Post Market Update
Every afternoon (and morning) we provide an update on global market levels, company news, economic news, and hedge fund news. Highlights for September 19th 2012 below:
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- US: Dow: 13578.00 (0.10%), S&P 500: 1461.05 (0.12%), NASDAQ: 3182.62 (0.15%)
- Europe: CAC: 3531.82 (0.54%), DAX: 7390.76 (0.58%), FTSE: 5888.48 (0.35%).
- Asia-Pacific: Australia: 4394.70 (-0.18%), China: 2059.54 (-0.92%), Hong Kong: 20601.93 (-0.27%), India: 5600.05 (-0.18%), Japan: 9123.77 (-0.39%).
- Metals: Gold: 1771.70 (0.03%), Silver: 34.59 (-0.37%), Copper: 3.81 (0.71%)
- Energy: Crude Oil: 91.98 (-3.47%), Natural Gas: 2.76 (-0.40%)
- Commodities: Corn: 7.56 (2.23%), Soya Bean: 16.69 (1.80%), Wheat: 8.81 (2.08%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.3049 (-0.03%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6220 (0.13%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.3550 (-0.53%)
- 10 year US Treasury: 1.772% (-0.037)
Market and Economy News Update
U.S. markets end modestly higher: U.S. markets ended with small gains on Wednesday, buoyed by a better-than-expected existing home sales report. The Dow Jones Industrial Average (INDEXDJX:.DJI) gained 13.32 points, or 0.10 percent, to close at 13,577.96. The S&P 500 (INDEXSP:.INX) edged up 1.73 points, or 0.12 percent, to finish at 1,461.05, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) eked out a gain of 4.82 points, or 0.15 percent, to end at 3,182.62.
Oil prices plunge: Oil prices tumbled to a six-week low after a government report showed a massive rise in the country’s crude inventories. U.S. crude inventories rose 8.5 million barrels in the week ended September 14. Analysts were expecting stockpiles to increase by 2.5 million barrels. Crude oil for October delivery fell 3.5 percent, to settle at $91.98 a barrel on the New York Mercantile Exchange. Brent oil for November settlement slid 3.6 percent to $108.05 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Adobe Systems Incorporated (NASDAQ:ADBE) posted third quarter earnings excluding one-time items of 58 cents a share, in line with estimates. Revenue for the quarter came in at 1.08 billion, trailing estimates of $1.10 billion. The computer-software company also handed in weaker-than-expected current-quarter guidance.
- Bed Bath & Beyond Inc. (NASDAQ:BBBY) reported second quarter earnings of 98 cents a share that missed the average analysts’ estimate of $1.02 a share. Revenue increased 12 percent to $2.59 billion, topping Street expectations for $2.56 billion. The domestic merchandise retailer provided current-quarter earnings guidance that was mostly in line with estimates.
- Homebuilders, PulteGroup, Inc. (NYSE:PHM), D.R. Horton, Inc. (NYSE:DHI), KB Home (NYSE:KBH), Lennar Corporation (NYSE:LEN) and The Ryland Group, Inc. (NYSE:RYL), all ended the day with strong gains after sales of existing homes rose in August to a more than two-year high. Existing-home sales increased 7.8 percent in August from a month earlier to a seasonally adjusted annual rate of 4.82 million, the National Association of Realtors said today.
- Verizon Communications Inc. (NYSE:VZ) has reached a three-year contract agreement with the Communications Workers of America and the International Brotherhood of Electrical Workers, ending fifteen months of negotiations over new labor contracts.
- Railroad company Norfolk Southern Corp. (NYSE:NSC) said it expects third quarter earnings to be lower than the year-ago quarter, due to decreased coal and merchandise shipments, as well as lower fuel surcharge revenue.
- Office furniture company Steelcase Inc. (NYSE:SCS) reported second quarter earnings excluding items of 25 cents a share, on revenue of $745 million that beat the average analysts’ estimate of earnings excluding items of 19 cents a share on sales of $728 million. The company provided weaker than expected current-quarter earnings and revenue outlook
- 3M Co (NYSE:MMM) has warned that it is unlikely to achieve its previous long-term revenue growth target of 7 to 8 percent under the current economic scenario.
- Wal-Mart Stores, Inc. (NYSE:WMT) has teamed up with healthcare insurer Humana Inc. (NYSE:HUM)’s HumanaVitality unit to give members a discount on about 1,300 healthy food items at U.S. Walmart stores starting on October 15.
- ·AOL, Inc. (NYSE:AOL) has appointed Karen Dykstra as its new chief financial officer.
- Groupon Inc (NASDAQ:GRPN) ended 14 percent higher after it launched a new mobile payments service in the U.S. that enables businesses to process credit card payments from customers using an iPhone or iPod Touch.
- Restaurant chain Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) gained 5.8 percent after posting fourth quarter profit that nearly doubled. The company reported a profit of $34.7 million, or $1.47 a share, up from $17.5 million, or 75 cents a share, in the year-ago period. Sales for the quarter rose 14.2 percent to $700 million, while same-store sales were up 3.8 percent.
