Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Friday include: Dell Inc. (NASDAQ:DELL), NVIDIA Corporation (NASDAQ:NVDA), The Gap Inc. (NYSE:GPS), Bank of America Corp (NYSE:BAC), KeyCorp (NYSE:KEY), Priceline.com Inc (NASDAQ:PCLN), Carlyle Group LP (NASDAQ:CG), Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), Pain Therapeutics, Inc. (NASDAQ:PTIE), Ubiquiti Networks Inc (NASDAQ:UBNT), Novartis AG (ADR) (NYSE:NVS) and magicJack VocalTec Ltd (NASDAQ:CALL).
In August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More
• US: Dow Futures: 15061.00 (0.11%), S&P 500 Futures: 1625.30 (0.04%), NASDAQ Futures: 2962.50 (0.15%)
• Europe: CAC: 3945.61 (0.43%), DAX: 8291.78 (0.35%), FTSE: 6611.48 (0.28%)
• Asia-Pacific: Australia: 5206.10 (0.15%), China: 2246.83 (0.62%), Hong Kong: 23321.22 (0.47%), Japan: 14607.54 (2.85%).
• Metals: Gold: 1429.10 (-2.69%), Silver: 23.20 (-2.95%), Copper: 3.34 (0.00%)
• Energy: Crude Oil: 94.51 (-1.95%), Natural Gas: 3.98 (-0.03%)
• Commodities: Corn: 6.46 (2.13%), Soya Bean: 14.15 (1.19%), Wheat: 7.18 (2.84%)
• Currency: EUR/USD: 1.3006 (-0.28%), GBP/USD: 1.5402 (-0.30%), USD/JPY: 101.6100 (1.01%)
• 10 year US Treasury: 1.858% (0.047)
Market and Economic News Update
U.S. stock-index futures gain: U.S. stock-index futures are pointing to a higher open on Friday, with the major averages well on track for their third straight week of gains. In economic news, the U.S. Treasury will report its April deficit numbers at 2 P.M. March deficit stood at $107 billion. Friday will be a relatively quire day on the earnings front.
European markets rise: European markets gave up gains made earlier in session after data showed Italy’s industrial output declined for the second straight month. The FTSE 100 (INDEXFTSE:UKX) added 0.3 percent to 6611.48 points. The DAX (INDEXDB:DAX) was 0.4 percent higher at 8291.78, while the CAC 40 (INDEXEURO:PX1) is up 0.4 percent. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) rose 0.2 percent
Asian markets end higher: Asian stocks closed higher on Friday, after the Japanese yen weakened further. The yen weakened past the key 100-mark against the dollar for the first time in four years. The NIKKEI 225 (INDEXNIKKEI:NI225) rallied as much as 3 percent to trade at its highest levels since January 2008. The S&P/ASX 200 (INDEXASX:XJO) index closed at fresh five-year highs, helped by a rally in resource stocks. The HANG SENG INDEX (INDEXHANGSENG:HSI) closed 0.5 percent higher in a choppy session of trade, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) rose 0.6 percent.
Stocks in News
Dell Inc. (NASDAQ:DELL)
Activist investor Carl Icahn has teamed up with Southeastern Asset Management to bid for Dell Inc. (NASDAQ:DELL), seeking to challenge the $24.4 billion management-led buyout proposed by founder Michael Dell and private equity firm Silver Lake Partners. Icahn and Southeastern Asset Management are offering to pay shareholders about $12 a share either in cash or in additional shares. Dell Inc. (NASDAQ:DELL) shares rose 0.5 percent to $13.39 in pre-market trade.
NVIDIA Corporation (NASDAQ:NVDA)
NVIDIA Corporation (NASDAQ:NVDA) reported better than expected first quarter results as strong demand for high-end gaming machines more than offset a slump in the personal-computer market. Earnings excluding one-time items came in at 13 cents a share, 3 cents above the average analysts’ estimate, on sales of $955 million that also beat Street expectations of $941 million. The chipmaker provided current-quarter revenue outlook that fell short of forecasts. Shares were up in pre-market trading.
