Post Market Update
Michael Mauboussin: Here’s what active managers can do
The debate over active versus passive management continues as trends show the ongoing shift from active into passive funds. Q2 2020 hedge fund letters, conferences and more At the Morningstar Investment Conference, Michael Mauboussin of Counterpoint Global argued that the rise of index funds has made it more difficult to be an active manager. Drawing Read More
• US: Dow: 12796.00 (1.65%), S&P 500: 1386.86 (1.98%), NASDAQ: 2916.07 (2.21%)
• Europe: CAC: 3439.58 (2.85%), DAX: 7123.84 (2.43%), FTSE: 5737.66 (2.30%).
• Asia-Pacific: Australia: 4361.40 (0.57%), China: 2016.98 (0.11%), Hong Kong: 21262.06 (0.48%), India: 5571.40 (-0.05%), Japan: 9153.20 (1.41%).
• Metals: Gold: 1734.40 (1.15%), Silver: 33.19 (2.53%), Copper: 3.53 (2.20%)
• Energy: Crude Oil: 89.28 (2.72%), Natural Gas: 3.72 (-1.87%)
• Commodities: Corn: 7.42 (1.57%), Soya Bean: 13.94 (0.83%), Wheat: 8.57 (0.47%)
• Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2811 (-0.58%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5906 (-0.13%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 81.4050 (0.07%)
• 10 year US Treasury: 1.608% (0.028)
Market and Economy News Update
U.S. markets rally: U.S. markets posted their best one-day rally since September following a couple of better-than-expected housing reports, and as investors grew more hopeful that a U.S. budget crisis will be averted. The Dow Jones Industrial Average (INDEXDJX:.DJI) rallied 207.65 points, or 1.65 percent, to close at 12,795.96. The S&P 500 (INDEXSP:.INX) soared 27.01 points, or 1.99 percent, to finish at 1,386.89. The NASDAQComposite (INDEXNASDAQ:.IXIC) jumped 62.94 points, or 2.21 percent, to end at 2,916.07.
Oil prices jump: Oil prices gained on Monday amid concerns that the escalating conflict between Israel and Palestinians could result in supply disruption in the region. Crude oil for December delivery added 2.7 percent, to settle at $89.28 a barrel on the New York Mercantile Exchange. Brent oil for December settlement surged 2.5 percent to $111.66 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
• Apple Inc. (NASDAQ:AAPL) closed 7.4 percent higher after Barron’s said the stock could hit $800 a share. Apple is down about 20 percent from an intraday high of $705 hit two months ago.
• Urban Outfitters, Inc. (NASDAQ:URBN) said third-quarter profit rose to $59.5 million, or 40 cents a share, from $50.7 million, or 33 cents, in the year-ago period. Revenue came in at $692.9 million. Analysts had projected earnings of 41 cents a share on $693.1 million in revenue.
• Agilent Technologies Inc. (NYSE:A) posted fourth quarter earnings excluding items of 86 cents per share, 6 cents above the average analysts’ estimate. Revenue also topped expectations. The company forecast lower than expected current quarter adjusted earnings and revenue.
• Intel Corporation (NASDAQ:INTC) ended 0.4 percent higher after the tech giant said CEO Paul Otellini is set to retire in May.
• Nokia Corporation (ADR) (NYSE:NOK) soared 6.1 percent after the company sold out its flagship Lumia 920 smart phone in Germany.
• Wal-Mart Stores, Inc. (NYSE:WMT) gained 1.5 percent as the company said it is paying its quarterly dividend on December 27, 2012 instead of January 2, 2013 to help its investors avoid higher taxes on dividends that could be part of an eventual package to deal with the fiscal cliff.
• Homebuilders, PulteGroup, Inc. (NYSE:PHM), Lennar Corporation (NYSE:LEN), Hovnanian Enterprises, Inc. (NYSE:HOV), Toll Brothers Inc (NYSE:TOL) and D.R. Horton, Inc. (NYSE:DHI) all ended higher as the National Association of Homebuilders/Wells Fargo Builder Sentiment Index rose to its highest level in more than six years.
• MetroPCS Communications Inc (NYSE:PCS) added 2.2 percent after saying it held talks with at least eight different companies before agreeing to a merger with T-Mobile USA, raising the possibility of a counter-offer.
• Ligand Pharmaceuticals Inc. (NASDAQ:LGND) and GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) both gained in trade today after the U.S. Food and Drug Administration approved PROMACTA for the treatment of thrombocytopenia (low blood platelet count) in patients with chronic hepatitis C.
• Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) jumped in trade today amid market speculation that it was was close to being taken over.
• Engineering and construction services provider Fluor Corporation (NEW) (NYSE:FLR) expects a pre-tax charge of around $400 million in the fourth quarter following an adverse decision from an arbitration panel on the Greater Gabbard Offshore Wind Farm Project.
• Pfizer Inc. (NYSE:PFE) said a late-stage study of its pregabalin controlled-release formulation in patients with fibromyalgia met its main goal.
• Medical device make Wright Medical Group, Inc. (NASDAQ:WMGI) slid 1.7 percent after agreeing to acquire BioMimetic Therapeutics, Inc. (NASDAQ:BMTI) for about $190 million in cash and stock.
• Technology company Itron, Inc. (NASDAQ:ITRI) has named Philip Mezey as president and chief executive officer as of January 1.
