Every afternoon (and morning) we provide an update on global market levels, company news, economic news, and hedge fund news. Highlights for October 16th 2012 below:

Market Levels

US:  Dow: 13551.80 (0.95%), S&P 500: 1454.92 (1.03%), NASDAQ: 3101.17 (1.21%)

Europe: CAC: 3500.95 (2.30%), DAX: 7376.27 (1.56%), FTSE: 5870.54 (1.11%).

Asia-Pacific: Australia: 4491.50 (0.18%), China: 2098.81 (0.01%), Hong Kong: 21207.07 (0.28%), India: 5648.00 (-0.69%), Japan: 8701.31 (1.42%).

Metals: Gold: 1749.00 (0.66%), Silver: 32.99 (0.75%), Copper: 3.71 (0.26%)

Energy: Crude Oil: 92.02 (0.19%), Natural Gas: 3.44 (-1.32%)

Commodities: Corn: 7.38 (0.14%), Soya Bean: 14.93 (0.08%), Wheat: 8.47 (-0.06%)

Currency: Euro (€) / US Dollar ($) (EURUSD): 1.3065 (0.09%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6120 (0.06%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.8700 (-0.03%)

10 year US Treasury: 1.719% (0.056)

Market and Economy News Update

U.S. markets end higher:  U.S. markets closed near the highs of the day on Tuesday as investors cheered a batch of better-than-expected earnings reports. The Dow Jones Industrial Average (INDEXDJX:.DJI) rallied 127.55 points, or 0.95 percent, to close at 13,551.78. The S&P 500 (INDEXSP:.INX) gained 14.79 points, or 1.03 percent, to end at 1,454.92, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) climbed rallied 36.99 points, or 1.21 percent, to finish at 3,101.17.

Oil prices gain: U.S. crude prices rose on Tuesday amid investor optimism that Spain may be one step closer to seeking a bailout. Crude oil for November delivery added 0.2 percent, to settle at $92.02 a barrel on the New York Mercantile Exchange. Brent oil for November settlement fell 0.7 percent to $113.61 a barrel on the London-based ICE Futures Europe exchange.

