Dov Gertzulin's DG Capital is having a strong year. According to a copy of the hedge fund's letter to investors of its DG Value Partners Class C strategy, the fund is up 36.4% of the year to the end of June, after a performance of 12.8% in the second quarter. The Class C strategy is Read More
- US: Dow: 12976.10 (-0.25%), S&P 500: 1375.32 (-0.29%), NASDAQ: 2920.21 (-0.66%)
- Europe: CAC: 3321.56 (0.90%), DAX: 6754.46 (-0.26%), FTSE: 5712.82 (1.36%).
- Asia-Pacific: Australia: 4262.80 (-0.15%), China: 2123.36 (0.93%), Hong Kong: 19820.38 (0.12%), India: 5240.50 (0.22%), Japan: 8641.85 (-0.62%).
- Metals: Gold: 1603.70 (-0.42%), Silver: 27.54 (-1.36%), Copper: 3.38 (-1.24%)
- Energy: Crude Oil: 88.91 (0.97%), Natural Gas: 3.17 (-1.18%)
- Commodities: Corn: 8.00 (-0.59%), Soya Bean: 16.29 (-0.73%), Wheat: 8.93 (-0.97%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2225 (0.60%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5534 (0.90%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.4450 (0.42%)
- 10 year US Treasury: 1.524% (0.056)
Market and Economy News Update
U.S. markets end lower: U.S. markets closed lower in a volatile session on Wednesday after the Federal Reserve left its current monetary policy unchanged, but pledged to provide additional support for the economy should conditions warrant. The Dow Jones Industrial Average (INDEXDJX:.DJI) fell 32.55 points, or 0.25 percent, to close at 12967.13. The S&P 500 (INDEXSP:.INX) lost 4 points, or 0.29 percent, to close at 1375.32, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) lost 19.31 points, or 0.66 percent, to close at 2920.21.
Oil prices rise: Oil prices gained after crude inventories fell the most in seven months. The U.S. Energy Information Administration said domestic crude oil inventories declined by 6.5 million barrel last week, the largest weekly drop since December last year. Crude oil for September delivery rose 1 percent, to settle at $88.91 a barrel on the New York Mercantile Exchange. Brent oil for September settlement increased 1 percent to $105.96 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- General Motors Company (NYSE:GM) said U.S. sales for July fell 6.4 percent from a year earlier to 201,237 vehicles. Ford Motor Company (NYSE:F) reported a 4 percent drop in sales last month, to 173,966 units. Japanese automakers, Honda, Toyota and Nissan reported stronger than expected July sales.
- Electronic trading firm Knight Capital Group, Inc. (NYSE:KCG) plunged to a seven-year low after its market-making unit suffered technology glitches that affected the routing of about 150 NYSE-listed shares.
- MetLife Inc (NYSE:MET), the largest U.S. life insurer, posted second quarter profit excluding items of $1.33 a share, beating estimates of $1.24 a share. Revenue for the quarter came in at $16.79 billion, missing estimates of $16.98 billion.
- Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) reported third quarter earnings excluding items of 52 cents a share, 2 cents above consensus estimates. The maker of Keurig brewers, however, provided full-year earnings guidance that was much below Street expectations.
- The Hartford Financial Services Grup Inc (NYSE:HIG), in which billionaire hedge-fund manager John Paulson is the largest investor, reported a second quarter loss of $101 million, or 26 cents per share, compared with a year-ago profit of $33 million or 5 cents per share.
- Customer reviews website Yelp Inc (NYSE:YELP) posted second quarter earnings and revenue that beat the average analysts’ estimate. The company also lifted its full-year guidance.
- Prudential Financial Inc (NYSE:PRU) said second quarter profit jumped 182 percent to $2.2 billion, or $4.64 a share, from $779 million, or $1.58 a share, a year ago. Revenue increased 13 percent to $11.41 billion from $10.1 billion in the same quarter last year.
- Unum Group (NYSE:UNM) reported second quarter earnings excluding one-time items of 79 cents per share, 3 cents above the average analysts’ estimate. Revenue for the quarter stood at $2.62 billion, slightly higher than Street expectations of $2.61 billion.
- Williams Companies, Inc. (NYSE:WMB) posted second quarter earnings excluding items of 22 cents a share, in line with the company’s earlier estimates.
- Phillips 66 (NYSE:PSX) reported second quarter earnings excluding items of $2.23 a share that beat the average analysts’ estimate by 55 cents. Refining profits jumped 53 percent to $1.18 billion, and the largest U.S. independent refiner announced a share buy-back program worth $1 billion.
- Marathon Oil Corporation (NYSE:MRO) reported second quarter earnings excluding items of 59 cents per share, in line with analysts’ estimates. Revenue declined 2 percent to $3.78 billion.
- American Tower Corp (NYSE:AMT) posted a 58 percent decline in second quarter profit to $48.2 million, or 12 cents a share, from $115.2 million, or 29 cents a share, a year earlier. Revenue increased 17 percent from the year-ago quarter, to $697.7 million.
- Hyatt Hotels Corporation (NYSE:H) reported second quarter adjusted earnings of 24 cents per share, one cent above the average analyst estimate. Revenue for the quarter increased 8 percent to $1 billion from $936 million a year earlier. Revenue per available room, a key industry measure, increased 8.7 percent for full-service hotels in North America.
- Forest Laboratories, Inc. (NYSE:FRX) ended 1.7 percent lower after an influential proxy advisory firm, Institutional Shareholder Services, advised shareholders to back two of Carl Icahn’s nominees to the company’s board. Icahn is the New York-based drug maker’s second-largest shareholder, and is waging a battle to elect four directors to the10-member board at its annual meeting on August 15.
