Morning Market News for December 13th 2012. Among the stocks in focus for today, Google, Amazon, Wal-Mart, Best Buy, And Ciena.
Morning Market Update
Michael Mauboussin: Challenges and Opportunities in Active Management And Using BAIT #MICUS
Michael Mauboussin's notes from his presentation at the 2020 Morningstar Investment Conference, held on September 16th and 17th. Q2 2020 hedge fund letters, conferences and more Michael Mauboussin: Challenges and Opportunities in Active Management Michael Mauboussin is Head of Consilient Research at Counterpoint Global in New York. Previously, he was Director of Research BlueMountain Capital, Read More
• US: Dow Futures: 13258.00 (0.21%), S&P 500 Futures: 1426.80 (-0.03%), NASDAQ Futures: 2671.50 (0.05%)
• Europe: CAC: 3637.08 (-0.26%), DAX: 7584.76 (-0.40%), FTSE: 5922.66 (-0.39%).
• Asia-Pacific: Australia: 4582.80 (-0.02%), China: 2061.48 (-1.03%), Hong Kong: 22445.58 (-0.26%), India: 5851.50 (-0.62%), Japan: 9742.73 (1.66%).
• Metals: Gold: 1694.50 (-1.36%), Silver: 32.80 (-2.92%), Copper: 3.66 (-1.39%)
• Energy: Crude Oil: 86.42 (-0.40%), Natural Gas: 3.37 (-0.41%)
• Commodities: Corn: 7.24 (-0.45%), Soya Bean: 14.76 (0.00%), Wheat: 8.13 (-1.28%)
• Currency: EUR/USD: 1.3063 (-0.08%), GBP/USD: 1.6142 (-0.04%), USD/JPY: 83.4200 (0.19%)
• 10 year US Treasury: 1.707% (0.010)
Market and Economic News Update
U.S. stock-index futures little changed: U.S. stock-index futures are pointing to a flat on Thursday as jobless claims dropped more than forecast. Investors were also focused on the ongoing fiscal cliff negotiations. Jobless claims fell 29,000 to a seasonally adjusted 343,000 in the week ended December 8, according to the Labor Department. Economists had forecast 369,000 claims. Separately, producer prices fell 0.8 percent in November, according to the Labor Department, reflecting the biggest drop in the cost of energy in over three years. Economists had expected a decline of 0.5 percent.
European markets fall: European markets are down in trade today as euro zone finance ministers agreed to release the next round of 34.3 billion euro ($54.8 billion) aid to Greece. The German DAX (INDEXDB:DAX) was trading 0.4 percent lower at 7584.76, the FTSE 100 (INDEXFTSE:UKX) shed 0.4 percent to 5922.66 and the CAC 40 (INDEXEURO:PX1) gave up 0.3 percent to 3637.08. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was down 0.2 percent.
Asian markets end mostly lower: Asian markets closed lower on Thursday on mild profit-taking pressure, while Japanese stocks ended at eight-month highs after the yen touched an almost nine-month low versus the dollar. The NIKKEI 225 (INDEXNIKKEI:NI225) rallied 1.7 percent to 9742.73 points. The HANG SENG INDEX (INDEXHANGSENG:HIS) closed down 0.3 percent at 22445.58, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) lost 1 percent to close at 2061.48. The S&P/ASX 200 (INDEXASX:XJO) index ended flat at 4582.80 points. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index ended down 0.7 percent.
Stocks to Watch
Google Inc (NASDAQ:GOOG)
Google Inc (NASDAQ:GOOG) has released a downloadable version of its Maps application for Apple Inc. (NASDAQ:AAPL)’s iPhones, iPad and other iOS devices, which was reportedly on the store’s website from late Wednesday. Apple Inc. (NASDAQ:AAPL) inserted its own maps into the iPhone in September which prompted widespread complaints from users about inaccurate data and other issues. Apple Inc. (NASDAQ:AAPL) CEO Tim Cook later issued a rare public apology, replaced the executive in charge of Apple Inc. (NASDAQ:AAPL)’s mobile operating system, and recommended that iPhone owners consider using Google maps through a mobile browser. The original Google Inc (NASDAQ:GOOG)-powered app was an essential feature of the iPhone since its debut in 2007. Google Inc (NASDAQ:GOOG) is hailing the new Maps app, available in more than 40 countries and 29 languages, as a major improvement from the one evicted by Apple Inc. (NASDAQ:AAPL). Shares of Google Inc (NASDAQ:GOOG) were up, while Apple Inc. (NASDAQ:AAPL) fell in early morning trade.
