Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Thursday include: Advanced Micro Devices, Inc. (NYSE:AMD), Mellanox Technologies, Ltd. (NASDAQ:MLNX), Buffalo Wild Wings (NASDAQ:BWLD), Safeway Inc. (NYSE:SWY), The Gap Inc. (NYSE:GPS), Biogen Idec Inc. (NASDAQ:BIIB), CIT Group Inc. (NYSE:CIT), Flagstar Bancorp Inc (NYSE:FBC), Limited Brands, Inc. (NYSE:LTD), QR Energy LP (NYSE:QRE), Landec Corporation (NASDAQ:LNDC), Hormel Foods Corporation (NYSE:HRL), Family Dollar Stores, Inc. (NYSE:FDO), Goodrich Petroleum Corporation (NYSE:GDP), Lexmark International Inc (NYSE:LXK) and Ralcorp Holdings, Inc. (NYSE:RAH).
Market Levels
• US: Dow Futures: 13319.00 (-0.09%), S&P 500 Futures: 1456.30 (-0.05%), NASDAQ Futures: 2738.75 (0.00%)
• Europe: CAC: 3715.44 (-0.50%), DAX: 7759.26 (-0.25%), FTSE: 6034.40 (0.12%)
• Asia-Pacific: Australia: 4740.70 (0.74%), China: 2269.13 (0.00%), Hong Kong: 23398.60 (0.37%), India: 6009.50 (0.27%), Japan: 10395.18 (0.00%).
• Metals: Gold: 1680.50 (-0.49%), Silver: 30.94 (-0.22%), Copper: 3.72 (-0.32%)
• Energy: Crude Oil: 92.76 (-0.39%), Natural Gas: 3.22 (-0.25%)
• Commodities: Corn: 6.86 (-1.64%), Soya Bean: 13.80 (-1.22%), Wheat: 7.54 (-3.24%)
• Currency: EUR/USD: 1.3107 (-0.60%), GBP/USD: 1.6159 (-0.59%), USD/JPY: 86.9300 (-0.47%)
• 10 year US Treasury: 1.844% (0.006)
Market and Economic News Update
U.S. stock-index futures largely unchanged: U.S. stock-index futures are pointing to a flat open on Thursday as investors take a breather following the sharp 2-percent rally in the previous session. On the economic front, jobless claims increased by 10,000 to a seasonally adjusted 372,000, the Labor Department said today. Meanwhile, private sector created 215,000 new jobs in December, according to data from ADP, topping expectations for 133,000.
European markets mixed: European markets are mixed in trade today, with the German DAX (INDEXDB:DAX) down 0.3 percent to 7759.26 points, the FTSE 100 (INDEXFTSE:UKX) added 0.1 percent to6034.40 and the CAC 40 (INDEXEURO:PX1) shed 0.5 percent to 3715.44 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) fell 0.6 percent on Thursday.
Asian markets end higher: Asian markets closed higher on Thursday after data showed the Chinese services sectors expanded in December. The HANG SENG INDEX (INDEXHANGSENG:HIS) ended up 0.4 percent at 23,398.6, its highest close since June 1, 2011. The S&P/ASX 200 (INDEXASX:XJO) index rose 35 points to 4,740.7. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index finished 0.2 percent higher. The NIKKEI 225 (INDEXNIKKEI:NI225) and the SSE Composite Index (SHA:000001) (Shanghai Composite Index) were closed on Thursday for the New Year’s holiday.
Stocks to Watch
Advanced Micro Devices, Inc. (NYSE:AMD)
Chipmaker Advanced Micro Devices, Inc. (NYSE:AMD) has named Devinder Kumar as its new chief financial officer. Kumar has been Advanced Micro Devices, Inc. (NYSE:AMD)’s interim CFO since late September when Thomas Seifert resigned. Kumar is a 28-year veteran of the chip maker and has served as corporate controller since 2001. Shares of Advanced Micro Devices, Inc. (NYSE:AMD) moved higher in early trade.
Mellanox Technologies, Ltd. (NASDAQ:MLNX)
Communications equipment maker Mellanox Technologies, Ltd. (NASDAQ:MLNX) has lowered its fourth-quarter revenue outlook citing challenging macroeconomic conditions. Mellanox Technologies, Ltd. (NASDAQ:MLNX) now expects revenue of between $119 million and $121 million, down from a previous guidance of between $145 million and $150 million. Analysts expect the company to post sales of $148 million. Mellanox Technologies, Ltd. (NASDAQ:MLNX) plunged nearly 20 percent in pre-market trading.