- Taiwanese smart phone maker HTC Corp (TPE:2498) has rolled out two models that run on Microsoft Corporation (NASDAQ:MSFT)’s Windows 8 operating system.
- salesforce.com, inc. (NYSE:CRM) unveiled a new version of its cloud-based sales application with enhanced mobile computing tools.
- Deutsche Telekom AG (ETR:DTE) (FRA:DTE)’s T-Mobile USA Inc., the fourth-largest U.S. wireless carrier, has named John Legere as chief executive officer. Legere will replace interim CEO Jim Alling.
- Chip maker Cypress Semiconductor Corporation (NASDAQ:CY) said it will acquire smaller rival Ramtron International (NASDAQ:RMTR) for $109.8 million in cash, ending its months-long pursuit of the company.
- Sandstorm Gold Ltd. (CVE:SSL) has entered into a deal with Colossus Minerals Inc. (TSE:CSI) to purchase precious metals from the Brazilian Serra Pelada mine.
Hedge Fund News Update
- Subramanyam Venkataraman, the chief risk officer for Highbridge Capital Management’s hedge fund business will leave the firm at the end of the year, according to a Reuters report. Highbridge is a unit of JPMorgan Chase Asset Management.
- New York-based hedge fund Glenview Capital has reportedly increased its stake in Tenet Healthcare Corporation (NYSE:THC) to above 10 percent. As first reported by MarketFolly.
- Beau Taylor’s Taylor Woods fund gained 6.3 percent last month amid a surge in oil and grain prices, according to a Bloomberg report.
- Mutual fund giant Franklin Resources, Inc. (NYSE:BEN) will buy a majority stake in fund of hedge funds manager, K2 Associates for $183 million.
Brokerage Upgrades and Downgrades on Wednesday, September 19, 2012
- AstraZeneca plc (ADR) (NYSE:AZN) was raised to “neutral” from “underperform” by analysts at Exane BNP Paribas.
- Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) was lifted to “buy” from “neutral” by analysts at Bank of America.
- Chiquita Brands International, Inc. (NYSE:CQB) was upgraded to “buy” from “hold” by analysts at BB&T Capital Markets.
- Fresh Del Monte Produce Inc. (NYSE:FDP) was raised to “buy” from “hold” by analysts at BB&T Capital Markets.
- Golar LNG Partners LP (NASDAQ:GMLP) was lifted to “outperform” from “market perform” by analysts at Wells Fargo & Co.
- Marathon Oil Corporation (NYSE:MRO) was upgraded to “outperform” from “neutral” by analysts at Credit Suisse with a target price of $37.
- NetEase, Inc (ADR) (NASDAQ:NTES) was raised to “neutral” from “reduce” by analysts at Nomura.
- The Progressive Corporation (NYSE:PGR) was lifted to “equal weight” from “underweight” by analysts at Evercore Partners.
- St. Jude Medical, Inc. (NYSE:STJ) was upgraded to “outperform” from “market perform” by analysts at Wells Fargo & Co.
- Vera Bradley, Inc. (NASDAQ:VRA) was raised to “overweight” from “neutral” by analysts at JPMorgan Chase with a target price of $30.
- Webster Financial Corporation (NYSE:WBS) was lifted to “strong buy” from “outperform” by analysts at Raymond James with a target price of $28.
- Chicago Bridge & Iron Company N.V. (NYSE:CBI) was cut to “neutral” from “outperform” by analysts at Macquarie with a target price of $45.
- CapitalSource, Inc. (NYSE:CSE) was lowered to “neutral” from “buy” by analysts at Sterne Agee.
- Hasbro, Inc. (NASDAQ:HAS) was downgraded to “hold” from “buy” by analysts at Needham & Company.
- Huntington Bancshares Incorporated (NASDAQ:HBAN) was cut to “market perform” from “outperform” by analysts at Sanford C. Bernstein with a target price of $8.
- Idenix Pharmaceuticals, Inc. (NASDAQ:IDIX) was downgraded to “neutral” from “buy” by analysts at Bank of America.
- Lam Research Corporation (NASDAQ:LRCX) was lowered to “neutral” from “buy” by analysts at Citigroup with a target price of $34.
- Mattel, Inc. (NASDAQ:MAT) was cut by analysts at Needham & Company from a “buy” rating to a “hold.”
- Northern Trust Corporation (NASDAQ:NTRS) was downgraded to “underperform” from “neutral” by analysts at Credit Suisse with a target price of $40.
- PriceSmart, Inc. (NASDAQ:PSMT) was lowered to “neutral” from “buy” by analysts at Janney Capital with a target price of $75.
- SunTrust Banks, Inc. (NYSE:STI) was cut to “market perform” from “outperform” by analysts at Sanford C. Bernstein with a target price of $31.
- The Bon-Ton Stores, Inc. (NASDAQ:BONT) was downgraded to “underperform” from “neutral” by analysts at Credit Suisse with a target price of $7.
- Waste Management, Inc. (NYSE:WM) was lowered to “underweight” from “neutral” by analysts at JPMorgan Chase with a target price of $34.