Post Market Update
Stocks that traded actively in U.S. markets on Monday include: Alcoa Inc (NYSE:AA), Dell Inc. (NASDAQ:DELL), Intel Corporation (NASDAQ:INTC), Natus Medical Inc (NASDAQ:BABY), PMC Commercial Trust (NYSEMKT:PCC) and Hasbro, Inc. (NASDAQ:HAS).
Seth Klarman: Investors Can No Longer Rely On Mean Reversion
"For most of the last century," Seth Klarman noted in his second-quarter letter to Baupost's investors, "a reasonable approach to assessing a company's future prospects was to expect mean reversion." He went on to explain that fluctuations in business performance were largely cyclical, and investors could profit from this buying low and selling high. Also Read More
US: Dow: 15224.70 (0.59%), S&P 500: 1640.46 (0.53%), NASDAQ: 3484.83 (0.16%)
Europe: CAC: 3823.83 (1.83%), DAX: 7968.54 (2.04%), FTSE: 6450.07 (1.16%)
Asia-Pacific: Australia: 4809.50 (-0.67%), China: 1958.27 (-2.40%), Hong Kong: 20582.19 (-1.32%), Japan: 14109.34 (-1.42%).
Metals: Gold: 1234.20 (1.83%), Silver: 19.04 (1.61%), Copper: 3.10 (1.13%)
Energy: Crude Oil: 102.82 (-0.31%), Natural Gas: 3.72 (-0.43%)
Commodities: Corn: 5.00 (1.88%), Soya Bean: 12.52 (1.95%), Wheat: 6.63 (0.45%)
Currency: EUR/USD: 1.2869 (0.31%), GBP/USD: 1.4951 (0.41%), USD/JPY: 101.0200 (-0.18%)
10-year US Treasury: 2.641% (-0.098)
U.S. markets end higher: Stocks closed higher for the third consecutive session as Wall Street geared up for the start of the second-quarter earnings season. On the economic front, consumer credit increased by $19.6 billion in May to $2.8 trillion, according to data released by the Federal Reserve. Economists had expected consumer credit to rise $12.5 billion. The Dow Jones Industrial Average (INDEXDJX:.DJI) added 88.85 points, or 0.6 percent, to 15,224.69, while the S&P 500 (INDEXSP:.INX) gained 8.57 points, or 0.5 percent, to end at 1,640.46. The NASDAQ (INDEXNASDAQ:.IXIC) rose 5.45 points, or 0.2 percent, to end at 3,484.83.
Stocks in News:
Alcoa Inc (NYSE:AA)
Alcoa Inc (NYSE:AA) reported a fiscal second-quarter loss of $119 million, or 11 cents a share, compared with a $2 million loss, or break-even a share, in the same period last year. Excluding one-time items, earnings came in at 7 cents a share. Revenue declined to $5.85 billion from $5.96 billion in the year-ago period. Analysts were expecting adjusted earnings of 6 cents a share on sales of $5.85 billion. Shares rose in after-hours trading following the results.
Dell Inc. (NASDAQ:DELL)
The PC maker gained in trade after investment advisory firm Institutional Shareholder Services Inc urged Dell’s stockholder’s to vote in favor a $24.4 billion offer from founder and CEO Michael Dell, saying the offer provides “certainty of value.” ISS is the biggest shareholder advisory firm, and its recommendation has increased the odds of the Silver Lake/Michael Dell deal to prevail against Carl Icahn’s rival bid. Dell shareholders will vote on the offer on July 18.
Intel Corporation (NASDAQ:INTC)
Intel Corporation (NASDAQ:INTC) shares were among the biggest decliners in the S&P 500 after Evercore lowered its rating on the chipmaker to “underweight” from “equal weight” and slashed its price target to $20 from $22. Separately, Citi analyst Glen Yeung cut his estimates on Intel. Shares of rival chipmakers Advanced Micro Devices, Inc. (NYSE:AMD) and Micron Technology, Inc. (NASDAQ:MU) also fell in trade.
Natus Medical Inc (NASDAQ:BABY)
Shares of the medical device company plunged in trade after it lowered its second-quarter guidance due to an unexpected decline in international revenue. Natus now expects revenue for the quarter ended June 30 to be between $81 million and $82 million, down from its previous guidance for $86 million to $90 million. Analysts are expecting revenue of $88.8 million for the quarter.
PMC Commercial Trust (NYSEMKT:PCC)
PMC Commercial Trust (NYSEMKT:PCC) has agreed to merge with CIM Urban REIT LLC in an all-stock deal. The companies expect to complete the deal during the fourth quarter of the year, post which CIM Group will manage most of the merged entity’s business. PMC Commercial shares soared 15 percent to $9.70.
Hasbro, Inc. (NASDAQ:HAS)
The toy maker has acquired a majority stake in mobile gaming company, Backflip Studios, for $112 million in cash. Backflip develops popular mobile games like DragonVale, NinJump and Paper Toss. Hasbro expects the deal to be neutral to slightly accretive to its current-year financial results. Hasbro shares closed Monday trading at $46.71.