Tag Archives: Drew Trachtenberg

Market Minute: An August Rally for Stocks? Exxon Misses on Earnings

By DailyFinance Staff

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Wednesday, July 31, 2013. U.S. stocks erased an earlier rally after the Federal Reserve refrained from indicating when it will reduce the pace of stimulus and data showed the economy grew more than projected in the second quarter. Photographer: Scott Eells/Bloomberg via Getty Images

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Stocks are set to rally this morning, but history offers a warning to investors. That and more is what’s in market news Thursday

The Dow industrials (^DJI) lost 21 points Wednesday, and the S&P 500 (^GPSC) was virtually flat, but the Nasdaq (^IXIC) gained nearly 10 points.

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All three major averages posted solid gains for all of July. For the Dow, it was the seventh increase in eight months. So what can we expect from August? Well, since 1987, it’s been the worst month of the year for the market.

In earnings news, Exxon Mobil’s (XOM) quarterly earnings appear to have badly missed Wall Street expectations.

Procter & Gamble’s (PG) net fell by nearly half from a year ago, but still edged past expectations.

Animated filmmaker DreamWorks Animation (DWA), biotech company Affymetrix (AFFX), and the online review company Yelp (YELP) are all set to rally on better-than-expected earnings news.

But Whole Foods Market (WFM) and Marriott International (MAR) both issue disappointing results.

Ford (F), General Motors (GM), Toyota (TM) and other carmakers report sales for last month. Industry watcher Edmunds.com forecasts a double-digit gain from a year ago.

Shares of J.C. Penney (JCP) tumbled Wednesday on a report that a leading commercial lender has stopped backing deliveries to the chain. But the stock is set to rebound Thursday after J.C. Penney said those reports are false.

The dispute between J.C. Penney and Macy’s (M) over the rights to sell Martha Stewart (MSO) branded products could come to an end today. The two department stores are set to deliver closing arguments in their long-running case, and the judge could issue an immediate ruling.

The International Trade Commission is expected to rule today on Apple’s (AAPL) patent-infringement case against Korean rival Samsung. The companies have filed suit and countersuit against each other, with both sides claiming some victories in court.

And Starbucks (SBUX) has enlisted Google (GOOG) to make the Internet connection at its coffee shops up to 10 times faster than it is now.

Produced by Drew Trachtenberg.

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Market Minute: Merck, Pfizer Beat Earnings Forecasts; Hospital Giants Merge

By DailyFinance Staff

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Drug giants Pfizer and Merck grab the earnings spotlight. Those stocks and more are what’s in business news Tuesday.

The Dow industrials (^DJI) fell 36 points Monday, the S&P 500 (^GPSC) lost 6 and the Nasdaq (^IXIC) fell 14.

Pfizer’s (PFE) operating profit and revenue edged lower, but still beat expectations. The company has been coping for several years with the loss of patent rights on the top-selling cholesterol drug Lipitor, and sales of Lipitor tumbled 55 percent in the latest period. Pfizer also says it will reorganize, a move some analysts say could lead to another spinoff.

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Rival drug-maker Merck (MRK) reports net edged past Wall Street expectations, but revenue was a bit light. Sales of several key drugs fell as it too struggles with the expiration of patents.

After the closing bell we’ll hear from biotech leader Amgen (AMGN).

Community Health Systems (CYH) has agreed to buy Health Management Associates (HMA) for $3.9 billion. Both companies operate for-profit hospitals, mostly in smaller cities and rural areas.

Herbalife’s (HLF) net easily beat expectations. The nutrition supplement company has been at the center of a high-profile battle between some big-time investors during the past year, with one hedge fund manager claiming the company is run like a Ponzi scheme, and he’s been betting against its stock. So far, he’s lost more than $200 million on that bet. On the other hand, Carl Icahn has made a cool quarter of a billion by backing the company.

AIG (AIG) is getting out of the retail banking business. The company says it will return deposits because of limits placed on insurance companies under the Dodd-Frank law. Allstate Group (ALL), MetLife (MET) and Hartford Financial Services (HIG) have already backed away from retail banking.

JPMorgan Chase (JPM) reportedly has agreed to pay $400 million to $500 million to settle federal charges that it manipulated the power markets in California and other states in 2010 and 2011.

On the economic front, the Federal Reserve begins a two-day policy meeting. Everyone will be looking for clues about when and how it will taper down on its massive bond-buying program.

Produced by Drew Trachtenberg.


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Market Minute: Starbucks Milks Yogurt Deal; Apple Earnings Shine

By DailyFinance Staff

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Starbucks plans a big new product line, and a case of when bad is good. Those and more are what’s making business news Wednesday.

