Every afternoon we provide an update on global market levels, company news, economic news, and hedge fund news.
Post Market Update
Market Levels
- US: Dow: 12741.80 (-0.20%), S&P 500: 1344.78 (0.14%), NASDAQ: 2895.33 (0.78%)
- Europe: CAC: 3066.19 (-0.70%), DAX: 6248.20 (0.30%), FTSE: 5491.09 (0.22%).
- Asia-Pacific: Australia: 4136.90 (1.96%), China: 2316.05 (0.40%), Hong Kong: 19427.81 (1.00%), India: 5064.25 (-1.46%), Japan: 8721.02 (1.74%).
- Metals: Gold: 1627.00 (-0.07%), Silver: 28.67 (-0.24%), Copper: 3.40 (0.35%)
- Energy: Crude Oil: 83.27 (-0.90%), Natural Gas: 2.64 (6.81%)
- Commodities: Corn: 5.34 (5.53%), Soya Bean: 13.39 (1.92%), Wheat: 6.72 (3.26%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2574 (0.50%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5671 (0.25%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 79.1050 (0.58%)
- 10 year US Treasury: 1.574% (-0.002)
Market and Economy News Update
U.S. markets end mixed: U.S. markets ended mixed on Monday as a surge in Spanish bond yields overshadowed results of the Greek elections. The Dow Jones Industrial Average (INDEXDJX:.DJI) slipped 0.20 percent to finish at 12,741.82. The S&P 500 (INDEXSP:.INX) eked out a gain of 0.14 percent to end at 1,344.78, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) gained 0.78 percent to close at 2,895.33.
U.S. home builder confidence highest in five years: Confidence among homebuilders climbed in June to the highest level in five-years, indicating a brighter outlook for residential construction. The NAHB/Wells Fargo Housing Market index rose to 29 in June, the highest since May 2007, from a downwardly revised 28 in May. Economists were expecting the gauge to remain unchanged.
Oil prices down: Oil prices fell on Monday for the first time in three days amid a deteriorating euro zone debt crisis that threatens to derail global growth, and hence reduce demand for crude. Crude oil for July delivery fell 0.9 percent, to settle at $83.27 a barrel on the New York Mercantile Exchange. Brent oil for August settlement dropped 1.6 percent to $96.05 a barrel on the London-based ICE Futures Europe exchange.
Company News Update
- Technology giant Oracle Corporation (NASDAQ:ORCL) posted fourth quarter earnings of 82 cents a share, topping analysts’ expectations for 78 cents a share. Revenue came in line with Street estimtes at $10.9 billion.
- Business information services company IHS Inc. (NYSE:IHS) posted second quarter earnings excluding one time items of 97 cents a share, on revenue of $387 million, beating expectations for 94 cents a share on sales of $384 million
- Bank of America Corp (NYSE:BAC) is close to a deal to sell its overseas wealth unit to Swiss private banking giant Julius Baer for about $2 billion, CNBC reported.
- Homebuilders including like Lennar Corporation (NYSE:LEN), D.R. Horton, Inc. (NYSE:DHI), KB Homes (NYSE:KBH), PulteGroup, Inc. (NYSE:PHM) and Toll Brothers Inc (NYSE:TOL) ended the day significantly higher after the NAHB/Wells Fargo Housing Market index rose to its highest level in five years.
- Digital communications company Interdigital, Inc. (NASDAQ:IDCC) agreed to sell around 1700 wireless technology patents to Intel for about $375 million.
- The Food and Drug Administration said the toxic side effects of Onyx Pharmaceutical, Inc. (NASDAQ:ONXX)’s experimental cancer drug carfilzomib may outweigh its benefits.
- Lockheed Martin Corporation (NYSE:LMT) has secured a $1.91 billion, seven-year Defense Department contract to manage a communications network known as the Global Information Grid.
- Footwear and accessories retailer DSW Inc. (NYSE:DSW) said that fiscal second-quarter earnings would come in at 60 to 64 cents a share, far below Wall Street’s expectations. The company however maintained it’s a full-year profit outlook.