Amazon.com, Inc. (NASDAQ:AMZN)
European Union regulators ended a probe into e-book price fixing on Thursday, accepting an offer by Apple Inc. (NASDAQ:AAPL) and four other publishers to overhaul pricing restrictions on Amazon.com, Inc. (NASDAQ:AMZN) and other retailers. Apple Inc. (NASDAQ:AAPL), CBS Corporation (NYSE:CBS)’s Simon & Schuster, News Corp (NASDAQ:NWSA)’s HarperCollins, Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan unit and Lagardere SCA (EPA:MMB)’s Hachette Livre will drop pricing agreements they struck in 2010 that targeted Amazon.com, Inc. (NASDAQ:AMZN)’s low e-book prices, European Union Competition Commissioner Joaquin Almunia said on Thursday. The deal will allow online retailers like Amazon.com, Inc. (NASDAQ:AMZN) to resume discounting their titles in the region. Amazon.com, Inc. (NASDAQ:AMZN) was inactive in morning trade.
Wal-Mart Stores, Inc. (NYSE:WMT)
Wal-Mart Stores, Inc. (NYSE:WMT) is in talks to buy an 80 percent stake in Turkey’s biggest retailer Migros Ticaret AS from private equity group BC Partners, the Financial Times reported late yesterday. The deal would reportedly value Migros at more than $4 billion, including debt, and Wal-Mart Stores, Inc. (NYSE:WMT) is expected to make a formal offer in the first quarter of next year. Wal-Mart Stores, Inc. (NYSE:WMT) has been in news recently for allegations of bribery in emerging markets like India and Mexico, which forced the company to order an internal inquiry into its operations. Shares of Wal-Mart Stores, Inc. (NYSE:WMT) were inactive in pre-market trading.
Juniper Networks, Inc. (NYSE:JNPR)
Juniper Networks, Inc. (NYSE:JNPR) has agreed to acquire software-networking startup Contrail in a cash and stock deal worth approximately $176 million, the company revealed in an SEC filing. Juniper Networks, Inc. (NYSE:JNPR) will pay around $57.5 million in cash and will issue up to around 5.82 million Juniper Networks, Inc. (NYSE:JNPR) shares to Contrail stockholders. The deal is expected to close before the end of this year. In the filing, Juniper Networks, Inc. (NYSE:JNPR) said that the company will gain from Contrail’s specialization in developing software-defined networking technology. Many analysts believe that the relatively new SDN technology could pose a threat to the traditional, hardware-based networking solutions offered by companies such as Juniper Networks, Inc. (NYSE:JNPR) and Cisco Systems, Inc. (NASDAQ:CSCO).
Endo Health Solutions Inc (NASDAQ:ENDP)
Pharmaceutical company Endo Health Solutions Inc (NASDAQ:ENDP) said that its CEO David Holveck will retire in 2013. Holveck will quit the board of directors and leave the company by May 2013. Endo Health Solutions Inc (NASDAQ:ENDP) also lowered its 2012 and 2013 earnings forecast. The company said it now anticipates 2012 adjusted earnings to be at the low end of its previous guidance range of between $5 a share and $5.10 a share. In addition, Endo Health Solutions Inc (NASDAQ:ENDP) said it doesn’t expect to achieve its previous 2013 adjusted earnings of $5.20 to $5.40 per share on revenue of between $3 billion and $3.2 billion. Endo Health Solutions Inc (NASDAQ:ENDP) tumbled in early morning trade.
Best Buy Co., Inc. (NYSE:BBY)
Best Buy Co., Inc. (NYSE:BBY) rallied in pre-market amid reports that founder Richard Schulze will make a fully financed offer to buy the embattled consumer electronics retailer by the end of the week. The Minneapolis Star Tribune reported late Wednesday that Schulze’s buyout price could range from $5 billion to $6 billion. Schulze is also planning to meet the management of Best Buy Co., Inc. (NYSE:BBY) on Thursday and Friday of this week. Best Buy Co., Inc. (NYSE:BBY) shares were up 15 percent to $14.10 in pre-market trading.
Research In Motion Limited (TSE:RIM) (NASDAQ:RIMM)
The U.S. Immigration and Customs Enforcement Agency will use Research In Motion Limited (TSE:RIM) (NASDAQ:RIMM)’s new BlackBerry 10 smart-phone on a trial basis, according to a Reuters report. The federal agency had earlier divulged plans to ditch the brand in favor of Apple Inc. (NASDAQ:AAPL)’s iPhone. The US Immigration and Customs Enforcement agency said it will begin a pilot program on Research In Motion Limited (TSE:RIM) (NASDAQ:RIMM)’s new line of BlackBerry 10 smart phones and BlackBerry Enterprise Service 10 early next year. Shares of Research In Motion Limited (TSE:RIM) (NASDAQ:RIMM) gained 2 percent in New York trading.