The Dow industrials (^DJI) rose 22 points Tuesday, enough for another all-time high. But the S&P 500 (^GPSC) lost 3 points, and the Nasdaq (^IXIC) fell 21.

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Starbucks (SBUX) continues to expand beyond coffee. It’s joining forces with Dannon to make Greek yogurt parfaits. The fast-growing yogurt business in the U.S. is worth more than $6 billion, and analysts say there’s still plenty of room to go. Last year, Starbucks expanded its tea business by acquiring the Teavana chain.

Apple’s (AAPL) quarterly earnings fell 22 percent from a year ago, but that wasn’t as bad as most analysts had forecast. Revenue edged higher as it shipped more than 31 million iPhones. That was well above expectations and the stock is likely to climb this morning.

AT&T’s (T) net edged slightly lower, but on the positive it reported the number of new customers signing long-term service contracts nearly doubled from a year ago.

Ford (F) reported better-than-expected second quarter earnings in part due to strong domestic demand for its F-Series pickups. The automaker earned $1.2 billion in the April-June period, propelled by a $2.3 billion profit in North America. Ford shares rose 3 percent in premarket trading.

Among other big names reporting this morning: Boeing (BA), Caterpillar (CAT), Delta Air Lines (DAL) and USAirways (LCC).

Other stocks likely to make big moves to the upside following earnings include video gamemaker Electronic Arts (EA) and software company VMWare (VMW); like to trade to the downside, chipmaker Broadcom (BRCM) and restaurant chain Panera Bread (PNRA).

The big report after the bell today comes from Facebook (FB). The focus will be on how much the company grew its revenue from mobile platforms.

The New York Times (NYT) reports officials in Louisiana are preparing to file suit against Exxon Mobil (XOM), BP (BP) and other oil producers, accusing them of damaging the coastal wetlands that help protect the region from hurricanes.

A new report shows that Google (GOOG) accounts for nearly a quarter of all the Internet traffic in North America. That’s more than Facebook and Twitter combined.

And Carl Icahn, one of those big time investors who can move stock prices, is offering a tease about what he’ll do next. CNBC reports that Icahn plans to give clues about his next big investment on Twitter. His handle is @Carl_C_Icahn.

Produced by Drew Trachtenberg.
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Market Minute: Netflix Growth Sours Investors; Taco Bell Nixes Kids Meals

By DailyFinance Staff

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Netflix and Apple are the stocks you want to watch today. Those and more are what’s in the news Tuesday on Wall Street.

The Dow industrials (^DJI) edged just slightly higher Monday, the S&P 500 (^GPSC) added 3 points — to mark its 23rd record high of the year — and the Nasdaq (^IXIC) rose 12.

Melinda Sue Gordon, Netflix/APActor Kevin Spacey in a scene from the Netflix series “House of Cards.”

Netflix says its quarterly profit soared nearly fivefold from a year ago, even better than Wall Street had expected. But subscriber growth to the movie streaming service was a bit off target. Last week Netflix received 14 Emmy nominations for its original series, including best drama for “House of Cards.” Now investors want to see if it can turn those nominations into new subscribers. Netflix (NFLX) shares have more than tripled in price during the past year, but they’re set to slide Tuesday morning.

Dow components DuPont (DD), United Technologies (UTX) and Travelers Cos. (TRV) are also out with quarterly numbers this morning. In addition to its earnings, DuPont says it may sell its performance chemicals business, which is the company’s second largest revenue producer.

After the closing bell, we’ll hear from Apple (AAPL) and AT&T (T). Apple’s net is likely to drop from a year ago as it’s been quite a while since the company has introduced an important new product.

On the merger front, CapitalSource (CSE) has agreed to be acquired by Pacwest Bancorp (PACW) in a deal valued at $2.3 billion dollars.

Taco Bell is taking the toy out of the taco. The Yum Brands (YUM) unit says its will stop selling kids meals and toys, probably early next year. It wants to focus on attracting young adults. The company says kids meals account for less than 1 percent of its overall sales.

Finally, how much money do you need to have to be rich? A survey by UBS (UBS) found $5 million is the magic number for most people, with $1 million of that in cash. Half of the respondents also said being rich means having “no financial constraints.”

Produced by Drew Trachtenberg.

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Market Minute: Twinkie Return Could Cost Rival Snack Maker Flowers

By DailyFinance Staff

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Boeing is set to bounce back, and we look at the Twinkie effect on the market.

