Every afternoon we provide an update on global market levels, company news, economic news, and hedge fund news.
- US: Dow: 13117.50 (0.16%), S&P 500: 1394.23 (0.23%), NASDAQ: 2989.91 (0.74%)
- Europe: CAC: 3401.56 (0.80%), DAX: 6918.72 (0.77%), FTSE: 5808.77 (0.37%).
- Asia-Pacific: Australia: 4272.60 (1.21%), China: 2154.92 (1.03%), Hong Kong: 19998.72 (1.66%), India: 5282.55 (1.28%), Japan: 8726.29 (1.96%).
- Metals: Gold: 1616.20 (0.43%), Silver: 27.86 (0.22%), Copper: 3.39 (0.64%)
- Energy: Crude Oil: 92.20 (0.88%), Natural Gas: 2.91 (1.08%)
- Commodities: Corn: 8.05 (-0.31%), Soya Bean: 15.84 (-2.73%), Wheat: 9.06 (0.28%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2403 (-0.10%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5605 (0.24%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.2450 (-0.27%)
- 10 year US Treasury: 1.566% (0.003)
Market and Economy News Update
U.S. markets end higher: U.S. markets rallied to three month highs on Monday, despite giving up gains made earlier in the day, amid lower borrowing costs in Spain and Italy, and investor optimism that the European Central Bank will step in to ease the debt crisis. The Dow Jones Industrial Average (INDEXDJX:.DJI) rose 21.34 points, or 0.16 percent, to close at 13,117.51. The S&P 500 (INDEXSP:.INX) climbed 3.24 points, or 0.23 percent, to end at 1,394.23, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) gained 22.01 points, or 0.74 percent, to finish at 2,989.91.
Oil prices rally: Oil prices rose for the second consecutive day after the German government approved the European Central Bank’s bond-buying plan, adding to investor optimism that the euro zone debt crisis will ease. An explosion on the Iraq-Turkey pipeline also raised concerns about the situation in the region. Crude oil for September delivery gained 0.9 percent, to settle at $92.20 a barrel on the New York Mercantile Exchange. Brent oil for September settlement rose 0.6 percent to $109.55 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Chesapeake Energy Corporation (NYSE:CHK) reported second-quarter earnings excluding items of 6 cents per share, on revenue of $3.4 billion. Analysts were expecting earnings excluding items of 7 cents a share on $2.44 billion in revenue.
- Leap Wireless International, Inc. (NASDAQ:LEAP) posted second quarter loss of 54 cents a share that was wider than estimates of a 50-cent loss. Revenue for the quarter came in at $760.5 million, also trailing estimates of $836.8 million. The telecommunications company also slashed its full-year capital expenditure guidance.
- Resort operator Caesars Entertainment Corp (NASDAQ:CZR) reported second quarter loss of $1.93 a share on revenue of $2.17 billion that trailed the average analysts’ estimate for a loss of 94 cents on $2.28 billion in revenue.
- Internet communication services provider BroadSoft Inc (NASDAQ:BSFT) reported better than expected second quarter earnings and revenue, and agreed to acquire Adaption Technologies for an undisclosed amount.
- CF Industrial Holdings, Inc. (NYSE:CF) reported a 24 percent jump in second quarter profit to $606.3 million, or $9.31 per share, from $487.4 million, or $6.75 per share, in the year-ago period. Revenue declined 4 percent to $1.74 billion.
- Tesco Corporation (USA) (NASDAQ:TESO) slumped 15 percent in New York trading after the oil and gas drilling equipment company reported weaker-than-expected second-quarter revenue.
- Hospital operator HCA Holdings Inc (NYSE:HCA) said the U.S. Department of Justice is looking into billing practices and heart procedures performed at some of its hospitals.
- Israeli drugmaker Pluristem Therapeutics Inc. (NASDAQ:PSTI) ended 15 percent higher after a cancer patient’s life was saved using its placenta-based stem cell treatment.
