Market Levels
* US: Dow: 13482.40 (-0.24%), S&P 500: 1445.75 (0.09%), NASDAQ: 3120.04 (0.21%)
* Europe: CAC: 3414.23 (-0.61%), DAX: 7305.86 (-0.29%), FTSE: 5809.45 (-0.19%).
* Metals: Gold: 1775.60 (-0.43%), Silver: 34.67 (-0.81%), Copper: 3.80 (0.41%)
* Energy: Crude Oil: 91.89 (-0.64%), Natural Gas: 3.53 (1.47%)
* Commodities: Corn: 7.58 (0.20%), Soya Bean: 15.30 (-1.91%), Wheat: 8.71 (-1.44%)
* Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2920 (-0.25%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6133 (0.01%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.1550 (0.21%)
* 10 year US Treasury: 1.620% (-0.005)
Market and Economy News Update
U.S. markets end mixed: U.S. markets closed mixed in a volatile session on Tuesday amid uncertainty over the timing of Spain’s bailout request. Investors have been awaiting a formal bailout request from Spain, and many are hopeful that the wait might end soon. Earlier on Monday, Moody’s said that Spain’s banks may face a greater capital shortfall than the government estimated last week. The Dow Jones Industrial Average (INDEXDJX:.DJI) slid 32.75 points, or 0.24 percent, to close at 13,482.36. The S&P 500 (INDEXSP:.INX) eked out a gain of 1.26 points, or 0.09 percent, to finish at 1,445.75, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) rose for the first time in three days, up 6.51 points, or 0.21 percent, at 3,120.04.
Oil prices fall: Oil prices declined in a choppy session on Tuesday amid investor concerns about global economic growth and its impact on demand for oil. Crude oil for November delivery lost 0.6 percent, to settle at $91.89 a barrel on the New York Mercantile Exchange. Brent oil for November settlement slid 0.8 percent to $111.28 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
* General Motors Company (NYSE:GM) reported a 1.5 percent increase in September auto sales, while Ford Motor Company (NYSE:F) posted sales that were in line with results from a year earlier. Toyota Motor Corporation (ADR) (NYSE:TM)’s sales jumped more than 40 percent, easily topping analysts’ expectations.
* The New York State Attorney General’s office filed a civil fraud lawsuit against JPMorgan Chase & Co. (NYSE:JPM) alleging widespread fraud in the sale of mortgage-backed securities.
* The Boeing Company (NYSE:BA) ended 0.7 percent lower after union members rejected a contract offer for labor agreements late Monday
* Xyratex Ltd. (NASDAQ:XRTX) reported third quarter earnings excluding one-time items of 37 cents a share, on revenue of $276 million that missed expectations for 44 cents a share on sales of $316 million. The Storage-systems company provided fourth-quarter guidance that disappointed.
* Specialty pet retailer PetSmart, Inc. (NASDAQ:PETM) gained 1.5 percent after S&P announced that the company will replace Sunoco, Inc. (NYSE:SUN) in the S&P 500 (INDEXSP:.INX) index after the close on October 4.
* Lighting solutions provider Acuity Brands, Inc. (NYSE:AYI) slumped 5 percent following weaker-than-expected fourth quarter financial results. Earnings excluding items for the period came in at 88 cents per share that trailed estimates of 92 cents per share. Sales rose 4 percent to $514.3 million, also missing expectations for $522.1 million.
* Deutsche Bank initiated coverage of Brookdale Senior Living, Inc. (NYSE:BKD), Capital Senior Living Corporation (NYSE:CSU), Emeritus Corporation (NSE:ESC), and Five Star Quality Care, Inc. (NYSE:FVE) with a “buy” rating.
* Fertilizer producer Mosaic Co (NYSE:MOS) fell 4 percent after posting a lower-than-expected quarterly profit. The company reported first quarter net income of $429.4 million, or $1.01 per share, compared with $526 million, or $1.17 a share, in the year-ago period. Analysts had forecast earnings of $1.15 per share.