The major averages all rallied last week, with the Dow Industrials and the S&P 500 ending at record highs. The Nasdaq soared 3.5 percent on the week; it has gained ground in 12 of 13 sessions.

Boeing (BA) could recoup some of Friday’s big loss, as an investigation shows the fire aboard a 787 Dreamliner in Great Britain was not related to the lithium ion battery that caused Boeing to ground the fleet earlier this year. However, there’s still uncertainty about what did cause this latest mishap. The focus right now is on the lightweight carbon fiber skin of the plane.

Twinkie fans are thrilled about the return of the snack food to store shelves today, but not everyone is celebrating. Flowers Foods (FLO), which makes a Twinkie rival — Tastykakes — could suffer. Tastykake sales have jumped almost 20 percent over a year ago, as desperate Twinkie fans sought an alternative.

Citigroup (C) kicks off a huge week for corporate earnings, posting better-than-expected profit and sales. Analysts are especially interested to hear what the company has to say about the economic outlook in Mexico and other emerging markets.

The three entertainment giants that own Hulu have decided not to sell the television streaming site after all. Comcast (CMCSA), Walt Disney (DIS) and 21st Century Fox (NWS) will pump an extra $750 million dollars into Hulu. Among the companies that had been interested in buying it: Time Warner Cable (TWC), Yahoo (YHOO), DirecTV (DTV) and Kohlberg, Kravis Roberts.

And we’re seeing more consolidation in the telecom industry. AT&T (T) has agreed to acquire Leap Wireless (LEAP) for $1.2 billion dollars. The per share price represents an 88 percent premium over Leap’s closing price. Leap provides prepaid wireless service under the Cricket brand. The deal also gives AT&T more wireless spectrum and access to the low-cost wireless market.

-Produced by Drew Trachtenberg

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Market Minute: SeaWorld Goes Public, Valued at $2.5 Billion

By DailyFinance Staff

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One of the biggest IPOs this year could make a big splash today. Theme park operator SeaWorld was priced at the high end of expectations, $27 a share. That values the company at $2.5 dollars.

Two out of three ain’t bad: That’s the scorecard from the three tech giants that reported quarterly results late yesterday.
Microsoft’s (MSFT) profit rose by a better-than-expected 19 percent to more than $6. Sales of server software and Xbox video games were strong, but newly booked revenue from Windows was essentially flat.

Google’s (GOOG) net rose 16 percent, also topping expectations. Revenue growth in its core advertising business was also strong.

But IBM (IBM) came up short of Street expectations and revenue was hurt by sluggish demand from corporate tech customers. It the first time IBM has missed the target since 2005. Separately, Big Blue is in talks to sell its huge server business to China-based Lenovo.

General Electric’s (GE) net rose 16 percent, in line with expectations. Revenue was flat, but a bit stronger than expected. GE is often considered a bellwether for the broader economy.

Blackstone Group (BX) has withdrawn its offer for Dell (DELL) after discovering the computer maker’s business is deteriorating faster than previously thought. That leaves only investor Carl Icahn as a possible rival to the bid from a group led by company founder Michael Dell to take the company private.

It was seven months ago today that Apple (AAPL) shares hit their all-time high of $702; they closed yesterday at $392. That’s a drop of 44 percent.

And Netflix (NFLX) is hoping to build on the success of its “House of Card” series with a second original program. Today it begins streaming the entire first season of a gothic horror series, “Hemlock Grove.”

-Produced by Drew Trachtenberg

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Market Minute: Investors Rush Away From Gold; Earnings Parade

By DailyFinance Staff

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Stocks suffered their biggest loss of 2013 yesterday, and gold plunged to its lowest level in two years. The Dow Industrials tumbled 265 points, the S&P 500 slid 36 and the Nasdaq dropped 78 points.

We’re watching mining and gold stocks again today. Freeport McMoRan (FCX) and Cliffs Natural Resources (CLF) could recover some of yesterday’s losses; both plunged 8 percent.

Carnival Cruise Lines (CCL) has reversed course and now says it will reimburse the U.S. for the cost of Coast Guard aid to help its Triumph and Splendor ships, both of which were disabled by fires.

Meanwhile, Royal Caribbean (RCL) is expected to unveil details of the latest ship in its fleet. The Quantum of the Seas will carry 4,100 passengers when it sets sail next year. Royal Caribbean is hoping to benefit from the series of mishaps involving Carnival.

Leading today’s earnings parade: Coca-Cola (KO). Its net edged past expectations, and volume shipments rose a bit more than expected.