Buffalo Wild Wings (NASDAQ:BWLD)
Billionaire hedge fund manager Steve Cohen’s SAC Capital Advisors disclosed a 5 percent stake in restaurant chain, Buffalo Wild Wings (NASDAQ:BWLD). According to a 13G filing, SAC Capital owns about 930,000 shares of Buffalo Wild Wings (NASDAQ:BWLD), up from 4,000 shares at the beginning of October. Shares of Buffalo Wild Wings (NASDAQ:BWLD) were inactive in early morning trade.
Safeway Inc. (NYSE:SWY)
Safeway Inc. (NYSE:SWY) said Chairman and Chief Executive Steve Burd will retire in May after 20 years at the supermarket operator. The board will begin a search for a successor, considering both internal and external candidates, Safeway Inc. (NYSE:SWY) said yesterday in a statement. Safeway Inc. (NYSE:SWY) has seen its sales and profit margin squeezed by rising food costs and weak consumer confidence, with revenue growth slowing to about 1.3 percent in 2012 from about 6.3 percent a year earlier. Shares of Safeway Inc. (NYSE:SWY) closed at $18.35 on Wednesday.
The Gap Inc. (NYSE:GPS)
The Gap Inc. (NYSE:GPS) will buy privately held women’s fashion boutique Intermix Inc for $130 million as part of a plan to enter the luxury clothes market, the Wall Street Journal reported late yesterday. Intermix has about 30 stores in the United States and Canada, with sales of around $130 million a year. The latest deal is The Gap Inc. (NYSE:GPS)’s first since it acquired women’s active apparel retailer Athleta in 2008. The Gap Inc. (NYSE:GPS) is up $1.46 or 5.20 percent in pre-market trading.
Biogen Idec Inc. (NASDAQ:BIIB)
Biogen Idec Inc. (NASDAQ:BIIB) shares slumped in pre-market trading after its experimental amyotrophic lateral sclerosis drug failed to meet its primary endpoint in a trial. Biogen Idec Inc. (NASDAQ:BIIB) said it will discontinue development of dexpramipexole after it did not show any efficacy in improving patients’ function or survival. Shares of Massachusetts-based Biogen Idec Inc. (NASDAQ:BIIB) have gained 36 percent in the 12 months through yesterday.
CIT Group Inc. (NYSE:CIT), Flagstar Bancorp Inc (NYSE:FBC)
CIT Group Inc. (NYSE:CIT) has agreed to pay around $779 million for most of Flagstar Bank’s Northeast-based commercial loans portfolio. Flagstar Bank is a unit of Flagstar Bancorp Inc (NYSE:FBC). CIT Group Inc. (NYSE:CIT) will acquire about $1.26 billion in commercial loan commitments, of which $785 million are outstanding, Flagstar Bancorp Inc (NYSE:FBC) said in a statement. Shares of CIT Group Inc. (NYSE:CIT) rose 40 cents to close at $39.04 on Wednesday. Flagstar Bancorp Inc (NYSE:FBC) stock rose 85 cents, or 4.4 percent, to close at $20.25.
Limited Brands, Inc. (NYSE:LTD)
Limited Brands, Inc. (NYSE:LTD) said December same-store sales rose 3 percent from a year earlier. Analysts were expecting a 4.5 percent growth in sales. Total sales for the five weeks ended December 29 increased to $1.95 billion from $1.87 billion. Shares of Limited Brands, Inc. (NYSE:LTD) plunged 4 percent in early morning trade.
QR Energy LP (NYSE:QRE)
QR Energy LP (NYSE:QRE) has acquired $145 million of oil properties in the Jay field in the Florida Gulf Coast region from Quantum Resources Funds. QR Energy LP (NYSE:QRE) is a limited partnership formed by affiliates of Quantum Resource Funds. The transaction closed on December 28, 2012 and was financed with cash on hand and borrowings under bank credit facility, QR Energy LP (NYSE:QRE) said in a statement. QR Energy LP (NYSE:QRE) shares were inactive in pre-market.
