- US: Dow: 13343.50 (-1.52%), S&P 500: 1433.19 (-1.66%), NASDAQ: 3005.62 (-2.19%)
- Europe: CAC: 3524.83 (-0.29%), DAX: 7414.19 (-0.31%), FTSE: 5911.03 (-0.10%).
- Metals: Gold: 1721.90 (-1.31%), Silver: 32.09 (-2.37%), Copper: 3.63 (-2.95%)
- Energy: Crude Oil: 90.19 (-2.07%), Natural Gas: 3.58 (-0.17%)
- Commodities: Corn: 7.61 (0.10%), Soya Bean: 15.36 (-0.63%), Wheat: 8.72 (0.46%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.3024 (-0.32%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6005 (-0.24%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 79.3200 (0.05%)
- 10 year US Treasury: 1.763% (-0.071)
Market and Economy News Update
U.S. markets end lower: U.S. markets logged their worst one-day drop in almost four months on Friday following disappointing quarterly earnings reports that highlighted the global economic slowdown. The Dow Jones Industrial Average (INDEXDJX:.DJI) dropped 205 points, or 1.5 percent, to end at 13343.50. The S&P 500 (INDEXSP:.INX) lost 1.6 percent, while the NASDAQComposite (INDEXNASDAQ:.IXIC) tanked 2.2 percent. For the week, the Dow added 0.11 percent, the S&P 500 gained 0.32 percent, and the NASDAQ lost 1.26 percent.
Oil prices tumble: Crude prices declined on Friday amid investor optimism that the Keystone oil pipeline to the United States would restart on schedule. Brent crude prices fell for the fourth straight session on Friday. Crude oil for November delivery lost 2.1 percent, to settle at $90.19 a barrel on the New York Mercantile Exchange. Brent oil for December settlement slid 1.8 percent to $110.39 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- American International Group, Inc. (NYSE:AIG) Chief Executive Officer Robert Benmosche said the U.S. Treasury Department may sell the rest of its holdings in insurer before 2013, according to a report in Bloomberg News.
- Package-delivery company United Parcel Service, Inc. (NYSE:UPS) and its Dutch merger partner TNT Express NV (AMS:TNTE) said on Friday they would respond within a couple of weeks to European Commission’s objections to their 5.2 billion euro ($6.8 billion) deal.
- General Electric Company (NYSE:GE) chief financial officer Keith Sherin said the company is planning to close its pending acquisition of $7 billion in bank deposits from Metlife Inc (NYSE:MET) by the end of this year, according to a Reuters report.
- Goldman Sachs Group, Inc. (NYSE:GS) is planning to close mutual funds focused on stocks in Brazil and India, according to a filing with the Securities and Exchange Commission
- Starbucks Corporation (NASDAQ:SBUX) chief executive Howard Schultz has refuted allegations that the company shifted profits out of its British unit into tax havens and said he would be happy to co-operate with any official probe.
- Bank of America Corp (NYSE:BAC)‘s Merrill Lynch has named Keith Glenfield as the new head of its Alternative Investments Group.
- Supermarket operator The Kroger Co. (NYSE:KR) will stop selling fresh sprouts at its stores due to the potential safety risk, according to a report in The Wall Street Journal.
- Fast food chains, Burger King Worldwide Inc (NYSE:BKW), Jack in the Box Inc. (NASDAQ:JACK) and Sonic Corporation (NASDAQ:SONC) all ended significantly lower following McDonald’s Corporation (NYSE:MCD)’s weak third quarter earnings report.
- British bank Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) is cutting about 10 percent of the staff in its equities business team as part of an effort to reduce costs at its investment banking arm.
- Memphis-based bank holding company First Horizon National Corporation (NYSE:FHN) fell 3.6 percent after reporting a 29 percent decline in third quarter profit. Profit fell to $25.8 million, or 10 cents a share, from $36.1 million, or 14 cents a share, in the year-ago period. Revenue dipped 15 percent to $337 million. Analysts had projected profit of 19 cents a share on revenue of $340 million.
- European regulators have endorsed the use of Amyvid, an imaging test from Eli Lilly & Co. (NYSE:LLY) for helping to diagnose Alzheimer’s disease.