Goldman Sachs’s (GS) earnings rose seven percent, also topping expectations. After the close today we’ll get results from tech giants Intel (INTC) and Yahoo (YHOO).

Shares of HCA (HCA) are likely to slide. The healthcare operator warns that sales will fall short of expectations. It says growth in hospital admissions has slowed.

JCPenney (JCP) tapped its credit line for $850 million dollars, giving it enough cash for day-to-day operations as its new/old CEO tries to reverse the steep slide in sales. And Bloomberg reports the company may borrow against its real estate holdings to raise more cash. Analysts say these moves suggest that Penney sales are off to a bad start this year.

And Plains All-American (PAA) is building a pipeline to bring 200,000 barrels a day of oil from the Permian Basin in West Texas to the refineries near Houston. The company will invest up to $375 million in the project.

-Produced by Drew Trachtenberg

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Market Minute: Dish Network Bids $25.5 Billion for Sprint Nextel

By DailyFinance Staff

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Two big takeover deals are in the works, and plunging gold prices pressure stocks.

All three of the major averages rallied by more than two percent last week, with the Dow and the S&P setting record highs along the way.

This could be a big merger Monday: Dish Network (DISH) is bidding to acquire Sprint Nextel (S). The offer – termed an informal offer and valued at more than $25 billion dollars, including debt – is intended to derail Sprint’s deal with the Japanese company Softbank.

And Thermo Fisher Scientific (TMO) has agreed to buy Life Technologies (LIFE) for more than $13 billion dollars. Both companies make laboratory equipment. Life Technologies‘ stock has jumped 25 percent since it put itself up for sale in January. At least two other groups had been considering bids.

Earnings season kicks into high gear this week. Citigroup (C) topped expectations on both earnings and revenue.
Freeport McMoRan (FCX) and Newmont Mining (NEM) are both under pressure as the price of gold tumbles more than 6 percent this morning. That’s partly because of signs of slowing growth in China.

In an effort to settle a long running anti-trust suit in Europe, Google (GOOG) has reportedly offered to change the way it operates its search engine. News reports say Google is prepared to make a greater distinction between its internet searches and those of competitors.

General Motors (GM) and Ford (F) are working together to develop more fuel efficient nine- and 10-speed transmissions for their cars. Some rivals, including Chrysler, are already there.

J.C. Penney (JCP) on Friday won a round in its court battle with Macy’s (M). The judge said Penney could temporarily sell housewares designed by Martha Stewart, while the trial continues this week.

Dell’s biggest institutional investor, Southeastern Asset Management, is stepping up its opposition to Michael Dell‘s effort to take the computer maker private. The investment firm has hired a proxy solicitation group and may contact shareholders directly.

-Produced by Drew Trachtenberg

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Market Minute: Yum Brands' China Sales Catch a Case of Bird Flu

By DailyFinance Staff

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KFC falls prey to the bird flu, and the PC may become a dinosaur.

Record highs continue to pile up on Wall Street. The Dow Industrials rallied 128 points yesterday and the S&P 500 jumped 19, both closing at record levels. The Nasdaq soared 39 points.

The bird flu outbreak in China is taking a big bite out KFC‘s sales there. They fell 16 percent last week, and the downtrend for the unit of Yum Brands (YUM) is continuing this month. More than half of Yum’s total sales come from China, where it has above 5,000 KFC outlets.

Worldwide shipments of personal computers tumbled by nearly 14 percent in the first quarter. Market researcher IDC says that’s the biggest drop since it began tracking the numbers in 1994. Hewlett-Packard (HPQ) remains the number one PC maker, despite a 24 percent slide in the quarter. Dell’s (DELL) shipment’s fell by 11 percent, and Apple’s (AAPL) dropped more than seven percent. The decline signals consumer’s growing preference for smartphones and tablets. IDC also notes that Microsoft’s (MSFT) rollout of Windows 8 has done nothing to slow the decline in PC sales, and may have even made it worse.

Separately, the Wall Street Journal reports Microsoft is developing a new line of tablets, including a 7-inch version of the Surface. Goldman Sachs (GS) lowered its rating on Microsoft to neutral.

General Motors (GM) says it plans to invest more than $5 billion dollars in its ailing European brands, Opel and Vauxhall. The company’s European operations lost $1.8 billion last year, so it was either invest more to rebuild the brand, or retreat.

Costco (COST) reports a key measure of sales rose 4 percent last month. That’s a bit below expectations… a rare miss for the warehouse club retailer.

And shares of Integra LifeSciences (IART) are set to tumble after the company recalled some of its surgical products. It also issued a disappointing earnings forecast.

