Post Market Update
Vanguard’s move into PE may change the landscape forever
Private equity has been growing in popularity in recent years as more and more big-name funds and institutional investors dive in. Now even indexing giant Vanguard is out to take a piece of the PE pie. During a panel at the Morningstar Investment Conference this year, Fran Kinniry of Vanguard, John Rekenthaler of Morningstar and Read More
• US: Dow: 12967.40 (-0.33%), S&P 500: 1405.32 (-0.27%), NASDAQ: 2976.78 (0.33%)
• Europe: CAC: 3500.94 (-0.80%), DAX: 7292.03 (-0.23%), FTSE: 5786.72 (-0.56%).
• Asia-Pacific: Australia: 4424.20 (0.25%), China: 2017.46 (-0.49%), Hong Kong: 21861.81 (-0.24%), India: 5635.90 (0.17%), Japan: 9388.94 (0.24%).
• Metals: Gold: 1749.60 (-0.10%), Silver: 34.14 (0.06%), Copper: 3.54 (0.24%)
• Energy: Crude Oil: 87.74 (-0.61%), Natural Gas: 3.73 (-4.38%)
• Commodities: Corn: 7.51 (0.20%), Soya Bean: 14.24 (0.42%), Wheat: 8.63 (0.26%)
• Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2970 (0.04%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6029 (0.03%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 82.0350 (-0.44%)
• 10 year US Treasury: 1.666% (-0.024)
Market and Economy News Update
U.S. markets end mostly lower: U.S. markets rebounded from lows made earlier in the session, but still closed lower on Monday, as investors focused on upcoming negotiations in Washington, with lawmakers under pressure to reach a deal with the White House before the end of the year. The Dow Jones Industrial Average (INDEXDJX:.DJI) declined 42.31 points, or 0.33 percent, to close at 12,967.37. The S&P 500 (INDEXSP:.INX) slid 2.86 points, or 0.20 percent, to finish at 1,406.29. The NASDAQComposite (INDEXNASDAQ:.IXIC) added 9.93 points, or 0.33 percent, to end at 2,976.78.
Oil prices fall: Oil prices declined on Monday as concerns about Greek debt talks overshadowed worries about potential supply disruptions amid the tensions in the Mid-east region. Crude oil for January delivery dropped 0.6 percent, to settle at $87.74 a barrel on the New York Mercantile Exchange. Brent oil for January settlement lost 0.5 percent to $110.82 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
• Google Inc (NASDAQ:GOOG) ended 1 percent lower after the chief executive of wireless hotspot provider ICOA said his firm had never been in acquisition talks with Google. A press release had earlier stated that Google was buying ICOA for $400 million.
• Wal-Mart Stores, Inc. (NYSE:WMT) fell 0.5 percent despite saying it had its “best ever” Black Friday events, selling over 1.8 million towels, 1.3 million televisions and 1.3 million dolls.
• Equity Residential (NYSE:EQR) and AvalonBay Communities, Inc. (NYSE:AVB) have agreed to acquire apartment owner Archstone Enterprise LP from Lehman Brothers Holdings Inc. for $16 billion.
• Handset maker Nokia Corporation (NYSE:NOK) unveiled two emerging markets focused basic mobile phones, the Asha 205 and the Nokia 206.
• Knight Capital Group Inc. (NYSE:KCG) soared 13.3 percent following news that Chicago-based Getco LLC and Virtu Financial LLC in New York are pursuing purchase of the entire company.
• eBay Inc (NASDAQ:EBAY) gained 5 percent amid investor optimism that a surge in online shopping ahead of the year-end holidays will benefit the biggest online marketplace.
• The McGraw-Hill Companies, Inc. (NYSE:MHP) added 0.4 percent after agreeing to sell its education business to private equity firm Apollo Global Management LLC (NYSE:APO) in a deal worth $2.5 billion.
• The U.S. Food and Drug Administration said Johnson & Johnson (NYSE:JNJ)’s proposed experimental tuberculosis treatment bedaquiline appeared “safe and well-tolerated.”
• Ceradyne, Inc. (NASDAQ:CRDN) plunged in early trade but recovered to close 0.1 percent lower following reports that its body armor plates worn by special operations forces in the U.S. military were being recalled due to potential failure.
• Offshore drilling company Seadrill Ltd (NYSE:SDRL) reported third quarter profit of $216 million, or 40 cents a share, compared to $58 million, or 7 cents a share, in the year-ago quarter. Revenue increased 6.1 percent to $1.09 billion. Analysts had projected earnings of 68 cents a share on revenue of $1.11 billion.
• Footwear retailer Deckers Outdoor Corp (NASDAQ:DECK) jumped 6.6 percent after Bloomberg News reported that the company could be an attractive acquisition target for private-equity firms and rivals like V.F. Corporation (NYSE:VFC).
