Market Levels
- US: Dow: 13203.60 (-0.51%), S&P 500: 1413.17 (-0.35%), NASDAQ: 3067.26 (-0.29%)
- Europe: CAC: 3513.28 (0.93%), DAX: 7089.32 (0.78%), FTSE: 5857.52 (0.57%).
- Asia-Pacific: Australia: 4383.40 (0.44%), China: 2118.27 (0.53%), Hong Kong: 20100.09 (-0.02%), India: 5421.00 (1.02%), Japan: 9156.92 (-0.16%).
- Metals: Gold: 1642.90 (1.23%), Silver: 29.43 (2.92%), Copper: 3.45 (2.43%)
- Energy: Crude Oil: 96.68 (0.74%), Natural Gas: 2.78 (-0.04%)
- Commodities: Corn: 8.38 (1.82%), Soya Bean: 17.32 (2.91%), Wheat: 9.22 (2.13%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2472 (-1.01%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5787 (-0.47%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 79.2650 (-0.28%)
- 10 year US Treasury: 1.798% (-0.007)
Market and Economy News Update
U.S. markets end lower: U.S. markets closed lower on Tuesday with technology stocks leading the decline, as investors took profits following the recent rally that saw the S&P 500 (INDEXSP:.INX) briefly rise above its highest closing level in four years. The Dow Jones Industrial Average (INDEXDJX:.DJI) fell 68.06 points, or 0.51 percent, to end at 13,203.58. The S&P 500 (INDEXSP:.INX) declined 4.96 points, or 0.35 percent, to finish at 1,413.17, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) erased 8.95 points, or 0.29 percent, to close at 3,067.26.
Oil prices gain: Oil prices rose on Tuesday to their highest level since mid May amid investor hopes that the European Central Bank will take steps to contain the region’s debt crisis. Crude oil for September delivery jumped 0.7 percent, to settle at $96.68 a barrel on the New York Mercantile Exchange. Brent oil for October settlement added 1 percent to $114.81 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Dell Inc. (NASDAQ:DELL) reported second-quarter earnings excluding items of 50 cents per share that beat the average analysts’ estimate of earnings excluding items of 45 cents a share. Revenue for the quarter declined 8 percent to $14.48 billion, trailing estimates of $14.64 billion. Dell Inc. (NASDAQ:DELL) projected full-year earnings that fell short of Street expectations.
- Bookstore chain Barnes & Noble, Inc. (NYSE:BKS) said first quarter net loss narrowed to $41 million, or 78 cents per share, from $56.6 million, or 99 cents a share, in the year-ago quarter. Revenue rose 2.5 percent to $1.5 billion. Analysts had projected a loss of 98 cents a share, on $1.49 billion in revenue. Barnes & Noble, Inc. (NYSE:BKS) posted a second straight quarterly sales decline of its Nook e-reader.
- Specialty retailer The Wet Seal, Inc. (NASDAQ:WTSLA) reported second quarter loss of $12.4 million, or 14 cents a share, compared with a year-ago profit of $2.2 million, or 2 cents a share. Quarterly sales declined 9.1 percent to $135.3 million, while same-store sales dropped 11.1 percent.
- Williams-Sonoma, Inc. (NYSE:WSM) said second-quarter profit rose 10 percent to $43.4 million, or 43 cents per share, from $39.3 million, or 37 cents per share, in the year-ago quarter. Revenue increased 7 percent to $874.3 million. Analysts had projected profit of 41 cents per share, on revenue of $864.4 million. The company raised its full-year outlook.
- Intuit Inc. (NASDAQ:INTU) reported fourth quarter earnings excluding one-time items of 3 cents a shares, on sales of $651 million, trailing analysts’ estimates for 6 cents a share on revenue of $653 million. The software company projected lower than expected full-year outlook.
- Furniture manufacturer La-Z-Boy Incorporated (NYSE:LZB) reported first quarter earnings of $4.4 million, or 8 cents a share, in line with estimates, on revenue of $302 million that beat the consensus estimate of $291 million.
- Internet company IAC/InterActiveCorp (NASDAQ:IACI) has made an offer in excess of $300 million to buy the About.com website from The New York Times Company (NYSE:NYT), Reuters reported.
- Semiconductor company Analog Devices, Inc. (NASDAQ:ADI) reported fiscal third quarter profit of $169.8 million, or 56 cents a share, down 23 percent from $219.9 million, or 71 cents a share, a year earlier. Revenue declined 10 percent to $683 million. Analysts were expecting earnings of 56 cents a share, on revenue of $692.06 million.
- Tobacco company Lorillard Inc. (NYSE:LO) announced a $500 million share repurchase program.
- Financial services company Principal Financial Group Inc (NYSE:PFG) raised its quarterly dividend by 17 percent to 21 cents per share from 18 cents per share.
- Pfizer Inc. (NYSE:PFE) closed 0.9 percent lower after the U.S. Food and Drug Administration extended by three months its review of the company’s rheumatoid-arthritis drug tofacitinib.
- Lions Gate Entertainment Corp. (USA) (NYSE:LGF) said DVD and Blu-ray sales of its box-office hit “The Hunger Games” touched the 3.8 million units mark, during its first weekend of on-demand sales.