-Produced by Drew Trachtenberg

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Midday Report: Family Dollar Reports Miserly Q1 Earnings

By DailyFinance Staff

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Family Dollar (FDO) says its quarterly earnings rose by less than three percent, falling shy of Wall Street expectations.

But the company had plenty of excuses for the shortfall: It blames the economy, the weather, and the delay in tax refunds earlier this year.

And Family Dollar doesn’t see things getting a whole lot better. It revised its earnings forecast for 2013 significantly lower for the second time this year.

But not everything is bleak. Sales rose by 18 percent in the latest quarter, meeting expectations, as the company continued to add stores at a rapid pace. It opened 500 new locations last year and is expected to add that many again this year. It now has more than 7,000 stores. And the sale trend improved in February as customers began to receive their tax refund checks.

But analysts say there are bigger trends working against Family Dollar and its main rivals – Dollar General (DG) and Dollar Tree (DLTR). The biggest factor is that Walmart (WMT) has stepped up its competition to win the dollars of hard-pressed shoppers by lowering prices.

Family Dollar is trying to make itself a one-stop destination by adding cigarettes, Pepsi (PEP) products, gift cards and magazines. This strategy may draw more customers into its stores, but these are generally very low margin products compared to apparel and other items – and that has pressured profitability.

That’s in contrast to what happened in recent years, during and right after the recession. Sales and earnings soared as low-income shoppers flocked to dollar stores.

Family Dollar has also underperformed on Wall Street. So far this year, its stock is down seven percent. By comparison, both Dollar General and Dollar Tree have gained 15 percent this year.

It was just over a year ago that Family Dollar rejected a $7 billion buyout offer from Trian Group, the firm run by activist investor Nelson Peltz.

-Produced by Drew Trachtenberg

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Midday Report: Blackstone-Owned SeaWorld Readies IPO

By DailyFinance Staff

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SeaWorld looks to make a big splash on Wall Street: The theme park operator is going public, probably launching its initial public offering this month.

It will offer 20 million shares, expecting to price them between $24-27 apiece.

The company operates 11 theme parks. There are the three SeaWorlds, located in Orlando, San Diego and San Antonio, and it also owns Busch Gardens, Sesame Place and several other water-themed parks.

Its kingdom includes 67,000 animals, the most famous of which are the Shamu killer whales.

The company is owned by Blackstone Group (BX), the world’s largest private-equity firm. It bought SeaWorld in 2009 from Anheuser-Busch (BUD) for $2.7 billion.

The initial pricing numbers value SeaWorld at about $5 billion dollars.

Blackstone opted for the IPO instead of selling SeaWorld. Both Apollo Global (APO) and Onex Corp. (OCX) had reportedly offered to buy the company.

And the theme park business has been profitable. SeaWorld’s earnings surged to more than $77 million dollars last year, up from $19 million in 2011. Revenue rose 7 percent to $1.4 billion.

The IPO is expected to raise about $500 million. Half will go to Blackstone, half to SeaWorld. It will use the money to reduce debt. Blackstone will continue to be the majority shareholder.

And theme park stocks have been doing quite well. Six Flags (SIX) has soared 60 percent over the past year and Cedar Fair (FUN) has gained 41 percent.

Blackstone launched a successful IPO last month: Pinnacle Foods (PF). It’s the maker of Duncan Hines, Birds Eye and other well-known brands. Its stock has jumped 20 percent since it was launched late last month.

But there are risks. SeaWorld notes in its SEC filing that economic conditions can hurt attendance, which declined in 2009 and 2010 due to the global economic crisis.

In addition, SeaWorld also noted the risks of featuring animals. In February 2010, a trainer was killed by a whale during a performance.

But SeaWorld is a popular and profitable brand that will probably draw a fair amount of interest when it debuts here at the NYSE.

-Produced by Drew Trachtenberg

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Market Minute: J.C. Penney Set to Jump on Ouster of CEO Ron Johnson

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J.C. Penney does an about-face, and Microsoft sets a deadline for millions of Windows users.

The Dow Industrials rose 48 points yesterday, the S&P 500 added 9 and the Nasdaq gained 18. The market has been on a see-saw ride recently. The S&P has not had back-to-back gains or losses for the past 13 sessions, the longest such streak on record.

J.C. Penney’s (JCP) controversial CEO Ron Johnson has been ousted after less than two years on the job. The company’s revenue fell sharply last year after he eliminated sale prices and coupons, only to backtrack later on. Myron Ullman, the former CEO, will return as Johnson’s replacement. Investors are concerned the flip-flop could lead to another expensive makeover. JC Penney shares lost half their value during Johnson’s tenure.