Stocks in Focus

  • International Business Machines Corp. (NYSE:IBM) reported third-quarter earnings excluding items of $3.62 per share, on revenue of $24.7 billion. Analysts had forecast earnings excluding items of $3.61 a share on $25.36 billion in revenue.
  • Intel Corporation (NASDAQ:INTC) said third-quarter profit dropped 14 percent to $2.97 billion, or 58 cents a share, from $3.47 billion, or 65 cents, a year earlier. Sales fell to $13.5 billion. Analysts had projected profit of 49 cents a share on sales of $13.2 billion. Revenue declined 5.5 percent to $13.5 billion. Analysts were expecting a profit of 49 cents a share on sales of $13.2 billion. The chipmaker forecast fourth quarter sales that were broadly in line with estimates.
  • Railroad company CSX Corporation (NYSE:CSX) said third quarter net income fell 2 percent to $455 million, or 44 cents per share, from $464 million, or 43 cents per share, in the year-ago period. Revenue fell 2 percent to $2.89 billion. Analysts had projected a profit of 43 cents per share on $2.93 billion in revenue.
  • Apollo Group Inc (NASDAQ:APOL) reported fourth quarter earnings of 52 cents a share, topping expectations for 49 cents a share. Revenue declined to $996.5 million from $1.12 billion, a year earlier.
  • Intuitive Surgical, Inc. (NASDAQ:ISRG) reported third quarter earnings of $4.46 a share, on sales of $538 million. Analysts expected the medical device maker to post a profit of $3.50 on revenue of $535 million.
  • Fortinet, Inc. (NASDAQ:FTNT) said third-quarter profit fell 4 percent to $17.2 million, or 10 cents per share, from $17.9 million, or 11 cents per share, in the same period last year.
  • Microsoft Corporation (NASDAQ:MSFT) set the starting price for its new Surface tablet at $499, versus $599 for a comparable version of Apple Inc. (NASDAQ:AAPL)’s new iPad.
  • Apple Inc. (NASDAQ:AAPL) rose 2.4 percent after the tech giant announced it will hold a media event on October 23, where it is widely expected to unveil a less expensive and smaller version of its popular iPad table.
  • Asset manager BlackRock, Inc. (NYSE:BLK) jumped 2.5 percent on lower than expected ETF fee cuts.
  • Homebuilders, Lennar Corporation (NYSE:LEN) and PulteGroup, Inc. (NYSE:PHM), closed higher after the National Association of Home Builders said homebuilder sentiment rose to a fresh six-year high in October.
  • W.W. Grainger, Inc. (NYSE:GWW) slid 2.9 percent after the maker of power tools and other industrial equipment reported lower-than-expected third-quarter sales and profit.
  • Forest Laboratories, Inc. (NYSE:FRX) closed 3.2 percent lower after the company reported a 91 percent drop in second quarter earnings as sales of its antidepressant Lexapro slumped due to rising competition from generics. The company also forecast full-year earnings below analysts’ estimates.
  • Clearwire Corporation (NASDAQ:CLWR) tumbled 17 percent following reports that Sprint Nextel Corporation (NYSE:S) has no immediate plans to take over Clearwire.
  • Coffin maker Hillenbrand, Inc. (NYSE:HI) has agreed to buy privately held German maker of material handling equipment, Coperion Capital GmbH for 408 million euros ($528 million).
  • News Corp (NASDAQ:NWSA) said that based on a preliminary count of votes, a majority of shareholders rejected a proposal to split the top two roles at the company and approved the re-election of directors.
  • Snack and candy giant Mondelez International Inc (NASDAQ:MDLZ) has issued a recall of its Green & Black’s Organic Peanut & Sea Salt Milk Chocolate bars over concerns that the product may be contaminated with salmonella.
  • ATM maker Diebold Incorporated (NYSE:DBD) fell 7.3 percent after it reported preliminary quarterly results below analysts’ expectations and cut its 2012 earnings and revenue guidance.
  • Supermarket operator The Kroger Co. (NYSE:KR) said its board has approved a $500 million stock-buyback program. The company also raised its long-term earnings forecast.
  • ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) plunged 22 percent amid concerns that its experimental cholesterol drug Kynamro might not get approval from a U.S. Food and Drug Administration panel on Thursday.
  • Wal-Mart Stores, Inc. (NYSE:WMT) has hired the current director of compliance at Schlumberger Limited. (NYSE:SLB), Daniel Trujillo as its head of international legal compliance, according to a report in The Wall Street Journal.
  • Electric car battery maker A123 Systems, Inc. (NASDAQ:AONE) that received a $249 million federal grant, filed for bankruptcy protection in a Delaware federal court and said it would sell its auto-business assets to Johnson Controls, Inc. (NYSE:JCI).

Hedge Fund News Update

  • New York-based hedge fund manager Deerfield Management Company, L.P. disclosed a 5.8 percent stake in Questcor Pharmaceuticals, Inc. (NASDAQ:QCOR), according to a Bloomberg report. The drug maker closed 7.4 percent higher at $24.90.
  • Josh Birnbaum’s Tilden Park Capital Management LP rose 6 percent in September, and is up 30 percent year-to-date.
  • New York-based hedge fund Mason Capital Management LLC said it will appeal decisions in favor of Telus Corporation (NYSE:TU) (TSE:T) issued on Monday by a Canadian court.
  • The investment management division of National Australia Bank Ltd. (ASX:NAB) has hired Toronto-based hedge funds-of-funds manager, Diversified Global Asset Management as a sub-advisor.
  • Former Credit Suisse trader, Jack DiMaio’s New York-based Mead Park Holdings is entering into a partnership with Puerto Rican bank Doral Financial to invest in junk-grade loans, Bloomberg reported.

Brokerage Upgrades and Downgrades on Tuesday, October 16, 2012

  • Alliance Data Systems Corporation (NYSE:ADS) was upgraded to “outperform” from “market perform” by analysts at Wells Fargo & Co.
  • AU Optronics Corp. (ADR) (NYSE:AUO) was raised to “buy” from “sell” by analysts at Credit Agricole.
  • Citigroup Inc. (NYSE:C) was lifted to “strong buy” from “outperform” by analysts at Raymond James.
  • Denbury Resources Inc. (NYSE:DNR) was upgraded to “positive” from “neutral” by analysts at Susquehanna.
  • Entropic Communications, Inc. (NASDAQ:ENTR) was raised to “buy” from “neutral” by analysts at DA Davidson with a target price of $7.
  • Helmerich & Payne, Inc. (NYSE:HP) was lifted to “outperform” from “sector perform” by analysts at RBC Capital Markets.
  • Lorillard Inc. (NYSE:LO) was upgraded
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