Post Market Update
Every afternoon (and morning) we provide an update on global market levels, company news, economic news, and hedge fund news. Highlights for August 22th 2012 below:
David Einhorn's Greenlight Capital returned -2.9% in the second quarter of 2021 compared to 8.5% for the S&P 500. According to a copy of the fund's letter, which ValueWalk has reviewed, longs contributed 5.2% in the quarter while short positions detracted 4.6%. Q2 2021 hedge fund letters, conferences and more Macro positions detracted 3.3% from Read More
- US: Dow: 13172.80 (-0.23%), S&P 500: 1413.49 (0.02%), NASDAQ: 3073.67 (0.21%)
- Europe: CAC: 3461.65 (-1.49%), DAX: 7017.75 (-1.02%), FTSE: 5774.20 (-1.44%).
- Asia-Pacific: Australia: 4376.00 (-0.17%), China: 2107.71 (-0.50%), Hong Kong: 19887.78 (-1.07%), India: 5412.85 (-0.15%), Japan: 9131.74 (-0.28%).
- Metals: Gold: 1640.50 (-0.15%), Silver: 29.56 (0.43%), Copper: 3.45 (0.04%)
- Energy: Crude Oil: 97.26 (0.43%), Natural Gas: 2.83 (1.84%)
- Commodities: Corn: 8.34 (-0.48%), Soya Bean: 17.27 (-0.27%), Wheat: 9.17 (-0.54%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2529 (-0.46%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5880 (-0.60%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.6050 (-0.85%)
- 10 year US Treasury: 1.692% (-0.107)
Market and Economy News Update
U.S. markets end little changed: U.S. markets rebounded off lows made earlier in the day to close largely unchanged on Wednesday after minutes from the latest FOMC meeting showed that the central bank is open to the idea of taking measures to stimulate the economy. On the economic front, existing home sales climbed 2.3 percent to an annual rate of 4.47 million units in July, according to the National Association of Realtors. The Dow Jones Industrial Average (INDEXDJX:.DJI) fell 30.82 points, or 0.23 percent, to end at 13,172.76, the third straight down day. The S&P 500 (INDEXSP:.INX) eked out a gain of 0.32 points, or 0.02 percent, to finish at 1,413.49, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) gained 6.41 points, or 0.21 percent, to close at 3,073.67.
Oil prices gain: Oil prices rose on Wednesday amid a larger than expected drop in U.S. crude inventories. Crude oil inventories fell 5.41 million barrels in the week ending August 17, according to the Energy Information Administration, much more than the drop of 400,000 barrels that analysts were expecting. Crude oil for September delivery jumped 0.4 percent, to settle at $97.26 a barrel on the New York Mercantile Exchange. Brent oil for October settlement added 0.4 percent to $115.04 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Facebook Inc (NASDAQ:FB)’s co-founder Dustin Moskovitz sold 450000 shares of the company over the past three days for about $9 million, according to a filing with the Securities and Exchange Commission.
- Hewlett-Packard Company (NYSE:HPQ) reported third quarter earnings excluding items of $1.00 per share, 2 cents above the average analysts’ estimate of 98 cents per share. Revenue declined 5 percent to $29.7 billion, missing estimates of $30.1 billion. Hewlett-Packard Company (NYSE:HPQ) cut the high end of its full-year profit forecast amid weak demand.
- Guess?, Inc. (NYSE:GES) reported a 45 percent drop in second-quarter profit to $42.9 million, or 49 cents per share, from $60.7 million, or 65 cents per share, a year earlier. Revenue fell 6.2 percent to $635.39 million. Analysts were expecting earnings of 50 cents per share, on $630 million in revenue. Guess?, Inc. (NYSE:GES) forecast current quarter earnings and revenue that missed estimates.
- Travel search website Kayak Software Corp (NASDAQ:KYAK) reported second quarter net income of $7.3 million, or 19 cents per share, up from $3.8 million, or 10 cents per share, in the year-ago quarter. Revenue increased 36 percent to $76.9 million. Analysts were looking for earnings of 24 cents a share, on revenue of $75.2 million.
- Doughnut-store chain Krispy Kreme Doughnuts (NYSE:KKD) posted second quarter earnings excluding one-time items of 12 cents a share, topping estimates of 5 cents a share. Revenue rose 4 percent to $102 million, slightly lower than Street expectations. The company provided better than expected full-year earnings outlook.
- Boston-based asset manager Eaton Vance Corp (NYSE:EV) said fiscal third-quarter profit fell 25 percent to $50.2 million, or 43 cents per share, from $68.1 million, or 55 cents per share, a year earlier. Revenue declined 8.6 percent to $298.8 million from $327.1 million. Analysts were expecting a profit of 47 cents per share on revenue of $304.1 million.
- Clothing retailer Pacific Sunwear of California, Inc. (NASDAQ:PSUN) posted second quarter adjusted loss of 8 cents per share, on revenue of $210.3 million that beat the average analysts’ estimate of a loss of 12 cents per share on $203.1 million in revenue.
- ConocoPhillips (NYSE:COP) sold its indirect 30 percent interest in a joint venture in Russia to partner Lukoil, for about $400 million.