If you own a computer running on Windows XP system, Microsoft will in effect dis-own you a year from now. The company says it will stop supporting XP, meaning it will not provide security patches and system updates.

Alcoa kicked off the earnings season last night with a better than expected increase in quarterly profit. But revenue for the industrial bellwether was a bit shy of estimates. The company also said China‘s production cutbacks are reducing the worldwide over-supply of aluminum.

Google has been giving away its Android system to mobile phone makers, in exchange for prominent placement of the company’s apps for Google Maps, YouTube and others. Now a group of rivals – including Microsoft, Oracle and Nokia – are asking European regulators to charge Google with antitrust violations.

Ford says its Focus brand was the top-selling passenger car in the world last year. It sold more than 1-million of the cars in 2012 – a quarter of them in China.

And Citigroup may file suit against the Nasdaq. According to the Wall Street Journal, the bank wants to recoup losses suffered in the botched launch of Facebook stock last May.

-Produced by Drew Trachtenberg

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Midday Report: Market Faces Expectations of Weak First Quarter Earnings

By DailyFinance Staff

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Stephen Morton/Bloomberg via Getty ImagesAlcoa Inc. employee Stephen Tally makes a line on the rod of a carbon anode before it is set into place at the company’s Mt. Holly production plant in Goose Creek, South Carolina.

Earnings season could be the next big hurdle for stock market investors.

As usual, Alcoa (AA) kicks off the earnings season after today’s closing bell. Even though its ticker symbol is AA, this is not done alphabetically.

For many years, Alcoa was viewed as a trendsetter, not just because it’s first, but because it was seen as a proxy for the broader economy. That’s not as true now; Alcoa has become more of a commodities play. And with aluminum prices slumping, the company is expected to post flat to slightly lower earnings.

Later this week we’ll hear from banking giants JPMorgan Chase (JPM) and Wells Fargo (WFC). Wells, a leading provider of home mortgages, could provide a look at whether the housing industry is still on the upswing.

And next week, the earnings calendar fills up. We’ll get a slew of quarterly reports. Overall, first quarter earnings are expected to be relatively weak, after strong gains the past few years.

That’s part of the problem: Those big gains we saw in 2011 and 2012 came off of the Great Recession, so the comparisons were very easy. That’s no longer the case. Thomson Reuters projects earnings to rise by just 1.6 percent in the first quarter, and other forecasts are even weaker. Bloomberg’s survey of analysts points to a 1.8 percent decline in profits at S&P 500 companies. That would be first decrease since 2009.

Some of the weakness is due to international issues. Analysts point to the recession in Europe and the economic slowdown in China. A number of multinationals have already lowered their earnings forecasts, citing problems overseas. Ford (F), FedEx (FDX) and Caterpillar (CAT) have all cut their outlooks. Cat could report back-to-back declines for the first time since 2009.

But there’s some optimism in other sectors. Consumer products companies such as Procter & Gamble (PG) and Clorox (CLX) have remained positive about their results, and analysts say retailers also should do well.

And results for the first quarter could be the low spot for the year. Most analysts expect earnings growth to improve as the year rolls on. Right now, the expectation for the fourth quarter is for earnings growth of about 13 percent.

-Produced by Drew Trachtenberg

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Market Minute: ExxonMobil Sued Over Arkansas Pipeline Spill

By DailyFinance Staff

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The Dow Industrials edged slightly lower last week, while the S&P 500 lost one percent and the Nasdaq dropped two.

Two Arkansas residents have filed a lawsuit against ExxonMobil (XOM). They’re seeking $5 million in damages, claiming a pipeline spill has caused a permanent drop in their property values.

General Electric (GE) is expanding its oilfield services business, agreeing to buy Lufkin Industries for $3.3 billion. Lufkin makes equipment used in oil and gas production.

Anheuser-Busch (BUD) says the Justice Department has accepted the company’s revised concessions, and will no longer block the company’s effort to acquire Mexican beer maker Modelo. The deal is valued at more than $20 billion. As part of the accord with antitrust regulators, Anhueser-Busch will sell more of Modelo’s assets to Constellation Brands.

UPS (UPS) plans to appeal a ruling by European regulators, who are blocking the company’s planned acquisition of Dutch rival TNT Express. That deal is valued at $6.7 billion.

You’ve probably never heard of CPI Corp. (CPI), but you’ve no doubt seen its work. For years the company provided the portraits sold at Sears (SHLD), Wal-Mart (WMT) and Babbies ‘R’ Us. But CPI abruptly closed it business on Friday. It had been a mainstay at Sears since 1959.