• Defense contractor Raytheon Company (NYSE:RTN) has opened a new missile integration and test facility in Huntsville, Alabama that is expected to create 300 new jobs.
• Engineering company Curtiss-Wright Corp. (NYSE:CW) has acquired Cimarron Energy Holding Company LLC for about $135.1 million in cash.
• Mohawk Industries, Inc. (NYSE:MHK) fell 2.4 percent following reports that the company is in talks to Italian ceramic-tile company Marazzi Group.
• Ethan Allen Interiors Inc. (NYSE:ETH) declared a special dividend of 41 cents a share, payable on December 20 to shareholders of record as of December 5.
• Backup generator maker Generac Holdings Inc. (NYSE:GNRC) tumbled 9 percent after unveiling a secondary offering of about 11.5 million shares.
Hedge Fund News Update
• Mathew Martoma, a former SAC Capital portfolio manager, accused of making illegal trades, was today released on a $5 million bail after making his first appearance in a New York court.
• Kevin Kwong, a partner at Hong Kong-based event-driven hedge fund Senrigan Capital, has left the firm this month to start his own investment company, according to a Reuters report.
• Muddy Waters founder Carson Block said he was considering starting his own hedge fund, according to an interview telecast on Reuters TV.
Brokerage Upgrades and Downgrades on Monday, November 26, 2012
• AK Steel Holding Corporation (NYSE:AKS) was lifted to “neutral” from “sell” by analysts at UBS AG.
• Broadcom Corporation (NASDAQ:BRCM) was upgraded to “buy” from “hold” by analysts at Benchmark Co.
• Boston Scientific Corporation (NYSE:BSX) was raised to a “buy” rating from a “neutral” rating by analysts at Citigroup.
• CoStar Group, Inc. (NASDAQ:CSGP) was lifted to “overweight” from “equal weight” by analysts at Stephens.
• DSW Inc. (NYSE:DSW) was upgraded to “buy” from “hold” by analysts at KeyBanc Capital Markets with a target price of $81.
• Eaton Corporation (NYSE:ETN) was raised to “neutral” from “underweight” by analysts at Atlantic Securities.
• Exelon Corporation (NYSE:EXC) was lifted to “buy” from “hold” by analysts at Deutsche Bank.
• James River Coal Company (NASDAQ:JRCC) was upgraded to “outperform” from “market perform” by analysts at Raymond James.
• Knight Capital Group Inc. (NYSE:KCG) was raised to “market perform” from “underperform” by analysts at Keefe, Bruyette & Woods.
• Lockheed Martin Corporation (NYSE:LMT) was lifted to “outperform” from “market perform” by analysts at Sanford C. Bernstein.
• Sequenom, Inc. (NASDAQ:SQNM) was upgraded to “overweight” from “equal weight” by analysts at Stephens.
• Mosaic Co (NYSE:MOS) was raised to “overweight” from “neutral” by analysts at Atlantic Securities.
• Union First Market Bankshares Corp. (NASDAQ:UBSH) was lifted to “buy” from “hold” by analysts at UBS AG with a target price of $16.50.
• Aeropostale, Inc. (NYSE:ARO) was downgraded to “neutral” from “buy” by analysts at Janney Montgomery Scott with a target price of $14.
• Ball Corporation (NYSE:BLL) was lowered to “hold” from “buy” by analysts at Deutsche Bank.
• Chico’s FAS, Inc. (NYSE:CHS) was cut to “market perform” from “outperform” by analysts at FBR Capital with a target price of $18.
• Crown Holdings, Inc. (NYSE:CCK) was downgraded to “hold” from “buy” by analysts at Deutsche Bank.
• Community Health Systems (NYSE:CYH) was lowered by analysts at Robert W. Baird from an “outperform” rating to a “neutral” rating with a target price of $31.
• Dreamworks Animation Skg Inc (NASDAQ:DWA) was cut to “sell” from “average” by analysts at Caris & Co. with a target price of $15.
• Health Management Associates, Inc. (NYSE:HMA) was downgraded to “neutral” from “outperform” by analysts at Robert W. Baird with a target price of $9.
• H.J. Heinz Company (NYSE:HNZ) was lowered by analysts at Stifel Nicolaus from a “buy” rating to a “hold” rating with a target price of $58.
• Illumina, Inc. (NASDAQ:ILMN) was cut to “neutral” from “outperform” by analysts at Robert W. Baird with a target price of $54.
• McDonald’s Corporation (NYSE:MCD) was downgraded to “neutral” from “buy” by analysts at Lazard.
• Vanguard Health Systems, Inc. (NYSE:VHS) was lowered to “neutral” from “outperform” by analysts at Robert W. Baird with a target price of $12.
• Verisign, Inc. (NASDAQ:VRSN) was cut to “equal weight” from “overweight” by analysts at First Analysis.
• Wesco Aircraft Holdings Inc (NYSE:WAIR) was downgraded to “underperform” from “buy” by analysts at Bank of America.