Morning Market Update
Many value investors have given up on their strategy over the last 15 years amid concerns that value investing no longer worked. However, some made small adjustments to their strategy but remained value investors to the core. Now all of the value investors who held fast to their investment philosophy are being rewarded as value Read More
• US: Dow: 13037.00 (-0.15%), S&P 500: 1408.60 (0.03%), NASDAQ: 2653.00 (0.19%)
• Europe: CAC: 3431.05 (0.57%), DAX: 7229.87 (0.41%), FTSE: 5802.41 (-0.05%).
• Asia-Pacific: Australia: 4472.40 (-0.84%), China: 2066.21 (-1.71%), Hong Kong: 21545.57 (-1.23%), India: 5664.30 (-0.72%), Japan: 8933.06 (-1.37%).
• Metals: Gold: 1710.60 (-0.14%), Silver: 32.06 (-0.06%), Copper: 3.56 (0.30%)
• Energy: Crude Oil: 86.25 (0.23%), Natural Gas: 3.38 (-1.34%)
• Commodities: Corn: 7.42 (0.07%), Soya Bean: 15.63 (-0.18%), Wheat: 8.72 (0.23%)
• Currency: EUR/USD: 1.2922 (-0.10%), GBP/USD: 1.6118 (-0.01%), USD/JPY: 79.8400 (-0.59%)
• 10 year US Treasury: 1.789% (-0.034)
Financial and Economic News Update
U.S. stock-index futures rebound from lows: U.S. stock-index futures pared losses and are pointing to a higher open on Friday after the U.S. economy grew more than expected in the third quarter. Gross domestic product expanded at a 2 percent annual rate, according to the Commerce Department, easily topping expectations for a 1.9 percent growth rate. Growth improved from 1.3 percent pace in the second quarter.
European markets trading mostly higher: European markets are trading higher on Friday with the German DAX (INDEXDB:DAX) up 0.4 percent at 7229.87, the FTSE 100 (INDEXFTSE:UKX) was flat at 5802.41 and the CAC 40 (INDEXEURO:PX1) added 0.6 percent to 3431.05. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.5 percent higher.
Asian markets end lower: Asian markets closed lower on Friday with the HANG SENG INDEX (INDEXHANGSENG:HIS) down 1.2 percent on the day, but flat on the week at 21,545.6, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) slipped 1.7 percent on Friday and 2.9 percent this week. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) lost 1.4 percent to 8,933.06. The S&P/ASX 200 (INDEXASX:XJO) index fell 0.8 percent on Friday. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index ended down 0.7 percent.
Company News Update
• Comcast Corporation (NASDAQ:CMCSA) reported third-quarter earnings excluding items of 46 cents per share, in line with estimates. Revenue rose to $16.54 billion from $14.34 billion a year ago, topping estimates of $16.05 billion.
• Rockwell Collins, Inc. (NYSE:COL) posted fourth quarter earnings excluding items of $1.32 a share, on revenue of $1.27 billion. Analysts were looking for earnings of $1.13 a share on revenue of $1.33 billion.
• Coventry Health Care, Inc. (NYSE:CVH) said third-quarter net income dipped to $105 million, or 78 cents per share, from $122 million, or 83 cents per share, in the year ago period. Operating revenue increased to $3.46 billion from $2.98 billion, a year earlier. Analysts had forecast earnings of 73 cents on revenue of $3.5 billion.
• Insurance brokerage Aon PLC (NYSE:AON) said third quarter earnings from continuing operations rose to 95 cents a share from 69 cents a share. Revenue gained 0.5 percent to $2.74 billion. Analysts had projected earnings from continuing operations of 89 cents a share on $2.79 billion in revenue.
• Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) won an auction for a 47,000-loan portfolio held by Residential Capital LLC with a $1.5 billion bid, ResCap said yesterday.
• Legg Mason, Inc. (NYSE:LM) said second-quarter adjusted profit increased to 75 cents a share from 64 cents a share in the year-ago period. Revenue declined to $640.3 million from $670 million. Analysts had expected the financial services firm to earn 53 cents a share on revenue of $635.7 million
• The Goodyear Tire & Rubber Company (NYSE:GT), the largest U.S. tiremaker, reported third quarter adjusted profit of 53 cents a share that trailed the average analysts’ estimate of 59 cents a share. Sales fell 13 percent to $5.26 billion, missing estimates of $5.87 billion.