Earnings season begins after the market closes this afternoon. As usual, Alcoa (AA) will be the first major company to report. Analysts expect both sales and earnings to edge lower compared to a year ago because of slumping aluminum prices. Overall, Thomson Reuters expects corporate earnings to increase by only 1.5 percent for the quarter, while other analysts say that may be too optimistic.

And J.C. Penney (JCP) and Macy’s (M) are back in court today in their fight over the right to sell Martha Stewart‘s line of home goods. The court battle was suspended for a month to allow for mediation, but that has not produced a settlement.

-Produced by Drew Trachtenberg

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Market Minute: J.C. Penney Opens In-Store Boutiques

By DailyFinance Staff

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J.C. Penney (JCP) today opens its first store-within-the-store boutiques. They’ll offer home goods from designers such as Michael Graves, Jonathan Adler and Sir Terence Conran. The boutiques featuring Martha Stewart are is still in limbo pending a court challenge from Macy’s (M). Penney is banking on this new strategy to help it turn around after posting a big sales decline last year.

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A federal appeals court has ruled that Johnson & Johnson (JNJ) did not infringe on the patent for a heart stent. The court threw out a $593 million dollar judgment against the company. The ruling could help Abbott Labs (ABT), which faces a lawsuit for violating the same patent.

Hewlett-Packard (HPQ) Chairman Raymond Lane and two directors are resigning their posts. This comes in the wake of HP‘s disastrous acquisition of Autonomy in 2011. That led to an $8.8 billion writedown last year. The company has had three CEOs and two chairmen in the past seven years, and the search for a new chairman is starting now.

Boeing (BA) may make a key test flight of its grounded 787 Dreamliner as soon as today. If all goes well, the company hopes to win FAA certification to move ahead with plans to upgrade the batteries throughout the fleet, and resume commercial flights within the next month or so.

Chevron (CVX) says it won’t be able to restart a major crude oil facility in California until at least June. The company has completed repairs to the plant after an explosion there last August, but it says regulatory approvals will delay the re-opening.

And F5 Networks (FFIV) is set to tumble after warning that earnings and revenue will fall short of expectations in the current quarter. The company sells information technology and services.

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Midday Report: Signs of a Spring Correction for the Stock Market

By DailyFinance Staff

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Is the stock market headed for another spring swoon?

It’s happened in each of the past three years, and a growing number of market watchers say it’s likely to happen again in 2013.

The warnings are piling up that market is due for a pullback, probably in the range of five to 10 percent.

Here’s the recent history: last year the Dow fell 8.8 percent from its early spring high. In 2011, it dropped more than 7 percent, and in 2010 it slid nearly 13 percent from April 26th through the end of the second quarter.

But the Dow ended higher in each of those three years, including a 19 percent gain in 2010. This year, the Dow is coming off of a huge 11 percent gain in the first quarter.

So what are the warning signs we’re seeing?

Let’s start with the fact that the stock market has become front page news as it’s soared to record highs, which has prompted mom-and-pop investors like you and me to jump back into the market.

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A lot of pros think that’s a bad sign, at least in the near term. We’re considered a contrary indicator. In general, we tend to buy after the market has already jumped, because we don’t want to miss out on the rally. The problem is, the typical investor has terrible timing.

There are a number of other concerns as well.

For technical investors, there’s worry that the Dow Transportation Index has been selling off in recent days. Many pros consider it to be a leading indicator that’s now flashing a warning sign.

There’s also concern that the upcoming earnings season will be even more sluggish than expected. Thomson Reuters expects earnings growth of just 1.5 percent, and companies that disappoint could get punished.

And the wild card for the market is the increasingly bellicose rhetoric coming from North Korea. Any real hostilities could take a toll on markets around the world.

Now all of this comes with a big grain of salt: Most forecasters still expect the market to end the year with solid gains.

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Market Minute: Time Warner Enters Streaming Movie Business

By DailyFinance Staff

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There’s a big new player in online movies, and Best Buy is expanding its connection with a major phone maker.

Time Warner (TWX) is jumping into the business of streaming online video, focusing on its vast library of classic movie and TV shows. A subscription will cost $10 a month – about two dollars more than Netflix (NFLX) charges. Still, Time Warner could present a challenge to Netflix, Amazon (AMZN) and others.

Rival entertainment giant Walt Disney (DIS) is closing down its video game-making unit, LucasArts. Disney paid $4 billion in December to buy the parent company, Lucasfilm.

