Post Market Update
Many well-known hedge fund managers are also philanthropists, and many of them have their own foundations. Seth Klarman of Baupost is one of those with his own foundation, and he invested in a handful of hedge funds through his foundation. This list of Klarman's favorite hedge funds is based on the Klarman Family Foundation's 990 Read More
• US: Dow: 13107.20 (0.03%), S&P 500: 1411.94 (-0.07%), NASDAQ: 2987.95 (0.06%)
• Europe: CAC: 3435.09 (0.69%), DAX: 7231.85 (0.44%), FTSE: 5806.71 (0.03%).
• 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: 1712.00 (-0.06%), Silver: 32.09 (0.04%), Copper: 3.55 (0.23%)
• Energy: Crude Oil: 86.11 (0.07%), Natural Gas: 3.38 (-1.37%)
• Commodities: Corn: 7.37 (-0.57%), Soya Bean: 15.63 (-0.14%), Wheat: 8.63 (-1.03%)
• Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2941 (0.05%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6097 (-0.14%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 79.5900 (-0.90%)
• 10 year US Treasury: 1.747% (-0.076)
Market and Economy News Update
U.S. markets end largely unchanged: U.S. markets closed flat in a lackluster session on Friday but all three indices ended the week lower. The Dow Jones Industrial Average (INDEXDJX:.DJI) rose 3.53 points, or 0.03 percent, to close at 13,107.21. The S&P 500 (INDEXSP:.INX) lost 1.03 points, or 0.07 percent, to end at 1411.94, while the NASDAQComposite (INDEXNASDAQ:.IXIC) eked out a gain of 1.83 points, or 0.06 percent. For the week, the Dow fell 1.77 percent, the S&P 500 dropped 1.48 percent, and the Nasdaq slipped 0.59 percent.
Oil prices edge higher: Crude prices gained for a second session on Friday but ended lower for the week, as prices recovered from an early slide as Hurricane Sandy’s threatened to disrupt East Coast refining operations. Crude oil for December delivery added 0.1 percent, to settle at $86.11 a barrel on the New York Mercantile Exchange. Brent oil for December settlement rose 1 percent to $109.52 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
• Citigroup Inc. (NYSE:C) was fined $2 million by Massachusetts’ top securities regulator for leaking confidential information about Facebook’s initial public offering, prompting the banking giant to fire top Internet analyst Mark Mahaney
• Moody’s Corporation (NYSE:MCO) gained percent after reporting third quarter profit that topped Street expectations. The company raised its full-year outlook and declared a quarterly dividend of 16 cents per share
• Johnson & Johnson (NYSE:JNJ) said that its Ethicon Endo-Surgery division has recalled more than 157,000 surgical stapler devices and accessories due to potential malfunctions that could cause serious adverse health consequences, including death.
• KKR & Co. L.P. (NYSE:KKR) swung to a third-quarter profit from a year-ago loss as the value of its holdings rose. Third-quarter economic net income stood at $509.9 million, compared with a loss of $592.1 million in the year-ago period. Assets under management rose to $66.3 billion as of September 30, up from $58.7 billion a year earlier.
• NuVasive, Inc. (NASDAQ:NUVA) said the U.S. Food and Drug Administration has granted premarket approval to its PCM cervical disc system, which is intended to help spinal patients preserve motion in the cervical spine.
• Advertising firm Interpublic Group of Companies, Inc. (NYSE:IPG) ended 2.5 percent lower after third-quarter earnings tumbled 66 percent amid lower ad spending by customers. Net income fell to was $68.7 million, or 16 cents per share, from $208.1 million, or 40 cents per share, in the same period last year. Revenue declined 3.2 percent to $1.67 billion.
• Medical equipment maker Varian Medical Systems, Inc. (NYSE:VAR) soared 15 percent after reported fourth-quarter profit that topped estimates. Net income came in at $120.2 million, or $1.08 per share, up from $101 million, or 87 cents per share, in the year-ago period. Revenue gained 5 percent to $756 million. Analysts were expecting earnings of $1.03 per share on revenue of $747.1 million.
