• US: Dow: 12985.10 (0.83%), S&P 500: 1409.91 (0.78%), NASDAQ: 2991.78 (0.81%)
• Europe: CAC: 3515.39 (0.37%), DAX: 7343.41 (0.15%), FTSE: 5803.28 (0.06%).
• Asia-Pacific: Australia: 4447.30 (-0.21%), China: 1973.52 (-0.89%), Hong Kong: 21708.98 (-0.62%), India: 5727.45 (0.00%), Japan: 9308.35 (-1.23%).
• Metals: Gold: 1716.50 (-1.48%), Silver: 33.68 (-0.87%), Copper: 3.52 (-0.34%)
• Energy: Crude Oil: 86.49 (-0.79%), Natural Gas: 3.85 (-0.77%)
• Commodities: Corn: 7.64 (0.00%), Soya Bean: 14.46 (-0.21%), Wheat: 8.91 (0.31%)
• Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2941 (-0.03%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6019 (-0.01%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 81.9650 (-0.15%)
• 10 year US Treasury: 1.628% (-0.008)
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
Market and Economy News Update
U.S. markets end higher: U.S. markets reversed losses to close near the highs of the day on Wednesday as investors welcomed positive comments from President Barack Obama and Speaker John Boehner on the “fiscal cliff” issue. On the economic front, new home sales dropped in October to a seasonally adjusted 368,000, according to the Commerce Department. The Dow Jones Industrial Average (INDEXDJX:.DJI) rallied 106.98 points, or 0.83 percent, to end at 12,985.11. The S&P 500 (INDEXSP:.INX) advanced 10.99 points, or 0.79 percent, to finish at 1,409.93. The NASDAQComposite (INDEXNASDAQ:.IXIC) jumped 23.99 points, or 0.81 percent, to close at 2,991.78.
Oil prices fall: Oil prices declined for the third straight session on Wednesday as concern about a looming U.S. budget crisis mounted. But prices rebounded from the day’s lows following a decline in last week’s U.S. crude supplies. Crude oil for January delivery dropped 0.8 percent, to settle at $86.49 a barrel on the New York Mercantile Exchange. Brent oil for January settlement lost 0.6 percent to $109.11 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
• BP plc (ADR) (NYSE:BP) (LON:BP) ended higher despite news that the US Environmental Protection Agency has temporarily suspended the British oil giant from getting new contracts from the Federal Government.
• 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 lower following news that new home sales dropped 0.3 percent in October.
• The Walt Disney Company (NYSE:DIS) raised its annual dividend by 25 percent to 75 cents a share from 60 cents a share.
• Technology company NCR Corporation (NYSE:NCR) has agreed to acquire Israel-based Retalix Limited (NASDAQ:RTLX) for $30 a share, or $650 million.
• The Allstate Corporation (NYSE:ALL), the largest publicly traded home and auto insurer in the country, said it expects to report $1.08 billion in catastrophe losses in October, mostly from superstorm Sandy.
• Workday Inc (NYSE:WDAY) reported third quarter adjusted loss of 39 cents a share, on revenue of $72.62 million. Analysts had forecast a loss of 49 cents a share, on revenue of $64.05 million
• Luxury watch maker Movado Group, Inc (NYSE:MOV) surged 10 percent after third-quarter adjusted profit topped Street expectations. The company also raised its fiscal-year guidance, and announced a special dividend of 75 cents a share.
• Wells Fargo & Company (NYSE:WFC) has named retired PricewaterhouseCoopers LLP partner Howard V. “Rick” Richardson to its board of directors, effective January 1.
• Principal Financial Group Inc (NYSE:PFG) dropped 1.9 percent after the insurer said corporate losses in 2013 may be as much as $165 million.
• Women’s apparel retailer Ann Inc (NYSE:ANN) rose 8.2 percent after third quarter profit and revenue topped estimates. The company also forecast better than expected current quarter and full-year revenue.
• Internet security provider AVG Technologies NV (NYSE:AVG) ended 9.6 percent higher after entering into a new Internet search-and-advertising services agreement with Google Inc (NASDAQ:GOOG).
• Oklahoma-based Gulfport Energy Corporation (NASDAQ:GPOR) soared 16 percent after reporting strong test results on a Utica Shale well.
• Industrial machinery maker SPX Corporation (NYSE:SPW), and at least four buyout firms, are bidding for Gardner Denver, Inc. (NYSE:GDI), Bloomberg News reported.
• Kirby Corporation (NYSE:KEX) closed 3.1 percent higher after agreeing to acquire tank barges and tugboats operator Penn Maritime Inc. and Maritime Investments LLC for approximately $295 million for cash.
• Upscale grocery chain The Fresh Market Inc (NASDAQ:TFM) plunged 12 percent following lower than expected third quarter earnings and news that its Chief Financial Officer Lisa Klinge is leaving to go into private equity.
• W&T Offshore, Inc. (NYSE:WTI) slid 2.3 percent after cutting its production outlook for the year, citing production delays and lower natural gas liquids output.
• Apparel retailer Express, Inc. (NASDAQ:EXPR) soared 9 percent after reporting third quarter profit and revenue that beat the average analysts’ estimate. The company also forecast strong earnings for the current quarter.
• Charter Financial Corp (NASDAQ:CHFN) gained 6.6 percent after First Charter MHC agreed to sell its majority ownership in the company through a stock offering.