- Industrial-gas maker Air Products & Chemicals, Inc. (NYSE:APD) posted fourth quarter earnings excluding certain items of $1.42 a share, 2 cents below the average analysts’ estimate. Revenue increased 4 percent to $2.61 billion, topping estimates of $2.51 billion. The world’s largest hydrogen producer forecast full-year and current quarter earnings estimates that trailed most estimates.
- Oil and gas company Mcmoran Exploration Co (NYSE:MMR) reported third quarter adjusted loss of 15 cents a share, higher than a loss of 13 cents a share that analysts had expected. Revenue for the quarter stood at $91.8 million, topping estimates of $85.9 million.
- Danish drug maker Novo Nordisk A/S (ADR) (NYSE:NVO) (CPH:NOVO-B) said its long-acting insulin Tresiba has been recommended for approval by advisory panel to the European Medicines Agency. The treatment is under review in the U.S.
- Online financial services company E TRADE Financial Corporation (NASDAQ:ETFC) tumbled 9 percent after posting a surprise third-quarter loss of 10 cents a share late Thursday. Analysts had projected earnings of 8 cents a share. Revenue for the period fell 3 percent to $490 million, but beat Street estimates of $415.8 million.
- Fashion apparel company Guess?, Inc. (NYSE:GES) ended 6.2 percent lower after Morgan Stanley initiates coverage of the stock with an “underweight” rating, citing pressures in U.S. and Europe.
- Technology and engineering firm The Shaw Group Inc. (NYSE:SHAW) reported fourth quarter earnings excluding items of $1.86 per share, on revenue of $1.5 billion. Analysts had forecast earnings of $1.27 cents per share and $1.45 billion in revenue. The company forecast lower than expected full-year earnings and revenue.
- Regional bank United Financial Bancorp, Inc. (NASDAQ:UBNK) reported third quarter net income than fell from a year ago quarter and announced a new share repurchase program.
- Medical billing and records software maker athenahealth, Inc (NASDAQ:ATHN) fell 8.4 percent after it reported weaker than expected third quarter earnings. Net income grew 18 percent to $6.2 million, or 17 cents per share, from $5.3 million, or 15 cents per share, in the year-ago period. Excluding items, earnings came in at 30 cents per share, 4 cents below the average analysts’ estimate.
- Israel-based internet phone company magicJack VocalTec Ltd (NASDAQ:CALL) soared 13 percent after posting stronger-than-expected third quarter earnings and revenue.
Hedge Fund News Update
- New York-based hedge fund Och-Ziff Capital Management Group LLC (NYSE:OZM), which has a portfolio of about 300 foreclosed homes in northern California, is planning to exit the space, according to a Reuters report.
- Hedge fund forward redemptions stood at 3.19 percent in October, down slightly from 3.76 percent in September, according to the SS&C GlobeOp Forward Redemption Indicator.
- GoldenTree Asset Management LP, the $15.7 billion hedge fund specializing in corporate credit, could acquire an indirect 33 percent stake in Cerberus Capital Management’s Austrian banking unit BAWAG PSK, Reuters reported.
- Brevan Howard’s flagship fund, the Master Fund, is up 1.81 percent in October, following a 0.58 percent gain last month.
- SS&C Technologies Holdings has acquired Irving, Texas-based fund services provider Hedgemetrix LLC.
- Torbjorn Olofsson, who managed a fixed-income relative value fund at Swedish hedge fund Brummer & Partners, has decided to leave after 13 years at the firm.
Brokerage Upgrades and Downgrades on Friday, October 19, 2012
- Alliant Energy Corporation (NYSE:LNT) was upgraded to “buy” from “hold” by analysts at Wunderlich with a target price of $50.
- Abbott Laboratories (NYSE:ABT) was raised to “outperform” from “market perform” by analysts at Wells Fargo & Co.
- Associated Banc Corp (NASDAQ:ASBC) was lifted to “buy” from “hold” by analysts at Stifel Nicolaus with a target price of $14.50.
- AvalonBay Communities, Inc. (NYSE:AVB) was upgraded to “buy” from “hold” by analysts at Jefferies Group.
- BroadSoft Inc (NASDAQ:BSFT) was raised to “outperform” from “market perform” by analysts at Oppenheimer with a target price of $44.
- Core Laboratories N.V. (NYSE:CLB) was lifted to “overweight” from “neutral” by analysts at HSBC.