- Fiber and woven goods maker Buckeye Technologies Inc. (NYSE:BKI) had to temporarily shut down a plant in Florida after a machine failure.
- Ohio-based AK Steel Holding Corporation (NYSE:AKS) forecast lower than expected second quarter profits, and did not provide guidance for the remainder of the year, citing economic uncertainty.
- Melrose plc (LON:MRO) is in talks to acquire German utility-meter maker Elster Group SE ADR (NYSE:ELT) in a deal worth $2.3 billion. U.S.-listed shares of Elster soared 18 percent.
- Infinity Pharmaceuticals Inc. (NASDAQ:INFI) has discontinued the Phase II trials of saridegib, an investigational drug for bone and cartilage cancers, saying results have been disappointing.
- Women’s apparel retailer Body Central Corp (NASDAQ:BODY) has cut its second-quarter and fiscal year revenue and earnings forecasts amid sluggish same-store sales.
Hedge Fund News Update
- Nelson Peltz’s Trian Fund Management LP has disclosed a 5.1 percent stake in M&A investment banking specialist, Lazard Ltd (NYSE:LAZ).
- Hedge funds and other money managers raised their bullish commodity bets as growing hopes of a stimulus for the U.S. economy drove gold to its longest rally since August last year. Data from the Commodity Futures Trading Commission showed that money managers raised their combined net long positions across 24 U.S. commodity markets by $2.1 billion in the week ended June 12.
- The GlobeOp Hedge Fund Performance Index rose 0.43 percent in May, despite the sharp sell-off in equity markets last month when worries about the euro zone debt crisis resurfaced.
- Man Group Plc (LON:EMG), the world’s largest listed hedge fund manager, lost its second key executive in a week, after finance director Kevin Hayes stepped down on Monday. He will be replaced by former Goldman Sachs Group, Inc. (NYSE:GS) banker, Jonathan Sorrell.
- Sutesh Sharma, Citigroup Inc. (NYSE:C)’s former proprietary trading head, will launch his London-based Portman Square Capital hedge fund with around $500 million this autumn, the Financial Times reported.
- JPMorgan Chase & Co. (NYSE:JPM)’s head of global equity proprietary trading, Deepak Gulati, is in talks with investors, as he considers leaving the bank to start a hedge fund, Bloomberg News reported.
- New York-based Woodbine Capital Advisors recorded a gain of 3.7 percent last month, and is up 1.6 percent year to date, with the majority of gains coming from currency trades.
- David Tepper’s Appaloosa Management, which had invested in both US Airways Group, Inc. (NYSE:LCC) and Delta Air Lines, Inc. (NYSE:DAL) in the first quarter, is sitting on solid gains.
Brokerage Upgrades and Downgrades on Monday, June 18, 2012
- Artesian Resources Corporation (NASDAQ:ARTNA) was upgraded to “buy” from “long-term buy” at Hilliard Lyons with a target price of $23.
- EOG Resources, Inc. (NYSE:EOG) was raised to “buy” from “neutral” at UBS AG with a target price of $120.
- Oasis Petroleum Inc. (NYSE:OAS) was upgraded to “buy” from “neutral” at UBS AG with a target price of $34.
- Pioneer Natural Resources (NYSE:PXD) was raised to “buy” from “neutral” at UBS AG with a target price of $118.
- Celgene Corporation (NASDAQ:CELG) was cut to “sector perform” from “outperform” at RBC Capital Mkts with a target price of $72.
- HollyFrontier Corp (NYSE:HFC) was downgraded to “market perform” from “market outperform” at Howard Weil with a target price of $34.
- Huntsman Corporation (NYSE:HUN) was downgraded to “hold” from “buy” at KeyBanc Capital Markets.
- Tractor Supply Company (NASDAQ:TSCO) was cut to “hold” from “buy” at KeyBanc Capital Markets.