• Guidewire Software Inc (NASDAQ:GWRE) closed 6.2 percent higher after the insurance industry software provider posted better than expected fiscal first-quarter adjusted earnings and revenue.
• Canada’s Imperial Oil Limited (USA) (NYSEAMEX:IMO) (TSE:IMO) said it will pay 1.55 billion Canadian dollars ($1.56 billion) for a 50 percent stake in Celtic Exploration Ltd. (TSE:CLT) after the Calgary-based exploration and production company is taken over by Exxon Mobil Corporation (NYSE:XOM).
• Chinese solar-products maker JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO) jumped 7.7 percent after reporting narrower than expected third-quarter loss, on revenue that topped estimates.
Hedge Fund News Update
• Chicago-based Citadel Advisors disclosed a 6.1 percent stake in online real estate company Zillow Inc (NASDAQ:Z), according to a regulatory filing.
• Quantitative hedge fund managers are having a dismal year, with some of the sector’s biggest names like Winton Capital, Geneva-based BlueTrend and London-based Aspect Capital, struggling to make money amid the unorthodox monetary policy and rampant political intervention in markets, according to a report in the Financial Times.
• Federal regulators told SAC Capital Advisors that they are preparing a civil fraud case against the $14-billion hedge fund run by the billionaire investor Steven A Cohen.
• London-based Stratton Street Capital LLP is seeking to raise money from Asian investors for the $215 million Renminbi Bond Fund, according to a report in Bloomberg News.
• Sutesh Sharma’s Portman Square Capital, which plans to launch before the end of the year, is struggling to reach its initial target of $500 million, Financial News reported.
• CQS founder Michael Hintze told the Reuters Global Investment 2013 Outlook Summit that European loans and corporate debt were totally mis-priced, and comparatively equities were beginning to look attractive.
Brokerage Upgrades and Downgrades on Wednesday, November 28, 2012
• AK Steel Holding Corporation (NYSE:AKS) was lifted to “hold” from “sell” by analysts at Dahlman Rose.
• Companhia Energetica de Minas Gerais (ADR) (NYSE:CIG) was upgraded to “overweight” from “equal weight” by analysts at Morgan Stanley.
• Compass Group plc (ADR) (NASDAQ:CMPGY) was raised to a “hold” rating from an “underperform” rating by analysts at Jefferies Group.
• Eni SpA (ADR) (NYSE:E) was lifted to “overweight” from “equal weight” by analysts at Morgan Stanley.
• Entergy Corporation (NYSE:ETR) was upgraded to “outperform” from “neutral” by analysts at Macquarie with a target price of $69.
• Fortinet, Inc. (NASDAQ:FTNT) was raised to “outperform” from “market perform” by analysts at Oppenheimer with a target price of $24.
• Goodrich Petroleum Corporation (NYSE:GDP) was lifted to “outperform” from “sector perform” by analysts at Iberia Capital.
• Hercules Offshore, Inc. (NASDAQ:HERO) was upgraded to “buy” from “hold” by analysts at Deutsche Bank with a target price of $8.
• IAMGOLD Corporation (USA) (NYSE:IAG) was raised to “overweight” from “neutral” by analysts at HSBC Plc.
• Nabors Industries Ltd. (NYSE:NBR) was lifted to “buy” from “hold” by analysts at Deutsche Bank with a target price of $28.
• Pioneer Energy Services Corp (NYSE:PES) was upgraded to “buy” from “hold” by analysts at Deutsche Bank with a target price of $10.
• Patterson-UTI Energy, Inc. (NASDAQ:PTEN) was raised to “buy” from “hold” by analysts at Deutsche Bank with a target price of $28.
• Vornado Realty Trust (NYSE:VNO) was lifted to “buy” from “neutral” by analysts at Citigroup with a target price of $85.
• Berry Petroleum Company (NYSE:BRY) was downgraded to “market perform” from “outperform” by analysts at BMO Capital Markets with a target price of $35.
• CenturyLink, Inc. (NYSE:CTL) was lowered to “neutral” from “overweight” by analysts at Piper Jaffray with a target price of $42.
• ENSCO PLC (NYSE:ESV) was cut to “hold” from “buy” by analysts at Deutsche Bank with a target price of $58.
• Fred’s, Inc. (NASDAQ:FRED) was downgraded to “neutral” from “buy” by analysts at SunTrust.
• NuStar Energy L.P. (NYSE:NS) was lowered by analysts at Zacks from a “neutral” rating to an “underperform” rating with a target price of $40.
• Ralcorp Holdings, Inc. (NYSE:RAH) was cut to “neutral” from “buy” by analysts at UBS AG with a target price of $90.
• Resolute Energy Corp (NYSE:REN) was downgraded to “market perform” from “outperform” by analysts at BMO Capital Markets.
• Rowan Companies PLC (NYSE:RDC) was lowered by analysts at Deutsche Bank from a “buy” rating to a “hold” rating.
• Seadrill Ltd (NYSE:SDRL) was cut to “hold” from “buy” by analysts at Deutsche Bank with a target price of $37.
• The Fresh Market Inc (NASDAQ:TFM) was downgraded to “hold” from “buy” by analysts at Deutsche Bank.
• Universal Technical Institute, Inc. (NYSE:UTI) was lowered to “underperform” from “market perform” by analysts at BMO Capital Markets.
• Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) was cut to “hold” from “buy” by analysts at Argus.
• Windstream Corporation (NASDAQ:WIN) was downgraded to “underweight” from “neutral” by analysts at Piper Jaffray.