• Private equity firm Apollo Global Management LLC (NYSE:APO) will buy $100 million worth of potash miner Prospect Global Resources Inc (NASDAQ:PGRX) debt to help it develop an Arizona mine, according to a Reuters report.
• Eastman Chemical Company (NYSE:EMN) gained 12 percent after reporting third-quarter profit of $1.57 per share that topped the average analysts’ estimate of $1.42 a share. The biggest U.S. producer of chemicals from coal also raised its 2012 forecast.
• Debt-laden Spanish hotel chain NH Hoteles SA (MCE:NHH) has received a preliminary offer from KKR & Co. L.P. (NYSE:KKR) to buy bonds that can be converted into shares, according to a Reuters report.
• Arch Coal Inc (NYSE:ACI) surged 11 percent after posting third-quarter results that topped Wall Street expectations. Adjusted income stood at 20 cents per share, 4 cents above the consensus estimate. Revenue fell 9 percent $1.09 billion, also beating expectations for $1.01 billion.
• Standard & Poor’s Ratings Services raised its outlook on Dr Pepper Snapple Group Inc. (NYSE:DPS) to positive from stable.
• Auto parts supplier American Axle & Manufact. Holdings, Inc. (NYSE:AXL) fell 10.4 percent after swinging to a third-quarter loss, hurt by restructuring and debt refinancing costs. American Axle reported earnings excluding items of 7 cents a share that missed the average analysts’ estimate for earnings of 33 cents a share.
• LyondellBasell Industries NV (NYSE:LYB) reported third quarter earnings of $1.46 per share, beating the analysts’ consensus estimate of $1.45 a share. Revenue dropped 10 percent to $11.27 billion, trailing estimates of $11.37 billion. The company announced a special dividend of $2.75 a share.
• Pilgrim’s Pride Corporation (NYSE:PPC) closed 16 percent higher after the chicken processor reported third-quarter profit that topped analysts’ expectations. Pilgrim’s Pride reported a profit of $42.9 million, or 17 cents a share, on revenue of $2.07 billion that beat estimates for a profit of 6 cents a share on revenue of $1.95 billion.
• Cabot Oil & Gas Corporation (NYSE:COG) soared 10 percent after third-quarter adjusted earnings topped Wall Street’s expectations, helped by higher oil production and prices. Revenue increased 13 percent to $296.9 million, in line with estimates.
Hedge Fund News Update
• Specialty truck maker Oshkosh Corporation (NYSE:OSK) said that its board has rejected activist investor Carl Icahn’s $32.50 per share all-cash takeover offer, calling the bid “inadequate.”
• John Paulson’s Paulson & Co., whose flagship fund is down 15 percent as of September 30, has seen a number of investors planning to pull out money before the end of the year, according to a CNBC report.
• Matthew Sidman, a senior portfolio manager at Boston-based Highfields Capital is planning to leave next year to set up his own hedge fund.
• Ohio School Employees Retirement System, Columbus has allocated $35 million to Oxford Asset Management’s relative-value quantitative fund.
• Millennium Capital Partners LP has hired former Barclays PLC (NYSE:BCS) (LON:BARC) trader Ola Rosengren as a portfolio manager, according to a Bloomberg report.
Brokerage Upgrades and Downgrades on Thursday, October 25, 2012
• AllianceBernstein Holding LP (NYSE:AB) was lifted to “equal weight” from “underweight” by analysts at Morgan Stanley.
• American Public Education, Inc. (NASDAQ:APEI) was upgraded to “buy” from “hold” by analysts at Stifel Nicolaus.
• CME Group Inc (NASDAQ:CME) was raised to an “outperform” rating from a “market perform” rating by analysts at Raymond James.