The Gap Inc. (NYSE:GPS)
The Gap Inc. (NYSE:GPS) expects to post first quarter earnings excluding one-time items of between 64 cents a share and 65 cents a share, against current projections for 56 cents a share. Meanwhile, the clothing retailer reported total sales of $3.73 billion, edging past expectations for $3.67 billion. Same-store sales for the five weeks ended May 3 rose 7 percent, beating the 5.5 percent consensus view. Shares jumped in early trading.
Bank of America Corp (NYSE:BAC), KeyCorp (NYSE:KEY)
Bank of America Corp (NYSE:BAC) has agreed to sell a commercial mortgage servicing rights portfolio to a unit of KeyCorp (NYSE:KEY) for an undisclosed sum, according to a Reuters report. The portfolio, valued at around $110 billion, will more than double KeyBank Real Estate Capital’s servicing portfolio to $205 billion. Bank of America has been trying to offload servicing assets, and sold more than $300 billion of rights earlier this year.
Priceline.com Inc (NASDAQ:PCLN)
Priceline.com Inc (NASDAQ:PCLN) said first quarter profit jumped 34 percent amid strong growth in international bookings. Excluding items, earnings rose to $5.76 a share from $4.28 a share. Revenue gained 26 percent to $1.3 billion. Analysts were expecting earnings of $5.27 a share, on revenue of $1.28 billion. In addition, the travel website forecast weaker-than-expected current quarter profit, sending shares lower in pre-open session.
Carlyle Group LP (NASDAQ:CG)
Private equity firm Carlyle Group LP (NASDAQ:CG) has tabled an initial bid for Rio Tinto plc (ADR) (NYSE:RIO) (ASX:RIO)’s 80 percent stake in the Northparkes copper mine in Australia, the Wall Street Journal reported on Friday. The Anglo-Australian miner is looking to sell the mine as part of a plan to cut costs by about $5 billion. Analysts expect Rio Tinto to raise as much as $1 billion from the stake sale. Northparkes is 20 percent owned by Japan’s Sumitomo Metal Mining Co., Ltd. (TYO:5713), and produced about 8 percent of Rio’s total copper output.
Allscripts Healthcare Solutions Inc (NASDAQ:MDRX)
Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) posted a first quarter loss, hurt by a drop in revenue and a slew of one-time charges. Excluding one-time items, the healthcare information technology company made an adjusted profit of 9 cents per share. Revenue declined 5 percent to $347.1 million. Analysts were expected an adjusted profit of 14 cents per share on $366.8 million in revenue. Shares tumbled in pre-market trading.
Pain Therapeutics, Inc. (NASDAQ:PTIE)
Pain Therapeutics, Inc. (NASDAQ:PTIE) plunged in trade after Pfizer Inc, its marketing partner for painkiller Remoxy, said it is evaluating its continued participation in the process. In a letter to Pain Therapeutics Chief Executive Remi Barbier, Pfizer said it is yet to decide on continuing to seek regulatory approval for the drug. The U.S. Food and Drug Administration had rejected the application for Remoxy, stating that the drug’s release performance was inconsistent in tests.
Ubiquiti Networks Inc (NASDAQ:UBNT)
Ubiquiti Networks Inc (NASDAQ:UBNT) reported first quarter earnings excluding one-time items of 24 cents a share, on sales of $83 million, edging past estimates of 22 cents a share on sales of $80 million. The wireless products maker provided better than expected current-quarter outlook, sending shares higher in early morning trade.
Novartis AG (ADR) (NYSE:NVS)
Novartis AG (ADR) (NYSE:NVS) said the U.S. Food and Drug Administration has approved its drug Ilaris to treat a rare form of childhood arthritis. Systemic juvenile idiopathic arthritis can affect children as young as 2 years old, and Ilaris is the only approved treatment specifically for the condition, the Swiss drug maker said in a statement. Shares gained more than a percent in pre-open session.
magicJack VocalTec Ltd (NASDAQ:CALL)
VoIP provider magicJack VocalTec Ltd (NASDAQ:CALL) announced that Jose Gordo has been appointed Chief Financial Officer. Current CFO Peter Russo will remain with the company as a consultant. Shares declined in early-hours trading.
Economic Calendar for Friday, May 10, 2013:
09:30 A.M. ET: Federal Reserve Chairman Ben Bernanke speaks.
02:00 P.M. ET: Kansas City Fed President Esther George speaks.
02:00 P.M. ET: Monthly Budget Statement (April)