- FreightCar America, Inc. (NASDAQ:RAIL) reported second-quarter net profit of $5.6 million, or 46 cents per share, compared with a profit of $184,000, or 2 cents per share, a year earlier. Revenue soared 85 percent to $181.2 million. Analysts were expecting earnings of 57 cents per share on $189.3 million of revenue. New orders for the quarter declined 12 percent to 961 units.
- Zimmer Holdings, Inc. (NYSE:ZMH) and the Tokyo-based Seikagaku Corporation (TYO:4548) won a U.S. patent-infringement trial brought by Genzyme Corp., a subsidiary of French drug maker Sanofi SA (NYSE:SNY), over a treatment for arthritic pain in the knee.
- Sunshine Heart Inc (NASDAQ:SSH) has received conditional approval from the U.S. Food and Drug Administration for its next-generation C-Pulse System Driver, a device designed to provide enhanced comfort and performance to patients with moderate to severe heart-failure.
Hedge Fund News Update
- Hedge fund managers raised their net-long positions across commodities for the eighth straight week, the longest streak on record, U.S. Commodity Futures Trading Commission data showed.
- Anthony Ward’s London-based Armajaro Asset Management will launch the Armajaro Global Financials Fund in October, which will trade stocks of banks, insurance companies, asset managers and other financial institutions, and will start with assets under management of up to $100 million (64.2 million pounds).
- Kingdon Capital Management LLC’s equity-long/short-strategy fund, which invests in stocks around the world, fell 0.71 percent in July, compared with a 1.29 percent rise in the MSCI World Index.
- David Einhorn’s Greenlight Capital rose 2.7 percent in July, buoyed by the continued bet against Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), which slumped 16.6 percent on the month.
- Baring Asset Management, a part of the MassMutual Financial Group, will acquire Seoul-based asset manager, SEI Asset Korea.
- New York-based JAT Capital Management, the $1.9 billion hedge fund, gained 4.7 percent in July, which saw year-to-date loss decrease to 17 percent from 20 percent.
Brokerage Upgrades and Downgrades on Monday, August 06, 2012
- American Water Works Co., Inc. (NYSE:AWK) was raised to “outperform” from “neutral” by analysts at Robert W. Baird with a target price of $41.
- Arris Group, Inc. (NASDAQ:ARRS) was lifted to “buy” from “hold” by analysts at Jefferies Group with a target price of $16.
- Beazer Homes USA, Inc. (NYSE:BZH) was raised to “neutral” from “underperform” by analysts at Credit Suisse with a target price of $2.50.
- CSR plc- ADS (NASDAQ:CSRE) was upgraded to “neutral” from “sell” by analysts at Citigroup.
- Kodiak Oil & Gas Corp (USA) (NYSE:KOG) was lifted to “accumulate” from “neutral” by analysts at Global Hunter Securities with a target price of $13.
- North Valley Bancorp (NASDAQ:NOVB) was raised to “outperform” from “market perform” by analysts at Raymond James with a target price of $15.
- Regions Financial Corporation (NYSE:RF) was lifted to “buy” from “neutral” by analysts at Bank of America.
- Sappi Limited (ADR) (NYSE:SPP) was raised to “buy” from “neutral” by analysts at Citigroup.
- WellCare Health Plans, Inc. (NYSE:WCG) was upgraded to “outperform” from “neutral” by analysts at Wedbush with a target price of $72.
- Brookfield Office Properties Inc (USA) (NYSE:BPO) was downgraded to “neutral” from “buy” by analysts at Citigroup.
- Best Buy Co., Inc. (NYSE:BBY) was lowered to “hold” from “buy” by analysts at Stifel Nicolaus.
- Chesapeake Energy Corporation (NYSE:CHK) was cut to “market perform” from “outperform” by analysts at BMO Capital Markets with a target price of $25.
- Edwards Lifesciences Corp (NYSE:EW) was downgraded to “outperform” from “top pick” at RBC Capital with a target price of $105.
- Martin Midstream Partners L.P. (NASDAQ:MMLP) was lowered to “market perform” from “outperform” by analysts at Wells Fargo & Co.
- Newmont Mining Corp (NYSE:NEM) was cut to “underperform” from “neutral” by analysts at Zacks with