• Cliffs Natural Resources Inc (NYSE:CLF) has delayed plans to expand its Bloom Lake mine in Quebec, and idle production at two of its iron ore operations, due to weaker demand for coal used in steelmaking.
• Illumina, Inc. (NASDAQ:ILMN) jumped 1.3 percent after it revealed late Friday that it offered $3.30 a share, or about $113.3 million in cash, to acquire rival Complete Genomics, Inc. (NASDAQ:GNOM).
• Ruby Tuesday, Inc. (NYSE:RT) has named Darden Restaurants, Inc. (NYSE:DRI)’s chief marketing officer JJ Buettgen as president and chief executive officer.
Hedge Fund News Update
• Canadian fertilizer maker Agrium Inc. (USA) (NYSE:AGU) (TSE:AGU) gained 3.1 percent after largest shareholder, Jana Partners named its own slate of nominees for election to the company’s board.
• Paulson & Co., Mason Capital Management LLC and Eton Park Capital Management LP are all betting that the Canadian government will approve Cnooc Limited (ADR) (NYES:CEO) (HKG:0883)’s $15.1 billion acquisition of Nexen Inc. (ADR) (NYSE:NXY) (TSE:NXY), according to a report in Bloomberg News.
• New York-based Libra Advisors will return outside capital by the end of the year.
• London-based Odey Asset Management’s UK Absolute Return Fund was up 4 percent in October, compared to a gain of 1.3 percent in the FTSE All Share Total Return Index.
• Lansdowne Partners LP acquired shares of UBS AG (USA) (NYSE:UBS) last month as it increased its holdings in the financial services sector, Bloomberg reported.
Brokerage Upgrades and Downgrades on Monday, November 19, 2012
• Agilent Technologies Inc. (NYSE:A) was lifted to “buy” from “neutral” by analysts at Goldman Sachs with a target price of $49.
• athenahealth, Inc (NASDAQ:ATHN) was upgraded to “outperform” from “market perform” by analysts at Raymond James with a target price of $75.
• BGC Partners, Inc. (NASDAQ:BGCP) was raised to a “strong buy” rating from a “underperform” rating by analysts at Raymond James with a target price of $6.50.
• Bruker Corporation (NASDAQ:BRKR) was lifted to “buy” from “neutral” by analysts at Goldman Sachs with a target price of $19.
• Diageo plc (ADR) (NYSE:DEO) was upgraded to “overweight” from “underweight” by analysts at Barclays Capital with a target price of $32.57.
• Enerplus Corp (USA) (NYSE:ERF) was raised to “outperform” from “sector perform” by analysts at RBC Capital Markets.
• Flowers Foods, Inc. (NYSE:FLO) was lifted to “buy” from “hold” by analysts at KeyBanc with a target price of $25.
• Golar LNG Partners LP (NASDAQ:GMLP) was upgraded to “buy” from “neutral” by analysts at Citigroup with a target price of $33.50.
• Halliburton Company (NYSE:HAL) was raised to “outperform” from “neutral” by analysts at Macquarie.
• Investors Bancorp, Inc. (NASDAQ:ISBC) was lifted to “buy” from “neutral” by analysts at Sterne Agee with a target price of $19.
• Marathon Oil Corporation (NYSE:MRO) was upgraded to a “focus stock” from “outperform” by analysts at Howard Weil with a target price of $39.
• Old National Bancorp (NYSE:ONB) was raised to “strong buy” from “outperform” by analysts at Raymond James with a target price of $14.
• PetSmart, Inc. (NASDAQ:PETM) was lifted to “overweight” from “equal weight” by analysts at Barclays Capital.
• PAA Natural Gas Storage, L.P. (NYSE:PNG) was upgraded to “buy” from “neutral” by analysts at Citigroup with a target price of $20.
• Rambus Inc. (NASDAQ:RMBS) was raised to “overweight” from “neutral” by analysts at JPMorgan Chase with a target price of $7.
• Spectra Energy Partners, LP (NYSE:SEP) was lifted to “buy” from “neutral” by analysts at Citigroup with a target price of $33.
• Suncor Energy Inc. (USA) (NYSE:SU) was upgraded to “overweight” from “neutral” by analysts at JPMorgan Chase.
• Williams-Sonoma, Inc. (NYSE:WSM) was raised to “buy” from “underperform” by analysts at Bank of America with a target price of $50.
• Augusta Resource Corp. (USA) (NYSEAMEX:AZC) was downgraded to “sell” from “neutral” by analysts at Dundee Securities.
• Cepheid (NASDAQ:CPHD) was lowered to “neutral” from “buy” by analysts at Goldman Sachs with a target price of $32.
• K12 Inc. (NYSE:LRN) was cut to “market perform” from “outperform” by analysts at Wells Fargo & Co.
• Laboratory Corp. of America Holdings (NYSE:LH) was downgraded to “sell” from “neutral” by analysts at Goldman Sachs with a target price of $83.
• Mechel OAO (ADR) (NYSE:MTL) was lowered by analysts at Morgan Stanley from an “overweight” rating to an “equal weight” rating.
• PennantPark Investment Corp. (NASDAQ:PNNT) was cut to “neutral” from “outperform” by analysts at Robert W. Baird with a target price of $11.
• Retail Opportunity Investments Corp (NASDAQ:ROIC) was downgraded to “underperform” from “neutral” by analysts at Bank of America with a target price of $12.75.
• V.F. Corporation (NYSE:VFC) was lowered by analysts at DA Davidson from a “buy” rating to a “neutral” rating with a target price of $169.