• Auto components company Dana Holding Corporation (NYSE:DAN) reported third quarter earnings excluding one-time items of 37 cents a share, on revenue of $1.72 billion that trailed estimates of earnings of 45 cents a share on revenue of $1.82 billion. The company lowered its full-year earnings and revenue outlook.
• Cerner Corporation (NASDAQ:CERN) posted a 25 percent jump in third quarter profit to $98.9 million, or 56 cents a share, from $78.8 million, or 45 cents a share, in the year-ago period. The hospital-information technology vendor raised the lower end of its full-year earnings range.
• Consumer-goods company Newell Rubbermaid Inc. (NYSE:NWL) said third quarter earnings excluding certain items rose to 47 cents a share from 45 cents a share. Sales came in at $1.54 billion. Analysts had forecast earnings of 44 cents a share on revenue of $1.54 billion. The company raised its quarterly dividend by 50 percent to 15 cents a share from 10 cents a share.
• Specialty truck maker Oshkosh Corporation (NYSE:OSK) said third quarter profit from continuing operations increased to $77.6 million, or 85 cents a share, from $40.3 million, or 44 cents per share, in the year-ago quarter. Sales dipped 2.3 percent to $2.06 billion.
• Lear Corporation (NYSE:LEA) reported third quarter earnings excluding items of $1.29 a share, 9 cents above the average analysts’ estimate. Sales gained 2.3 percent to $3.54 billion, also topping estimates of $3.47 billion.
• LifePoint Hospitals, Inc. (NASDAQ:LPNT) posted third quarter profit of $19.2 million, or 39 cents a share, down from $38.8 million, or 77 cents, in the same period last year. Revenue increased 11 percent to $820.2 million. Analysts had expected the rural hospital operator to report earnings of 76 cents on revenue of $815 million.
• Coal company Peabody Energy Corporation (NYSE:BTU) expects to resume talks with the Mongolian government in early 2013 over acquiring a stake in a block in the Tavan Tolgoi deposit in the remote South Gobi desert, Reuters reported.
• Starbucks Corporation (NASDAQ:SBUX) said its joint venture with the Tata group has opened two more outlets in India. The coffee retailer opened its first cafe in the country last Friday.
• Dairy giant Dean Foods Company (NYSE:DF)’s Morningstar unit has attracted takeover interest from diversified food processor Michael Foods and Mexico’s Grupo Lala, in a deal that could fetch upto $1.5 billion range, Reuters reported.
• Stephen Schwarzman, chairman of private equity giant The Blackstone Group L.P. (NYSE:BX) said the firm is planning to increase its real estate investments in the Asia-Pacific region after raising more than $13 billion for a property fund, according to a Bloomberg report.
• Industrial machinery maker Gardner Denver, Inc. (NYSE:GDI) said it is exploring a potential sale or merger of the company, according to a Reuters report.
• Carbonite Inc. (NASDAQ:CARB) posted third quarter adjusted loss of 7 cents a share that easily topped analysts’ expectations for a loss of 18 cents a share. Revenue came in at $21.57 million, up from $15.93 million, a year earlier, also beating the average analysts’ estimate of $21.42 million.
• XPO Logistics Inc (NYSE:XPO) has acquired the freight brokerage division of Ozburn-Hessey Logistics for $50 million in cash, according to a Reuters report. Ozburn-Hessey Logistics is owned by private equity firm Welsh Carson.
• NetSuite Inc. (NYSE:N) reported a third-quarter adjusted profit of 8 cents a share, 2 cents above Street expectations. Revenue increased to $79.79 million, from $60.96 million, a year earlier, topping estimates of $78.04 million.
• Chip equipment company KLA-Tencor Corporation (NASDAQ:KLAC) reported first quarter earnings excluding items of 84 cents per shares on revenue of $721 million. Analysts were expecting earnings of 89 cents per share on revenue of $740 million.
• Internet infrastructure company Verisign, Inc. (NASDAQ:VRSN) reported third quarter earnings of 50 cents per share, a penny above Street estimates. Revenue for the period stood at $224 million roughly in line with forecasts.
