Every afternoon (and morning) we provide an update on global market levels, company news, economic news, and hedge fund news. In Focus today; BRK.A, IPG, KCG, ZNGA, TU, KFT, EA, FB, ZIP among other stocks.
Post Market Update
Market Levels
- US: Dow: 13096.20 (1.69%), S&P 500: 1390.99 (1.90%), NASDAQ: 2967.90 (2.00%)
- Europe: CAC: 3374.19 (4.20%), DAX: 6865.66 (3.78%), FTSE: 5787.28 (2.16%).
- Asia-Pacific: Australia: 4221.50 (-1.12%), China: 2132.80 (1.01%), Hong Kong: 19666.18 (-0.12%), India: 5215.70 (-0.23%), Japan: 8555.11 (-1.15%).
- Metals: Gold: 1609.30 (1.17%), Silver: 27.80 (2.99%), Copper: 3.37 (2.34%)
- Energy: Crude Oil: 91.40 (4.90%), Natural Gas: 2.88 (-1.47%)
- Commodities: Corn: 8.07 (1.48%), Soya Bean: 16.28 (0.76%), Wheat: 9.03 (2.76%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2381 (-1.58%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5637 (-0.76%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.5950 (0.46%)
- 10 year US Treasury: 1.563% (0.085)
Market and Economy News Update
U.S. markets end higher: U.S. markets rallied to three month highs on Friday after a report showed non-farm payrolls climbed more than forecast in July. The Dow Jones Industrial Average (INDEXDJX:.DJI) jumped 217.29 points, or 1.69 percent, to close at 13096.17. The S&P 500 (INDEXSP:.INX) surged 25.99 points, or 1.90 percent, to end at 1390.99, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) gained 58.13 points, or 2 percent, to finish the week at 2967.90. The Dow added 0.17 percent for the week, S&P gained 0.36 percent and NASDAQ edged up 0.33 percent during the week.
Oil prices rally: Oil prices rose the most in a month after U.S. non-farm payrolls increased more than estimated and the Tropical Storm Ernesto, entered the Caribbean on Friday, and is headed towards the Gulf of Mexico. Crude oil for September delivery surged 4.9 percent, to settle at $91.40 a barrel on the New York Mercantile Exchange. Brent oil for September settlement jumped 2.9 percent to $108.94 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Berkshire Hathaway Inc. (NYSE:BRK.A) (BRK.A) reported second quarter earnings excluding items of $2,252 a share, beating the average analysts’ estimate of $1,777 a share. Article to follow shortly, check here for the latest.
- Videogame maker Electronic Arts Inc. (NASDAQ:EA) filed a lawsuit against Zynga Inc (NASDAQ:ZNGA), accusing the rival gaming company of copying and misappropriating key elements of the popular “The Sims” game
- Knight Capital Group Inc. (NYSE:KCG) ended 57 percent higher after The Wall Street Journal reported the battered trading firm has obtained a credit line from an unnamed party that will allow it to continue operations.
- Interpublic Group of Companies, Inc. (NYSE:IPG) soared 13 percent amid market speculation that France’s Publicis Groupe SA (EPA:PUB) may be considering a $6 billion bid for the advertising giant.
- Health insurer WellCare Health Plans, Inc. (NYSE:WCG) reported a better-than-expected second quarter profit due to higher premium revenue, but said medical expenses increased to 86 percent of revenue, against 81 percent last year. Wellcare also raised its full-year earnings forecast.
- Regional grocery distributor and retailer Spartan Stores, Inc. (NASDAQ:SPTN) ended 5.1 percent lower after reporting weak first-quarter results, and warning of lower same-store sales in the second quarter.
- Health Net, Inc. (NYSE:HNT) reported second quarter adjusted earnings were 6 cents a share that was far lower than the average analysts’ estimate of 66 cents a share. Revenue for the quarter increased 7 percent to $2.84 billion, slightly better than estimates of $2.8 billion. The health insurer also slashed its full-year earnings outlook by more than half.
- Industrial parts supplier ITT Corporation (NYSE:ITT) reported second quarter earnings excluding items of 50 cents per share that easily beat estimates of 37 cents per share. Revenue increased 3 percent to $567.5 million, but missed market expectations of $570 million.
- Touch-screen technology company Synaptics, Incorporated (NASDAQ:SYNA) posted fourth-quarter earnings excluding items of 54 cents per share, on revenue of $137.6 million. Analysts were expecting earnings excluding items of 51 cents per share on $136.2 million in revenue. The company, however, projected first-quarter revenue below analysts’ estimates.
- Zipcar Inc (NASDAQ:ZIP) said second-quarter loss narrowed, but revenue trailed estimates, as the car-sharing network provided a disappointing outlook for the third quarter and cut its forecast for sales this year.