* Apparel chain Express, Inc. (NYSE:EXPR) tanked 22 percent after third quarter earnings forecast came in below Street expectations. The company expects to earn between 16 cents to 20 cents per share for the third quarter that trailed the average analysts’ estimate of 29 cents per share.
* PVH Corp (NYSE:PVH) raised its full-year profit forecast, citing strength in its Tommy Hilfiger and Calvin Klein businesses. It now expects full-year adjusted earnings of $6.32 to $6.37 per share, up from $6.25 to $6.32 per share. Analysts are expecting full-year earnings of $6.30 per share.
* Real estate website Zillow Inc (NASDAQ:Z) sank 4.2 percent after the U.S. Securities and Exchange Commission asked for added disclosures on some of its financial reporting.
* MetroPCS Communications Inc (NYSE:PCS) surged 18 percent on reports that the pre-paid wireless carrier is close to a merger deal with Deutsche Telekom AG (ETR:DTE) (FRA:DTE)’s US subsidiary T-Mobile.
* Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) rose 2.9 percent despite hedge fund manager David Einhorn recommending short-selling the stock.
* Illumina, Inc. (NASDAQ:ILMN) ended 4 percent higher amid a London Times report that Roche is preparing a $60 per share bid for the company.
* Teen clothing retailer Zumiez Inc. (NASDAQ:ZUMZ) reported a 5.6 percent rise in September same-store sales that beat the average analysts’ estimate of a gain of 3.2 percent.
* Cell Therapeutics Inc (NASDAQ:CTIC) rallied 13 percent after it said the U.S. Food and Drug Administration granted orphan-drug designation to its brain cancer drug Opaxio.
* ArQule, Inc. (NASDAQ:ARQL) plunged 56 percent after it said it would discontinue a Phase III clinical trial of the lung cancer drug it is co-developing with Japan’s Daiichi Sankyo Company, Limited (TYO:4568) after an independent committee concluded that the drug would not improve overall survival.
* French pharmaceutical maker Sanofi SA (ADR) (NYSE:SNY) would buy Colombia’s second largest generic drug maker Genfar for an undisclosed amount.
Hedge Fund News Update
* Dan Loeb’s Third Point LLC disclosed a 1.5 million stake in energy company, Murphy Oil Corporation (NYSE:MUR) through the end of the second quarter, according to a regulatory filing.
* Hedge fund manager David Einhorn, speaking at the Value Investor Congress, said that once-ailing carmaker General Motors Company (NYSE:GM) could beat growth forecasts. He was, however, less upbeat about restaurant chain, Chipotle Mexican Grill, Inc. (NYSE:CMG), which he thinks is overvalued at current levels, and hence an attractive “short.”
* Activist investor Bill Ackman said the board of troubled The Procter & Gamble Company (NYSE:PG) would likely give its chief executive Bob McDonald “a little bit more time” to fix its problems, Reuters reported.
* Hedge funds, in aggregate, are up 3.04 percent year-to-date as of September, 2012, compared to a 13.97 percent gain in the S&P 500 (INDEXSP:.INX), according to a Bank of America Merrill Lynch report.
* Hedge-fund manager Och-Ziff Capital Management Group LLC (NYSE:OZM) said its four main funds rose between 1 percent and 1.7 percent in September, trailing the S&P 500 (INDEXSP:.INX)’s 2.7 percent rise for the month.
* Swedish hedge fund Wiborg Kapitalforvaltning will close its 10-year-old Consepio fund amid tough market conditions.
Brokerage Upgrades and Downgrades on Tuesday, October 02, 2012
* Credicorp Ltd. (USA) (NYSE:BAP) was raised to “buy” from “underperform” by analysts at Bank of America.
* Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) was lifted to “strong buy” from “market perform” by analysts at Raymond James with a target price of $26.
