Every afternoon (and morning) we provide an update on global market levels, company news, economic news, and hedge fund news. Highlights for October 3rd 2012 below:
Post Market Update
ValueWalk's Raul Panganiban interviews JP Lee, Product Managers at VanEck, and discusses the video gaming industry. Q4 2020 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview With VanEck's JP Lee ValueWalk's ValueTalks ·
- US: Dow: 13494.60 (0.09%), S&P 500: 1450.99 (0.36%), NASDAQ: 3135.23 (0.49%)
- Europe: CAC: 3406.02 (-0.24%), DAX: 7322.08 (0.22%), FTSE: 5825.81 (0.28%).
- Asia-Pacific: Australia: 4438.60 (0.13%), China: 2086.17 (0.00%), Hong Kong: 20888.28 (0.23%), India: 5731.25 (0.22%), Japan: 8746.87 (-0.45%).
- Metals: Gold: 1779.80 (0.24%), Silver: 34.69 (0.0%), Copper: 3.78 (-0.45%)
- Energy: Crude Oil: 88.14 (-4.08%), Natural Gas: 3.40 (-3.85%)
- Commodities: Corn: 7.56 (-0.20%), Soya Bean: 15.31 (0.08%), Wheat: 8.73 (0.17%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2903 (0.09%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6079 (0.34%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.5050 (0.43%)
- 10 year US Treasury: 1.615% (-0.005)
Market and Economy News Update
U.S. markets end modestly higher: U.S. markets edged up in trade today as investors welcomed a batch of better-than-expected economic reports. The service sector expanded for the 33rd month in a row in September, according to the Institute for Supply Management’s non-manufacturing index. Private sector employment rose more than expected last month, according to data from payrolls processing firm ADP. The Dow Jones Industrial Average (INDEXDJX:.DJI) eked out a gain of 12.25 points, or 0.09 percent, to end at 13,494.61. The S&P 500 (INDEXSP:.INX) rose 5.24 points, or 0.36 percent, to close at 1,450.99, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) gained 15.19 points, or 0.49 percent, to finish at 3,135.23.
Oil prices tumble: Oil prices tanked more than 4 percent on Wednesday amid disappointing economic data from China and Europe, as investors chose to ignore a largely positive weekly report pointing to a surprise decline in U.S. crude inventories. Crude oil for November delivery plunged 4.1 percent, to settle at $88.14 a barrel on the New York Mercantile Exchange. Brent oil for November settlement lost 3.1 percent to $108.11 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Hewlett-Packard Company (NYSE:HPQ) tumbled 13 percent after Chief Executive Meg Whitman lowered projections for the next fiscal year and said the firm’s improvement will take longer than expected. The beleaguered tech powerhouse expects adjusted earnings for fiscal 2013 to range from $3.40 to $3.60 per share. Analysts had forecast full-year adjusted earnings of $4.17 per share.
- Hotel chain Marriott International, Inc. (NYSE:MAR) reported third quarter earnings of 44 cents a share on revenue of $2.73 billion that beat the average analysts’ estimate of 40 cents a share on sales of $2.65 billion. The company however provided a weaker than expected current-quarter earnings guidance.
- Walgreen Company (NYSE:WAG) ended 1.5 percent lower after September same-store sales fell 11 percent. Analysts were expecting sales to decline 7.3 percent at locations open for more than year.
- Homebuilders including Lennar Corporation (NYSE:LEN), PulteGroup, Inc. (NYSE:PHM) and D.R. Horton, Inc. (NYSE:DHI) closed significantly higher after a report showed home prices are coming off the bottom faster than expected. Home prices increased 4.6 percent in August from the year ago period, the largest year-on-year gain in six years, according to market researcher CoreLogic.
- Tech company Applied Materials, Inc. (NASDAQ:AMAT) said it will cut 6 to 9 percent of its global workforce, affecting 900 to 1,300 positions. The staff reduction is expected to save $140 million to $190 million a year.
- Nasdaq OMX Group, Inc. (NASDAQ:NDAQ) canceled dozens of trades in shares of Kraft Foods Group, Inc. (NASDAQ:KRFT) that occurred in early morning session on Wednesday after an unusual spike in the stock. Shares of Kraft Foods Group, Inc. (NASDAQ:KRFT) jumped nearly 29 percent in the first minute of trading on Wednesday
- Medical-device maker NuVasive, Inc. (NASDAQ:NUVA) slashed its third-quarter revenue guidance to $147 million, disappointing analysts who had expected the company to report sales of $154 million.
- US Airways Group, Inc. (NYSE:LCC) soared 8.3 percent after consolidated traffic rose 2 percent in September from a year earlier, while load factor, or the percentage of seats filled, gained 0.8 percent to 84.4 percent last month.
- Netflix, Inc. (NASDAQ:NFLX) closed 11 percent higher after Citigroup analyst Mark Mahaney reiterated a “buy” rating on the stock citing “a highly reasonable valuation.”
- After market close on Wednesday, Morgan Stanley initiated coverage of Cubist Pharmaceuticals Inc (NASDAQ:CBST), Neurocrine Biosciences, Inc. (NASDAQ:NBIX) and NPS Pharmaceuticals, Inc. (NASDAQ:NPSP) with an “overweight” rating.