• Dime Community Bancshares, Inc. (NASDAQ:DCOM) was lifted to “outperform” from “underperform” by analysts at Raymond James.
• Essex Property Trust Inc (NYSE:ESS) was upgraded to “buy” from “neutral” by analysts at Bank of America.
• Expeditors International of Washington (NASDAQ:EXPD) was raised to “buy” from “sell” by analysts at Goldman Sachs.
• Expedia Inc (NASDAQ:EXPE) was lifted to “outperform” from “market perform” by analysts at Raymond James.
• Huntington Bancshares Incorporated (NASDAQ:HBAN) was upgraded to “buy” from “neutral” by analysts at Citigroup.
• CarMax, Inc. (NYSE:KMX) was raised to “outperform” from “neutral” by analysts at Credit Suisse.
• Liquidity Services, Inc. (NASDAQ:LQDT) was lifted to “buy” from “neutral” by analysts at Bank of America.
• Marathon Petroleum Corp (NYSE:MPC) was upgraded to “outperform” from “neutral” by analysts at Credit Suisse.
• PACCAR Inc (NASDAQ:PCAR) was raised to “market perform” from “underperform” by analysts at Wells Fargo & Co.
• Phillips 66 (NYSE:PSX) was lifted to “outperform” from “neutral” by analysts at Credit Suisse.
• Rogers Communications Inc. (USA) (NYSE:RCI) was upgraded to “neutral” from “sell” by analysts at Goldman Sachs.
• Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) was raised to “buy” from “neutral” by analysts at DA Davidson.
• Stellarone Corp (NASDAQ:STEL) was lifted to “strong buy” from “outperform” by analysts at Raymond James.
• Varian Medical Systems, Inc. (NYSE:VAR) was upgraded to “buy” from “neutral” by analysts at Lazard.
• Cabelas Inc (NYSE:CAB) was downgraded to “neutral” from “overweight” by analysts at Piper Jaffray.
• Cooper Industries plc (NYSE:CBE) was lowered to “market perform” from “outperform” by analysts at William Blair.
• Constant Contact, Inc. (NASDAQ:CTCT) was cut to “neutral” from “outperform” by analysts at Credit Suisse.
• Dean Foods Company (NYSE:DF) was downgraded to “hold” from “buy” by analysts at Stifel Nicolaus.
• ITT Educational Services, Inc. (NYSE:ESI) was lowered by analysts at Stifel Nicolaus from a “buy” rating to a “hold” rating.
• Firstmerit Corp (NASDAQ:FMER) was cut to “hold” from “buy” by analysts at Stifel Nicolaus.
• Informatica Corporation (NASDAQ:INFA) was downgraded to “market perform” from “outperform” by analysts at Raymond James.
• Maxwell Technologies Inc. (NASDAQ:MXWL) was lowered by analysts at Needham & Company from a “buy” rating to a “hold” rating.
• NuStar Energy L.P. (NYSE:NS) was cut to “underperform” from “outperform” by analysts at Credit Suisse.
• Precision Drilling Corp (NYSE:PDS) was downgraded to “outperform” from “strong buy” by analysts at Raymond James.
• ResMed Inc. (NYSE:RMD) was lowered by analysts at Credit Suisse from an “outperform” rating to a “neutral” rating.
• Spirit AeroSystems Holdings, Inc. (NYSE:SPR) was cut to “neutral” from “outperform” by analysts at Credit Suisse.
• St. Jude Medical, Inc. (NYSE:STJ) was downgraded to “neutral” from “outperform” by analysts at Credit Suisse.
• VistaPrint Limited (NASDAQ:VPRT) was lowered by analysts at Stephens from an “overweight” rating to an “equal weight” rating.
• Washington Banking Company (NASDAQ:WBCO) was cut to “market perform” from “outperform” by analysts at Keefe, Bruyette & Woods.
• Washington Real Estate Investment Trust (NYSE:WRE) was downgraded to “hold” from “buy” by analysts at Stifel Nicolaus.