- Cheniere Energy Partners LP (NYSEAMEX:CQP) was upgraded to “outperform” from “neutral” by analysts at Credit Suisse.
- East West Bancorp, Inc. (NASDAQ:EWBC) was raised to “outperform” from “neutral” by analysts at Macquarie.
- Huntington Bancshares Incorporated (NASDAQ:HBAN) was lifted to “market perform” from “underperform” by analysts at FBR Capital with a target price of $7.50.
- Intuitive Surgical, Inc. (NASDAQ:ISRG) was upgraded to “buy” from “neutral” by analysts at Bank of America.
- T. Rowe Price Group, Inc. (NASDAQ:TROW) was raised to “overweight” from “neutral” by analysts at JPMorgan Chase.
- Textron Inc. (NYSE:TXT) was lifted to “overweight” from “neutral” by analysts at JPMorgan Chase.
- Verizon Communications Inc. (NYSE:VZ) was upgraded to “outperform” from “sector perform” by analysts at Pacific Crest.
- U.S. Bancorp (NYSE:USB) was raised to “positive” from “neutral” by analysts at Susquehanna.
- Western Refining, Inc. (NYSE:WNR) was lifted to “buy” from “neutral” by analysts at Goldman Sachs.
- Access Midstream Partners LP (NASDAQ:ACMP) was lowered to “neutral” from “outperform” by analysts at Credit Suisse.
- athenahealth, Inc (NASDAQ:ATHN) was cut to “underperform” from “hold” by analysts at Jefferies Group.
- Chipotle Mexican Grill, Inc. (NYSE:CMG) was downgraded to “neutral” from “outperform” by analysts at Wedbush with a target price of $270.
- E TRADE Financial Corporation (NASDAQ:ETFC) was lowered to “market perform” from “outperform” by analysts at Wells Fargo & Co.
- Fifth Third Bancorp (NASDAQ:FITB) was cut to “neutral” from “buy” by analysts at Compass Point with a target price of $16.
- Janus Capital Group Inc. (NYSE:JNS) was downgraded to “underweight” from “neutral” by analysts at JPMorgan Chase.
- KeyCorp (NYSE:KEY) was lowered by analysts at Citigroup from a “buy” rating to a “neutral” rating.
- Laboratory Corp. of America Holdings (NYSE:LH) was cut to “neutral” from “outperform” by analysts at Macquarie.
- Lloyds Banking Group PLC (ADR) (NYSE:LYG) was downgraded to “underweight” from “neutral” by analysts at JPMorgan Chase.
- Mid America Apartment Communities Inc (NYSE:MAA) was lowered by analysts at Jefferies Group from a “buy” rating to a “hold” rating.
- Meadowbrook Insurance Group, Inc. (NYSE:MIG) was cut to “underperform” from “sector perform” by analysts at RBC Capital Markets.
- Marvell Technology Group Ltd. (NASDAQ:MRVL) was downgraded to “neutral” from “overweight” by analysts at JPMorgan Chase.
- Northrop Grumman Corporation (NYSE:NOC) was lowered by analysts at Oppenheimer from an “outperform” rating to a “market perform” rating.
- Orient-Express Hotels Ltd. (NYSE:OEH) was cut to “neutral” from “overweight” by analysts at JPMorgan Chase.
- Snap-on Incorporated (NYSE:SNA) was downgraded to “neutral” from “buy” by analysts at Janney Montgomery Scott.
- Sonoco Products Company (NYSE:SON) was lowered by analysts at JPMorgan Chase from an “overweight” rating to a “neutral” rating.
- WESCO International, Inc. (NYSE:WCC) was cut to “neutral” from “buy” by analysts at Citigroup.
Earnings Calendar for Monday, October 22, 2012
Before Market Open:
· Peabody Energy Corporation (NYSE:BTU)
· Caterpillar Inc. (NYSE:CAT)
· Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)
· Hasbro, Inc. (NASDAQ:HAS)
· SunTrust Banks, Inc. (NYSE:STI)
· V.F. Corporation (NYSE:VFC)
After Market Close:
· Texas Instruments Incorporated (NASDAQ:TXN)
· Western Digital Corp. (NASDAQ:WDC)
· Yahoo! Inc. (NASDAQ:YHOO)
· Zions Bancorporation (NASDAQ:ZION)