Landec Corporation (NASDAQ:LNDC)
Landec Corporation (NASDAQ:LNDC) said fiscal second-quarter earnings more than doubled to $8.9 million, or 34 cents a share, up from $3.3 million, or 13 cents a share, a year earlier. Revenue jumped 41 percent to $114.7 million. Analysts were expecting Landec Corporation (NASDAQ:LNDC) to post a per-share profit of 16 cents on revenue of $103 million. Landec Corporation (NASDAQ:LNDC) raked in more sales in its largest unit, the Apio food-products business, while sales at its Lifecore unit fell from a year earlier. Shares of Landec Corporation (NASDAQ:LNDC) soared 8 percent to $10.60.
Hormel Foods Corporation (NYSE:HRL)
Hormel Foods Corporation (NYSE:HRL) will pay $700 million to buy Skippy peanut butter from Unilever United States Inc., a unit of Unilever plc (LON:ULVR). The Skippy brand, launched in 1932, comprises 11 varieties of peanut-butter products, and is the leading brand in China, Hormel Foods Corporation (NYSE:HRL) said in a statement. The deal is expected to modestly add to Hormel Foods Corporation (NYSE:HRL)’s fiscal 2013 results.
Family Dollar Stores, Inc. (NYSE:FDO)
Family Dollar Stores, Inc. (NYSE:FDO) reported first quarter profit of $80.3 million, or 69 cents a share, compared with a profit of $80.4 percent, or 68 cents, a year earlier. Analysts had forecast a profit of 75 cents a share. Sales increased 12.7 percent to $2.42 billion, topping market expectations of a growth of 11 percent. Family Dollar Stores, Inc. (NYSE:FDO) expects second-quarter profit of between $1.18 and $1.28 a share, below analysts’ estimate of $1.39 a share.
Goodrich Petroleum Corporation (NYSE:GDP)
Goodrich Petroleum Corporation (NYSE:GDP) has cut its capital expenditure budget for 2013 as it tries to reduce natural gas production and allocate more to oil-directed activity in the Eagle Ford Shale or the Tuscaloosa Marine Shale. Goodrich Petroleum Corporation (NYSE:GDP) said it set its current year capital expenditure budget at $175 million to $200 million, compared with its estimated 2012 budget of around $250 million. Goodrich Petroleum Corporation (NYSE:GDP) expects oil volumes to grow by around 40 percent to 60 percent in 2013 from a year earlier, while natural gas volumes are likely to be down about 10 percent year over year.
Lexmark International Inc (NYSE:LXK)
Imaging products maker Lexmark International Inc (NYSE:LXK) has acquired Acuo Technologies in a deal worth about $45 million. Acuo Technologies provides software to hospitals and other health care providers. Acuo Technologies will be integrated into Lexmark International Inc (NYSE:LXK)’s Perceptive Software unit, the company said in a statement. Lexmark International Inc (NYSE:LXK) shares were inactive in early Thursday trading.
Ralcorp Holdings, Inc. (NYSE:RAH)
Billionaire fund manager Mario Gabelli has reported a 5.1 percent stake in food products company Ralcorp Holdings, Inc. (NYSE:RAH), according to an initial 13D filing. Shares of Ralcorp Holdings, Inc. (NYSE:RAH) jumped in pre-market trading. Last month, activist investor Keith Meister, who had pushed Ralcorp Holdings, Inc. (NYSE:RAH) toward its $6.8 billion deal with ConAgra Foods, Inc. (NYSE:CAG), unloaded nearly one-third of his shares in the company.
Economic Calendar for Thursday, January 03, 2013:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, December 28)
07:30 A.M. ET: Challenger Job Cuts (YoY) (December)
08:15 A.M. ET: ADP Employment Change (December)
08:30 A.M. ET: Initial Jobless Claims (Week ending Saturday, December 29, 2012)
08:30 A.M. ET: Continuing Jobless Claims (Week ending Saturday, December 23)
09:45 A.M. ET: Bloomberg Consumer Comfort Index (Week ending Sunday, Dec 29)
09:45 A.M. ET: ISM New York Index (December)
02:00 P.M. ET: FOMC Minutes
04:30 P.M. ET: Fed Balance Sheet
04:30 P.M. ET: Money Supply