- Expedia Inc (NASDAQ:EXPE), Marriott International, Inc. (NYSE:MAR), Hilton Worldwide Inc and a number of other large hotel retailers and operators were accused in a federal lawsuit of conspiring to fix prices.
- Specialty metals and plastics distributor AM Castle and Co (NYSE:CAS) surged the most in more than three years after an investor group, led by Tom Gores’ private-investment firm, Platinum Equity LLC, and Chicago-based metals distributor, Ryerson Inc., bought a 6.1 percent stake in the company.
- Diversified manufacturer Raven Industries, Inc. (NASDAQ:RAVN) said second quarter profit fell to $11.55 million or 32 cents per share from $12.46 million or 34 cents per share a year earlier. Sales increased 13 percent to $101.67 million from $90.34 million in the year-ago period.
- Cabinet maker American Woodmark Corporation (NASDAQ:AMWD) ended 4.1 percent higher after reporting fiscal first-quarter adjusted earnings of 7 cents per share, on revenue of $148.3 million that was well ahead of Street expectations of a loss of 5 cents per share on $138.3 million in revenue.
Hedge Fund News Update
- Hedge funds pose little risk to the stability of the financial system, according to a survey by Britain’s financial regulator, the Financial Services Authority
- London-based Adelante Asset Management has doubled its holding in a basket of Greek bonds, hoping that progress in talks between the Greek government and international lenders will turn the tide in favor of bondholders, Reuters reported.
- Eric Rosen, the co-head of fixed-income, currencies and commodities for the Americas, at UBS AG (USA) (NYSE:UBS), will leave the bank to start a hedge fund, Bloomberg News reported.
- Investor demands to exit hedge funds rose to their second-highest level this year in August, hedge fund administrator SS&C GlobeOp’s forward redemption indicator showed. The indicator jumped to 3.34 percent in August, from 2.18 percent in July.
- Moody’s Investors Service has cut Man Group Plc (LON:EMG)’s credit rating to just above junk, after the world’s biggest publicly traded hedge fund’s assets under management fell by almost a third over the past year.
- New York-based hedge fund LibreMax Capital is up 10.12 percent this year, with July recording gains of 2.71 percent, Reuters reported.
Brokerage Upgrades and Downgrades on Tuesday, August 21, 2012
- Enerplus Corp (USA) (NYSE:ERF) was upgraded to “outperform” from “market perform” by analysts at Raymond James.
- Invacare Corporation (NYSE:IVC) was lifted to “buy” from “neutral” by analysts at CL King.
- Jefferies Group, Inc. (NYSE:JEF) was raised to “buy” from “neutral” by analysts at Rochdale Securities.
- Knight Transportation (NYSE:KNX) was upgraded to “buy” from “hold” by analysts at Stifel Nicolaus with a target price of $18.
- Netflix, Inc. (NASDAQ:NFLX) was lifted to “average” from “below average” by analysts at Caris & Co. with a target price of $59.
- Rex Energy Corporation (NASDAQ:REXX) was raised to “strong buy” from an “add” rating by analysts at Capital One.
- The Gap Inc. (NYSE:GPS) was upgraded to “buy” from “hold” by analysts at Argus with a target price of $42.
- Urban Outfitters, Inc. (NASDAQ:URBN) was lifted to an “outperform” rating from a “market perform” rating by analysts at William Blair.
- Washington Real Estate Investment Trust (NYSE:WRE) was raised to “market perform” from “underperform” by analysts at Wells Fargo & Co.
- Coventry Health Care, Inc. (NYSE:CVH) was upgraded to “neutral” from “underperform” by analysts at Wedbush with a target price of $42.
- Auxilium Pharmaceuticals, Inc. (NASDAQ:AUXL) was downgraded to “underweight” from “equal weight” by analysts at Morgan Stanley with a target price of $16.
- CIBER, Inc. (NYSE:CBR) was lowered to “neutral” from “buy” by analysts at Roth Capital with a target price of $3.50.
- Diamond Offshore Drilling, Inc. (NYSE:DO) was cut to “neutral” from “buy” by analysts at Guggenheim with a target price of $77.
- Edison International (NYSE:EIX) was downgraded to “hold” from “buy” by analysts at Argus.
- Fossil, Inc. (NASDAQ:FOSL) was lowered to “hold” from “overweight” by analysts at ISI Group.
- Groupon Inc (NASDAQ:GRPN) was cut to “underweight” from “equal weight” by analysts at Barclays Capital with a target price of $4.
- Granite Construction Inc. (NYSE:GVA) was downgraded to “neutral” from “buy” by analysts at DA Davidson with a target price of $30.
- Sothebys (NYSE:BID) was lowered to “sell” from “hold” by analysts at Williams Capital with a target price of $23.
- TAL International Group, Inc. (NYSE:TAL) was cut to “neutral” from “buy” by analysts at Nomura Securities.
- Triangle Capital Corporation (NYSE:TCAP) was downgraded to “neutral” from “buy” by analysts at Sterne Agee with a target price of $25.
- Warner Chilcott Plc (NASDAQ:WCRX) was lowered to “underweight” from “equal weight” by analysts at Morgan Stanley.