Boston Beer Co Inc (NYSE:SAM)
Boston Beer Co Inc (NYSE:SAM) raised its 2012 full-year earnings forecast to between $4.30 a share and $4.60 a share, up from its previous guidance of $3.80 a share to $4.20 a share, and above Wall Street expectations for $4.21 a share. Boston Beer Co Inc (NYSE:SAM) attributed the increase to stronger shipments and the timing of certain administrative and other expenses. The Sam Adams brewer also raised its 2013 sales guidance. Boston Beer Co Inc (NYSE:SAM) had recently initiated steps to increase its sales force and is spending more on advertising and local marketing programs to support its brands. Boston Beer Co Inc (NYSE:SAM) added $15.77 to $130.00 in pre-market trading.
Ciena Corporation (NASDAQ:CIEN)
Ciena Corporation (NASDAQ:CIEN) said fourth quarter loss widened to $38.8 million, or 39 cents per share from $22.3 million, or 23 cents per share, in the year-ago period. Excluding items, Ciena Corporation (NASDAQ:CIEN) lost 7 cents a share, one cent wider than analyst estimates. Network gear makers like Ciena Corporation (NASDAQ:CIEN) have been hurt by spending cuts and delayed purchases by telecom service providers. Revenue increased 2 percent to $465.5 million, also trailing estimates of $468.3 million. Ciena Corporation (NASDAQ:CIEN) said it expects current quarter revenue of between $435 million and $460 million, compared to Street expectation for $458.6 million. Ciena Corporation (NASDAQ:CIEN) was down 4 percent at $14.95 before the bell.
CA, Inc. (NASDAQ:CA)
Software maker CA, Inc. (NASDAQ:CA) announced its CEO William McCracken will step down in early 2013 and will be succeeded by Michael Gregoire. McCracken, who has been CEO since early 2010, will also leave CA, Inc. (NASDAQ:CA)’s board. Gregoire was formerly the president and CEO of Taleo Corp., a maker of employee-recruiting software that was acquired by Oracle Corporation (NASDAQ:ORCL) earlier this year for about $1.9 billion. CA, Inc. (NASDAQ:CA) was inactive in pre-market trading.
Pier 1 Imports, Inc. (NYSE:PIR)
Home-furnishings retailer Pier 1 Imports, Inc. (NYSE:PIR) said fiscal third quarter earnings gained 3 percent to $23.7 million, or 22 cents a share, from $23 million, or 21 cents a share, a year earlier. Excluding one-time items, earnings came in at 25 cents a share. Net sales were up 11 percent to $424.53 million, from $382.7 million, in the year-ago period. Analysts were expecting Pier 1 Imports, Inc. (NYSE:PIR) to earn 24 cents a share on revenue of $418.49 million. Pier 1 Imports, Inc. (NYSE:PIR) raised its full-year earnings outlook and said it now expects per-share earnings of between $1.17 to $1.21 a share, up from its earlier guidance of $1.10 to $1.16 a share. The company also said that its board has authorized a new $100 million share repurchase program.
Economic Calendar for Thursday, December 13, 2012:
08:30 A.M. ET: Initial Jobless Claims (Week ending Saturday, December 08, 2012)
08:30 A.M. ET: Continuing Jobless Claims (Week ending Saturday, December 01)
08:30 A.M. ET: Producer Price Index (YoY) (November)
08:30 A.M. ET: Producer Price Index (MoM) (November)
08:30 A.M. ET: Producer Price Index ex Food & Energy (YoY) (November)
08:30 A.M. ET: Producer Price Index ex Food & Energy (MoM) (November)
08:30 A.M. ET: Retail Sales (MoM) (November)
08:30 A.M. ET: Retail Sales ex Autos (MoM) (November)
09:45 A.M. ET: Bloomberg Consumer Comfort Index (Week ending Sunday, Dec 09)
10:00 A.M. ET: Business Inventories (October)
10:30 A.M. ET: EIA Natural Gas Report (Week ending Friday, December 07)
01:00 P.M. ET: 30-Year Bond Auction
04:30 P.M. ET: Fed Balance Sheet
04:30 P.M. ET: Money Supply