* Diamond Offshore Drilling, Inc. (NYSE:DO) was upgraded to “neutral” from “underweight” by analysts at JPMorgan Chase.
* Devon Energy Corporation (NYSE:DVN) was raised to “outperform” from “market perform” by analysts at FBR Capital with a target price of $80.
* Kinross Gold Corporation (USA) (NYSE:KGC) was lifted to “outperform” from “sector perform” by analysts at RBC Capital Markets with a target price of $14.
* Lennar Corporation (NYSE:LEN) was upgraded to “neutral” from “sell” by analysts at Citigroup with a target price of $35.
* Liberty Media Corp (Capital) (NASDAQ:LMCA) was raised to “buy” from “neutral” by analysts at Citigroup with a target price of $121.
* Methanex Corporation (USA) (NASDAQ:MEOH) was lifted to “outperform” from “market perform” by analysts at Raymond James with a target price of $34.
* PNC Financial Services (NYSE:PNC) was upgraded to “buy” from “hold” by analysts at Deutsche Bank with a target price of $71.
* Synaptics, Incorporated (NASDAQ:SYNA) was raised to “hold” from “sell” by analysts at Feltl & Co. with a target price of $21.
* XL Group plc (NYSE:XL) was lifted to “neutral” from “sell” by analysts at Goldman Sachs with a target price of $24.
* Zoltek Companies, Inc. (NASDAQ:ZOLT) was upgraded to “buy” from “hold” by analysts at Needham & Company with a target price of $10.
* Agrium Inc. (USA) (NYSE:AGU) was cut to “hold” from “buy” by analysts at TD Securities with a target price of $115.
* BB&T Corporation (NYSE:BBT) was lowered to “hold” from “buy” by analysts at Deutsche Bank.
* Baker Hughes Incorporated (NYSE:BHI) was downgraded to “accumulate” from “buy” by analysts at Tudor Pickering.
* Brooks Automation, Inc. (USA) (NASDAQ:BRKS) was cut to “underweight” from “equal weight” by analysts at Barclays Capital.
* Consolidated Edison, Inc. (NYSE:ED) was downgraded to “underperform” from “neutral” by analysts at Credit Suisse.
* Fifth Third Bancorp (NASDAQ:FITB) was lowered to “market perform” from “outperform” by analysts at Wells Fargo & Co.
* Informatica Corporation (NASDAQ:INFA) was cut by analysts at Credit Suisse from a “neutral” rating to an “underperform” rating.
* KB Home (NYSE:KBH) was downgraded to “sell” from “neutral” by analysts at Citigroup with a target price of $12.
* MKS Instruments, Inc. (NASDAQ:MKSI) was lowered to “underweight” from “overweight” by analysts at Barclays Capital.
* Parkway Properties Inc (NYSE:PKY) was cut by analysts at Benchmark Co. from a “buy” rating to a “hold” rating with a target price of $14.
* RenaissanceRe Holdings Ltd. (NYSE:RNR) was downgraded to “neutral” from “buy” by analysts at Goldman Sachs.
* The Southern Company (NYSE:SO) was lowered to “underperform” from “neutral” by analysts at Credit Suisse with a target price of $49.
* Safeway Inc. (NYSE:SWY) was cut by analysts at Credit Suisse from an “underperform” rating to a “neutral” rating with a target price of $15.
* The Travelers Companies, Inc. (NYSE:TRV) was downgraded to “buy” from “conviction buy” by analysts at Goldman Sachs with a target price of $75.
* Wells Fargo & Company (NYSE:WFC) was lowered to “hold” from “buy” by analysts at Deutsche Bank.
* Winnebago Industries, Inc. (NYSE:WGO) was cut by analysts at Robert W. Baird from an “outperform” rating to a “neutral” rating with a target price of $13.
* W.R. Berkley Corporation (NYSE:WRB) was downgraded to “sell” from “neutral” by analysts at Goldman Sachs.