• Caterpillar Inc. (NYSE:CAT) has been removed from the “Conviction Buy” list at Goldman Sachs.
• Home builder PulteGroup, Inc. (NYSE:PHM) has been upgraded to “outperform” from “sector perform” by analysts at RBC Capital Markets.
• Ratings agency Standard & Poor’s downgraded the credit ratings of several French banks including BNP Paribas SA (EPA:BNP), and changed the outlook to negative for 10 other banks, including Societe Generale SA (EPA:GLE) and Credit Agricole SA (EPA:ACA).
• Norwegian oil giant Statoil ASA(NYSE:STO) reported third-quarter operating earnings that missed estimates and lowered its production guidance for 2013 due to a major asset divestment.
• The world’s top platinum producer Anglo American plc (LON:AAL) gained 3.2 percent after Chief Executive Cynthia Carroll stepped down on Friday. Shareholders had called for her ouster for months over the miner’s continued dependence on troubled South Africa.
• French advertising company Publicis Groupe SA (EPA:PUB) is down 1 percent after reporting third-quarter revenue that trailed estimates. The group said companies were forced to cut advertising budgets sharply after the summer amid the global slowdown.
• Novo Nordisk A/S (NYSE:NVO) (CPH:NOVO-B) fell 3 percent after the US Food and Drug Administration said they will discuss cardiovascular risks related to its ultra long-acting insulin degludec.
• ARM Holdings plc ( (NASDAQ:ARMH) (LON:ARM) was among the top decliners in London trading after Apple Inc. (NASDAQ:AAPL)’s profit forecast missed analyst estimates. ARM’s chip designs power Apple iPhones and iPads.
• Mobile equipment maker Ericsson (NASDAQ:ERIC) (STO:ERIC-A) (STO:ERIC-B) slid 5 percent after its third-quarter earnings fell 43 percent as wireless operators delayed spending. The company also outlined more cost cuts to protect itself from tough economic conditions and slowing orders.
• London-listed miner African Barrick Gold PLC (LON:ABG) reported a drop in third quarter pretax profit and revenue, and lowered its full year production guidance.
• South Korean electronics giant Samsung Electronics Co., Ltd. (KRX:005930) reported record quarterly profit, largely driven by strong sales of its Galaxy smart phones that more than offset lower a slump in its memory chip business.
• Australian investment bank Macquarie Group Limited (ASX:MQG) reported an 18.4 percent rise in first-half net profit on increased earnings from its trading and funds businesses, and said full-year profit is likely to top the eight-year low recorded in the previous financial year.
• Japanese camera and printer maker Canon Inc. (NYSE:CAJ) (TYO:7751) fell 3.2 percent in Tokyo after reporting weaker-than-expected quarterly profit and cutting its full-year earnings outlook, amid a drop in Chinese sales, where consumers began shunning Japanese products over a territorial spat.
• Sharp Corporation (TYO:6753) jumped 3.8 percent after the Asahi newspaper said the struggling electronics maker was considering financial tie-ups with U.S. tech companies such as Hewlett-Packard Company (NYSE:HPQ), Intel Corporation (NASDAQ:INTC), Microsoft Corporation (NASDAQ:MSFT), Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL).
• Japanese retail giant Aeon Co., Ltd. (TYO:8267) soared in early trade after the Nikkei business daily said the company is set to acquire Carrefour SA (EPA:CA)’s Malaysian business for slightly more than 20 billion yen ($250 million).
• Maanshan Iron & Steel Company Limited (HKG:0323) (SHA:600808) tumbled 6.4 percent in Hong Kong after reporting a wider than expected loss in the three months ended September, as steel prices dropped in July and August.
• Robotics firm Fanuc Corp (TYO:6954) ended 3.1 percent lower after reporting a decline in profit and revenue for the fiscal first half.
Economic Calendar for Friday, October 26, 2012:
08:30 A.M. ET: Gross Domestic Product Annualized (Q3)
08:30 A.M. ET: Gross Domestic Purchases Price Index (Q3)
09:55 A.M. ET: Reuters/Michigan Consumer Sentiment Index (October)