- Loan servicing company Ocwen Financial Corporation (NYSE:OCN) agreed to buy Homeward Residential Holdings Inc. for about $750 million in cash and convertible preferred stock from private equity group WL Ross & Co.
- Data-analytics company CollabRx Inc (NASDAQ:CLRX) announced a multi-year partnership agreement with Life Technologies Corp. (NASDAQ:LIFE).
- Sarepta Therapeutics Inc (NASDAQ:SRPT) surged 200 percent after the company reported positive clinical data for its Duchenne Muscular Dystrophy treatment.
- Index provider MSCI Inc (NYSE:MSCI) is in advanced talks to acquire London-based IPD Group Ltd., according to media reports.
- Itron, Inc. (NASDAQ:ITRI) was awarded one of the country’s largest natural-gas metering contracts ever after Southern California Gas Company said it will install nearly 1.5 million Itron gas meters and more than 600,000 gas regulators.
- Reliance Steel & Aluminum (NYSE:RS) agreed to buy privately held Sunbelt Steel Texas LLC for an undisclosed amount.
- Luxfer Holdings Plc (NYSE:LXFR), a U.K.-based maker of gas cylinders jumped 10 percent in its Wall Street debut, while identity fraud protection company LifeLock, Inc. (NYSE:LOCK) closed lower in its trading debut on the NYSE.
- Phazar Corp. (NASDAQ:ANTP) jumped 20 percent after Garland Asher resigned as president and chief executive of the company. Robert Fitzgerald was named as his replacement.
- Rigel Pharmaceuticals Inc. (NASDAQ:RIGL) fell 8 percent after it revealed plans to offer an undisclosed number of shares, the proceeds from which will be used to fund research and development.
Hedge Fund News Update
- Hedge fund manager Daniel Loeb’s Third Point Offshore Fund increased 3.4 percent in September, helped by its position in distressed Greek government bonds, according to a September 30 dated monthly report he sent to his investors.
- London-based hedge fund Lansdowne Partners has launched a long-only fund, Developed Markets Long-Only Fund, which will invest only in the largest and most-liquid stocks, Financial News reported.
- Zurich-based Taussig Capital will create a platform to help hedge funds launch reinsurance arms.
Brokerage Upgrades and Downgrades on Wednesday, October 03, 2012
- American Axle & Manufact. Holdings, Inc. (NYSE:AXL) was raised to “outperform” from “sector perform” by analysts at RBC Capital Markets with a target price of $16.
- CSX Corporation (NYSE:CSX) was lifted to “market perform” from “underperform” by analysts at Bernstein.
- DineEquity Inc (NYSE:DIN) was upgraded to “buy” from “neutral” by analysts at Janney Capital with a target price of $68.
- Norfolk Southern Corp. (NYSE:NSC) was raised to “market perform” from “underperform” by analysts at Bernstein.
- Semtech Corporation (NASDAQ:SMTC) was lifted to “buy” from “neutral” by analysts at Lazard Capital with a target price of $31.
- Stratasys, Inc. (NASDAQ:SSYS) was upgraded to “buy” from “hold” by analysts at Craig Hallum with a target price of $70.
- Vodafone Group Plc (ADR) (NASDAQ:VOD) was raised to “outperform” from “neutral” by analysts at Macquarie.
- Amarin Corporation plc (ADR) (NASDAQ:AMRN) was cut to “neutral” from “outperform” by analysts at Wedbush.
- Ann Inc (NYSE:ANN) was lowered to “neutral” from “buy” by analysts at SunTrust.
- Cbeyond, Inc. (NASDAQ:CBEY) was downgraded to “underperform” from “neutral” by analysts at Bank of America.
- CNO Financial Group Inc (NYSE:CNO) was cut to “buy” from “conviction buy” by analysts at Goldman Sachs with a target price of $11.
- Discover Financial Services (NYSE:DFS) was downgraded to “hold” from “buy” by analysts at Argus.
- Heartland Payment Systems, Inc. (NYSE:HPY) was lowered to “sell” from “hold” by analysts at Stifel Nicolaus.
- Hill-Rom Holdings, Inc. (NYSE:HRC) was cut by analysts at Morgan Stanley from an “equal weight” rating to an “underweight” rating.
- Huntington Ingalls Industries Inc (NYSE:HII) was downgraded to “underweight” from “equal weight” by analysts at Morgan Stanley with a target price of $35.
- Leap Wireless International, Inc. (NASDAQ:LEAP) was lowered to “neutral” from “overweight” by analysts at JPMorgan Chase.
- Nationstar Mortgage Holdings Inc (NYSE:NSM) was cut by analysts at Sterne Agee from a “by” rating to a “neutral” rating.
- Potash Corp./ Saskatchewan (USA) (NYSE:POT) was downgraded to “neutral” from “buy” by analysts at Lazard Capital.
- Texas Instruments Incorporated (NASDAQ:TXN) was lowered to “sector perform” from “outperform” by analysts at Pacific Crest with a target price of $23.
- West Coast Bancorp (NASDAQ:WCBO) was cut by analysts at DA Davidson from a “buy” rating to a “neutral” rating.
- Waddell & Reed Financial, Inc. (NYSE:WDR) was downgraded to “hold” from “buy” by analysts at Stifel Nicolaus.