- Rare-earth mineral producer Molycorp, Inc. (NYSE:MCP) ended 29 percent lower after it swung to a steep second-quarter loss and said it may reduce capital expenditures and secure additional financing.
- Blyth, Inc. (NYSE:BTH) surged 10 percent after reporting strong second-quarter sales amid better than expected performance at its ViSalus weight-loss and nutritional supplement business, and raising its full-year earnings forecast.
- Market-research firm ComScore, Inc. (NASDAQ:SCOR) plunged 21 percent after the company swung to a second quarter loss and cut its full-year revenue forecast amid greater anticipated foreign exchange impacts and weakness in its TV copy testing business.
Hedge Fund News Update
- Stephen Jen, one of the world’s best-known currency strategists, has welcomed Mario Draghi’s new revival plan for the euro zone’s debt crisis. The managing partner at London-based hedge fund SLJ Macro Partners said the ECB’s new set of guidelines that puts pressure on euro-zone governments should help protects the institutional integrity and the credibility of the central bank.
- Dan Loeb’s Third Point LLC, has acquired a major position in Kraft Foods Inc (NASDAQ:KFT). It was however unclear whether it is a net long position or a short position.
- New York-based hedge fund, Mason Capital Management LLC, the largest shareholder of the Vancouver-based Telus Corporation (NYSE:TU) (TSE:T), has called for a meeting of shareholders to counter a potential move by the wireless carrier to consolidate its two classes of stock on a one-for-one basis.
- Chris Boas, the former global head of credit at Chicago-based hedge fund, Citadel LLC‘s securities unit, is planning to start a hedge fund, Longwood Credit Partners LLP.
- Bill Ackman’s Pershing Square Capital Management managed to record gains of 1.5 percent in July for each of its two main funds, topping S&P 500 (INDEXSP:.INX)’s 1.26 percent rise during the same period. The fund is up 3.3% for the year.
- Astenbeck Capital Management, the $4.7 billion commodity fund gained 4 percent in July, its first positive month since February, according to a Reuters report.
Brokerage Upgrades and Downgrades on Friday, August 03, 2012
- CIGNA Corporation (NYSE:CI) was raised to “outperform” from “market perform” by analysts at BMO Capital Markets.
- Demandware Inc (NYSE:DWRE) was lifted to “buy” from “neutral” by analysts at Goldman Sachs.
- Hologic, Inc. (NASDAQ:HOLX) was raised to “strong buy” from “outperform” by analysts at Raymond James.
- Lakeland Bancorp, Inc. (NASDAQ:LBAI) was upgraded to “buy” from “hold” by analysts at Stifel Nicolaus with a target price of $10.50.
- Mercadolibre Inc (NASDAQ:MELI) was lifted to “overweight” from “neutral” by analysts at JPMorgan Chase.
- Mistras Group, Inc. (NYSE:MG) was raised to “outperform” from “neutral” by analysts at Robert W. Baird with a target price of $26.
- Ralcorp Holdings, Inc. (NYSE:RAH) was lifted to “buy” from “neutral” by analysts at UBS AG.
- SM Energy Co. (NYSE:SM) was raised to “buy” from “hold” by analysts at Societe Generale.
- Sunoco Logistics Partners L.P. (NYSE:SXL) was upgraded to “buy” from “neutral” by analysts at Bank of America.
- AtriCure Inc. (NASDAQ:ATRC) was downgraded to “neutral” from “overweight” by analysts at Piper Jaffray.
- Air Transport Services Group Inc. (NASDAQ:ATSG) was cut to “hold” from “buy” by analysts at Dahlman Rose.
- Ariba, Inc. (NASDAQ:ARBA) was downgraded to “equal weight” from “overweight” at Barclays Capital.
- Becton, Dickinson and Co. (NYSE:BDX) was lowered to “underperform” from “outperform” by analysts at Credit Agricole.
- Concur Technologies, Inc. (NASDAQ:CNQR) was cut to “sell” from “neutral” by analysts at Goldman Sachs.
- Nordstrom, Inc. (NYSE:JWN) was downgraded to “neutral” from “outperform” by analysts at Robert W. Baird with a target price of $59.
- Molycorp, Inc. (NYSE:MCP) was downgraded by analysts at JPMorgan Chase from “neutral” to “underweight.”
- RenaissanceRe Holdings Ltd. (NYSE:RNR) was cut by analysts at Citigroup from “buy” to “neutral.”
- Spectra Energy Corp. (NYSE:SE) was lowered to “hold” from “buy” by analysts at Deutsche Bank.
- The Fresh Market Inc (NASDAQ:TFM) was downgraded by analysts at JPMorgan Chase from “overweight” to “neutral.”
- World Fuel Services Corporation (NYSE:INT) was cut by analysts at Bank of America from “buy” to “underperform.”
