit a new record low of 1.395 percent. The Dow Jones Industrial Average (INDEXDJX:.DJI) fell 101.11 points, or 0.79 percent, to finish at 12,721.46. The S&P 500 (INDEXSP:.INX) slumped 12.14 points, or 0.89 percent, to close at 1,350.52, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) dropped 35.15 points, or 1.20 percent, to end at 2,890.15.
Oil prices tumble: Oil prices fell sharply on Monday amid concerns that the European sovereign-debt crisis is spreading, and Chinese economic expansion may slow. Crude oil for August delivery plunged 4 percent, to settle at $88.14 a barrel on the New York Mercantile Exchange. Brent oil for September settlement fell 3.3 percent to $103.26 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Texas Instruments Incorporated (NASDAQ:TXN) posted second quarter earnings, excluding items of 44 cents per share, on revenue of $3.34 billion. Analysts were expecting second-quarter earnings excluding certain items of 41 cents per share on revenue of $3.35 billion. The company forecast third-quarter earnings and revenue that fell short of some estimates.
- Zions Bancorporation (NASDAQ:ZION) reported second quarter earnings, excluding one-time items, of 40 cents a share, on revenue of $555 million, that beat expectations for 33 cents a share on revenue of $553 million.
- Chinese search engine, Baidu.com, Inc. (ADR) (NASDAQ:BIDU) reported second quarter revenue and earnings per share that topped analysts’ estimates, but forecast third quarter revenue that was slightly below Street expectations.
- Dell Inc. (NASDAQ:DELL) has won approval from federal antitrust regulators to buy IT company Quest Software, Inc. (NASDAQ:QSFT), in a deal worth $2.4 billion.
- Cisco Systems, Inc. (NASDAQ:CSCO) will cut about 1,300 jobs, or 2 percent of its global workforce, as part of a restructuring plan to bring down costs, Bloomberg reported.
- Enterprise software maker VMware, Inc. (NYSE:VMW) will buy privately held Nicira Inc. that specializes in open source software for network virtualization, for $1.05 billion in cash.
- Cafe chain, Peet’s Coffee & Tea, Inc. (NASDAQ:PEET) agreed to be taken private by German Conglomerate Joh. A. Benckiser for $977 million in cash.
- Aerospace and defense products maker, Gencorp Inc (NYSE:GY) has agreed to buy United Technologies Corporation (NYSE:UTX)’ Rocketdyne unit for about $550 million.
- Department store operator, J.C. Penney Company, Inc. (NYSE:JCP), sold its stake in shopping mall developer, Simon Property Group, Inc (NYSE:SPG) for $248 million, as part of a plan to offload non-core assets.
- Sonic Automotive Inc (NYSE:SAH), the country’s third-largest auto dealer group, reported second quarter earnings, excluding one time items of 43 cents per share, beating the consensus estimate of 41 cents per share. Revenue increased 12.3 percent to $2.19 billion.
- Specialty chemical products company, RPM International Inc. (NYSE:RPM), reported fourth quarter net profit of $82.6 million, or 63 cents per share, on revenue of $981.8 million that beat analysts’ estimates a profit of 61 cents a share on revenue of $1.08 billion. The company, however, said that sales and profit growth in the current fiscal year is likely to witness a slowdown.
- Biotechnology company, InterMune, Inc. (NASDAQ:ITMN) posted lower than expected second quarter profit amid lackluster sales of its drug Esbriet, and forecast weak full-year revenue.
- Financial holding company, S & T Bancorp Inc (NASDAQ:STBA), reported second quarter earnings per share of 30 cents, missing consensus estimates of 37 cents per share.
- Oil and gas exploration and production company, Talisman Energy Inc. (USA) (NYSE:TLM) (TSE:TLM) has agreed to sell its U.K. unit to China Petroleum & Chemical Corp. (ADR) (NYSE:SNP) (HKG:0386) (SHA:600028), for $1.5 billion.
- Galectin Therapeutics Inc. (NASDAQ:GALT) soared in trade today after the company received US patent for its chronic liver disease treatment, GR-MD-02.
Hedge Fund News Update
- Hedge-fund manager John Paulson sees a 50 percent chance of the euro zone breaking-up. Paulson said that sovereign spreads are likely to widen as European policymakers’ strive hard to solve the region’s debt crisis.
- Scott Ferguson, the first analyst Bill Ackman hired for his Pershing Square fund in 2003, will leave by the end of July to start his own hedge fund. Currently a partner at Pershing Square, Ferguson plans to start a fund that will use an activist strategy similar to Ackman’s.
- Activist hedge fund JANA Partners LLC said that its flagship event-driven fund, the Master Fund was up 11.2 percent in the first half of the year, outperforming the S&P 500 (INDEXSP:.INX)’s 9.5 percent gain during the same period.
- Marc Lasry’s New York-based Avenue Capital reportedly raised $3 billion for a fund that plans to invest in the debt of European companies. Lasry has himself committed approximately $75 million to the new fund, according to a report in the New York Times.
- The Morningstar MSCI Composite Hedge Fund Index dropped 0.9 percent last month against a gain of around 5.1 percent in the MSCI World Stock Index during the same period.
- Hedge funds have managed to achieve positive returns over the long-term, despite market turmoil in 2011 and the ongoing European debt crisis, reports Eurekahedge.
Brokerage Upgrades and Downgrades on Monday, July 23, 2012
- Boyd Gaming Corporation (NYSE:BYD) was raised to “neutral” from “underperform” by analysts at Sterne Agee.
- Cablevision Systems Corporation (NYSE:CVC) was lifted to “buy” from “neutral” by analysts at Bank of America.
- Gardner Denver, Inc. (NYSE:GDI) was raised to “outperform” from “neutral” by analysts at Credit Suisse.
- KB Home (NYSE:KBH) was upgraded to “buy” from “neutral” by analysts at Goldman Sachs.
- M.D.C. Holdings, Inc. (NYSE:MDC) was lifted to “conviction” from “buy” by analysts at Goldman Sachs.
- Mosaic Co (NYSE:MOS) was raised to “buy” from “neutral” by analysts at Citigroup.
- Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) was upgraded to “buy” from “hold” by analysts at Jefferies Group.
- The Ryland Group, Inc. (NYSE:RYL) was lifted to “neutral” from “sell” by analysts at Goldman Sachs.
- Schlumberger Limited. (NYSE:SLB) was raised to “buy” from “hold” by analysts at Argus with a target price of $85.
- Valero Energy Corporation (NYSE:VLO) was upgraded to “buy” from “neutral” by analysts at UBS AG.
- Akorn, Inc. (NASDAQ:AKRX) was downgraded to “hold” from “buy” by analysts at Deutsche Bank.
- Costamare Inc (NYSE:CMRE) was cut to “market perform” from “outperform” by analysts at Wells Fargo & Co.
- CSR plc – ADS (NASDAQ:CSRE) was downgraded to “hold” from “buy” at Jefferies Group.