- Discover Financial Services (NYSE:DFS) and eBay Inc (NASDAQ:EBAY) both moved higher after announcing a payment- processing deal with eBay Inc (NASDAQ:EBAY)’s PayPal unit. PayPal will issue payment cards to its more than 50 million users that will let them buy from 7 million merchant locations that already accept Discover starting in 2013.
- Beauty stores chain Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) named Bruce Hartman as its new Chief Financial Officer. Hartman will succeed Gregg Bodnar, who held the post since 2006.
- Chip-technology company Rambus Inc. (NASDAQ:RMBS) said it would cut 15 percent of its total workforce as part of a restructuring plan.
- Diversified financial services company DFC Global Corp (NASDAQ:DLLR) reported fourth-quarter net loss of $3.3 million or 8 cents per share, compared to a net income of $17.5 million or 39 cents per share in the year-ago quarter. Revenue grew to $266.7 million from $233.9 million, a year earlier. The company raised its full-year operating earnings outlook.
- James River Coal Company (NASDAQ:JRCC) closed 9 percent higher on news that a federal court directed the Environmental Protection Agency to take another look at its cross-state air pollution rule that clamps down on power plant pollution.
- Casino giant MGM Resorts International (NYSE:MGM) today unveiled plans to build an $800 million casino and resort complex in the economically depressed city of Springfield, Massachusetts.
- Medical equipment company Covidien plc (NYSE:COV) has recalled all of its DUET straight and articulating surgical staplers surgical tools, a device that reinforces tissues after stapling during surgery. The company also said it will stop producing the devices.
- Chinese security-software provider Qihoo 360 Technology Co Ltd (NYSE:QIHU) surged 16.5 percent after reporting better than expected second quarter earnings, and providing current quarter sales outlook that also beat analysts’ estimates.
- Mexican cement maker Cemex SAB de CV (ADR) (NYSE:CX) closed 3.8 percent higher after it said that it is close to a long-awaited refinancing deal. The world’s third-largest cement maker is also looking to sell a minority stake in its Latin American unit, according to a regulatory filing.
- For-profit education provider Career Education Corp. (NASDAQ:CECO) said Chief Financial Officer Michael Graham has resigned to join another company.
Hedge Fund News Update
- U.S. hedge funds accounted for 24 percent of the overall volume of fixed-income trading in the U.S. between April 2011 and April 2012, according to the results of Greenwich Associates 2012 North American Fixed-Income Study. Fixed-income trading volume jumped more than 30 percent during the period, from 18 percent in April 2011.
- The Texas Employees Retirement System has picked its first four hedge fund managers that include MKP Capital Management, Arrowgrass Capital Partners, Southpaw Asset Management and Claren Road Asset Management, and has handed out $80 million to each firm.
- Steve Mandel’s Lone Cypress hedge fund returned 20 percent through August 10, while Ricky Sandler’s New York-based Eminence Capital gained 16 percent through August 3, Bloomberg reported.
- UK-based activist hedge fund The Children’s Investment Fund Management, the largest non-promoter shareholder in Indian state-owned Coal India Limited (NSE:COALINDIA), has called for investigation by the country’s federal regulators into Coal India Limited (NSE:COALINDIA)‘s proposal to offer coal at lower than the market-driven prices.
- London-based carbon-trading firm CF Partners plans to roll out an energy hedge fund in the fourth quarter.
Brokerage Upgrades and Downgrades on Wednesday, August 22, 2012
- CenterPoint Energy, Inc. (NYSE:CNP) was raised to “outperform” from “market perform” by analysts at Wells Fargo & Co.
- China Telecom Corporation Limited (ADR) (NYSE:CHA) (HKG:0728) was lifted to “overweight” from “neutral” by analysts at JPMorgan Chase.
- Canadian Solar Inc. (NASDAQ:CSIQ) was upgraded to “neutral” from “sell” by analysts at Lazard Capital.
- Las Vegas Sands Corp. (NYSE:LVS) was raised to “outperform” from “in line” by analysts at Imperial Capital with a target price of $62.
- Agnico-Eagle Mines Limited (USA) (NYSE:AEM) was downgraded to “neutral” from “buy” by analysts at Global Hunter Securities.
- Best Buy Co., Inc. (NYSE:BBY) was lowered to “underperform” from “buy” by analysts at Wedbush with a target price of $14.50.
- Coca-Cola HBC S.A. (ADR) (NYSE:CCH) was cut to “underweight” from “neutral” by analysts at Citigroup.
- Equinix Inc (NASDAQ:EQIX) was downgraded to “equal weight” from “overweight” by analysts at Stephens with a target price of $215.
- Ferrellgas Partners, L.P. (NYSE:FGP) was lowered to “sell” from “neutral” by analysts at UBS AG.
- Republic Airways Holdings, Inc. (NASDAQ:RJET) was cut to “equal weight” from “overweight” by analysts at Evercore Partners.
- Trina Solar Limited (ADR) (NYSE:TSL) was downgraded to “hold” from “buy” by analysts at Lazard Capital.
- Tower Group Inc (NASDAQ:TWGP) was lowered to “underperform” from “neutral” by analysts at Zacks with a target price of $17.