Hedge Fund News Update
- Hedge fund manager Louis Bacon, the founder of Moore Capital Management, is planning to give back $2 billion, or 25 percent of his main hedge fund, to investors, after a tough second quarter when his fund was down 3.18 percent.
- Daniel Loeb’s flagship fund, Third Point Offshore hedge fund, declined 2.5 percent during the second quarter, amid continued uncertainty in Europe, and losses in Delphi Automotive PLC (NYSE:DLPH), Abercrombie & Fitch Co. (NYSE:ANF) and Ivanhoe Mines Ltd. (USA) (NYSE:IVN) (TSE:IVN) The fund however managed to outperform the broader stock market, which was down 2.8 percent during the same period.
- The London Borough of Camden Pension Fund is planning to nearly double its investments in hedge funds, to about 10 percent of its total assets. The London public pension fund, earlier this year, made a £50 million allocation to BlueCrest Capital Management.
- Amit Doshi, a former manager at New York-based Tiger Global Management, is planning to launch his own fund by the end of the year.
- Brevan Howard Asset Management and the Hong Kong-based asset management company of China International Capital Corp. have joined hands to launch a new a fund of hedge funds.
- UK-based hedge fund The Children’s Investment Fund has gone to court against state-owned miner Coal India Limited (NSE:COALINDIA), seeking to quash the Indian government’s decision to lower coal prices.
Brokerage Upgrades and Downgrades on Wednesday, August 01, 2012
- Aixtron SE (ADR) (NASDAQ:AIXG) was raised to “neutral” from “underweight” by analysts at HSBC.
- Arkansas Best Corporation (NASDAQ:ABFS) was lifted to “market perform” from “underperform” by analysts at Wells Fargo & Co.
- Celadon Group, Inc. (NYSE:CGI) was raised to “strong buy” from “outperform” by analysts at Raymond James.
- Cascade Microtech, Inc. (NASDAQ:CSCD) was upgraded to “buy” from “hold” by analysts at Canaccord Genuity.
- Jacobs Engineering Group Inc (NYSE:JEC) was raised to “overweight” from “equal weight” by analysts at Johnson Rice.
- Louisiana-Pacific Corporation (NYSE:LPX) was lifted to “market perform” from “underperform” by analysts at BMO Capital Markets.
- Meadowbrook Insurance Group, Inc. (NYSE:MIG) was lifted to “buy” from “hold” by analysts at BGB Securities with a target price of $10.
- Rubicon Technology, Inc. (NASDAQ:RBCN) was raised to “neutral” from “underperform” by analysts at RBC Capital.
- Tower Group Inc (NASDAQ:TWGP) was upgraded to “outperform” from “market perform” by analysts at FBR Capital with a target price of $24.
- Auxilium Pharmaceuticals, Inc. (NASDAQ:AUXL) was downgraded to “hold” from “buy” by analysts at Stifel Nicolaus.
- Allegiant Travel Company (NASDAQ:ALGT) was cut to “sell” from “hold” by analysts at Dahlman Rose.
- Becton, Dickinson and Co. (NYSE:BDX) was downgraded to “underweight” from “neutral” at JPMorgan Chase.
- BMC Software, Inc. (NASDAQ:BMC) was lowered to “neutral” from “outperform” by analysts at Credit Suisse.
- Digital River, Inc. (NASDAQ:DRIV) was cut to “market perform” from “outperform” by analysts at Raymond James.
- Metropolitan Health Networks, Inc. (NYSE:MDF) was downgraded to “buy” from “strong buy” by analysts at Feltl & Co. with a target price of $10.
- Polypore International, Inc. (NYSE:PPO) was downgraded by analysts at Robert W. Baird from “outperform” to “neutral” with a target price of $37.
- Symetra Financial Corporation (NYSE:SYA) was cut by analysts at Bank of America from “neutral” to “underperform.”
- Tech Data Corp (NASDAQ:TECD) was lowered to “underperform” from “neutral” by analysts at Bank of America.
- United Continental Holdings Inc (NYSE:UAL) was downgraded by analysts at Dahlman Rose from “buy” to “hold.”
Earnings Calendar for Thursday, August 02, 2012
Before market open:
Ameren Corp (NYSE:AEE)
Apache Corporation (NYSE:APA)
Beam Inc (NYSE:BEAM)
Cardinal Health, Inc. (NYSE:CAH)
Cigna Corporation (NYSE:CI)
The Clorox Company (NYSE:CLX)
Denbury Resources Inc. (NYSE:DNR)
Parker-Hannifin Corporation (NYSE:PH)
Pinnacle West Capital Corporation (NYSE:PNW)
Rowan Companies PLC (NYSE:RDC)
SCANA Corporation (NYSE:SCG)
Spectra Energy Corp. (NYSE:SE)
Sealed Air Corp (NYSE:SEE)
Scripps Networks Interactive, Inc. (NYSE:SNI)
Teradata Corporation (NYSE:TDC)
TECO Energy, Inc. (NYSE:TE)
Time Warner Cable Inc (NYSE:TWC)
WPX Energy Inc (NYSE:WPX)
Xcel Energy Inc (NYSE:XEL)
During market hours:
Duke Energy Corp (NYSE:DUK)
Kellogg Company (NYSE:K)
Xylem Inc (NYSE:XYL)
After market close:
American International Group, Inc. (NYSE:AIG)
Apartment Investment and Management Co. (NYSE:AIV)
CBS Corporation (NYSE:CBS)
Fluor Corporation (NEW) (NYSE:FLR)
Pitney Bowes Inc. (NYSE:PBI)
PerkinElmer, Inc. (NYSE:PKI)
Public Storage (NYSE:PSA)