Best Buy (BBY) is planning to set aside prime space in its stores dedicated to mobile phones, cameras and other products made by Samsung. Samsung, which will soon roll out its Galaxy S4 phone, does not have its own retail stores. Best Buy is also planning to sell the Apple (AAPL) iPad3 at a 30 percent discount.

Facebook (FB) is expected to unveil a deal with smartphone maker HTC that will feature the social network site as a possible homepage on the Android phones. The aim is to prompt users to spend more time on Facebook, which will result in higher ad revenue.

The chief product officer at Lululemon (LULU) is taking the fall for the see-through yoga pants fiasco that forced the company to issue a major recall: Sheree Waterson is leaving the company. As you may recall, the material became too sheer when the wearer bent over. The recall is expected to cost the company as much as $67 million dollars.

And the KFC unit of Yum Brands (YUM) will soon allow customers to pre-pay for food by using a mobile wallet when they call in an order. The program will start in the U.K. and soon expand to the U.S. McDonald’s (MCD) and Starbucks (SBUX) already offer similar programs.

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Midday Report: Facebook Said To Team With HTC on Mobile Content

By DailyFinance Staff

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Facebook (FB), Google (GOOG) and other non-hardware firms are making big plays in mobile devices.

Facebook has set a big media event for tomorrow, and the speculation – or the leaks – focuses on making the social
networking site your mobile home page.

But it’s probably not going to be a Facebook phone, one of the off-and-on rumors that have circulated for several years.

Instead, Facebook is expected to announce that it’s teaming up with smartphone maker HTC. They’ll use Android-based operating systems to feature Facebook content.

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For Facebook, it’s all about generating more ads and more revenue, as its users migrate from the PC to mobile devices.

The company said a few months ago that more than 650 million of its one billion daily users access Facebook on their mobile devices.

HTC phones already have a button that allows users to post photos directly to Facebook, but the company’s goal is make access even easier to keep those users engaged for longer periods of time.

Facebook has been somewhat slow to embrace mobile. Last year, CEO Mark Zuckerberg said a Facebook phone would be, in his words, “the wrong strategy.”

The company’s inability to make big money from mobile was one of the reasons Facebook’s stock stumbled so badly after its IPO last May.

But now, the company wants to capture the mobile world.

Reports say the new phone will seamlessly integrate its NewsFeed, messaging, photo uploading and other services.
Google, which makes the Android operating system, is also stepping up its game to dominate mobile: Reports say it will launch a new version of its Nexus 7 tablet. Reuters says the company expects to ship as many as 8 million of the new tablets in the second half of this year.

And Google is likely to price the new model very aggressively to challenge Apple, Amazon (AMZN) and other tablet makers.

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Midday Report: UBS Releases List of 14 Favorite Stocks

By DailyFinance Staff

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Stocks have soared to record levels this year, but one brokerage firm says there are still plenty of profits left to mine.

After the market‘s stellar first-quarter gains, UBS (UBS) is out with a new list of favorite stocks. According to 24/7 Wall Street, UBS names 14 stocks for which it sets target prices at least 25 percent above current levels.

Some are household names like Citigroup (C) and Delta Air Lines (DAL), but there are a number of companies on the list that you may not be familiar with.

There are two energy-related stocks – Halliburton (HAL) and Cobalt International (CIE). Halliburton shares have already jumped 15 percent this year, but the UBS price target sees it gaining another 33 percent.

Robert Nickelsberg/Getty ImagesTwo employees of Halliburton Company moves between large pump trucks at a natural gas well site.

Delta is another one that has soared already this year, up 37 percent. It’s the only transport company to make the list.

There are a couple of others that have also had good runs already this year. Newcastle Investment (NCT), a real estate investment trust, is up 26 percent. And software maker Infoblox (BLOX) has gained 18 percent. It went public a year ago.

UBS also has a pair of drug and bio-pharmaceutical companies on the list. Warner Chilcott (WCRX) may be a bounce-back story. Its shares have lost 40 percent of their value since last May, and it recently warned that earnings this year are likely to fall short of Wall Street estimates. Alexion Pharmaceuticals (ALXN) is another against-the-grain pick. Last week it received a warning letter from the FDA, which said the company has failed to comply with good manufacturing practices.

Along the same line, UBS likes Monster Beverage (MNST), even though the company has been under fire recently because of possible links between its energy drinks and health problems.

Arch Coal (ACI) is the lowest priced stock on the list, trading just above $5 a share. The UBS target is $9. Like other coal companies, Arch has cut production at several mines because of weak demand for coal-based electricity. The stock has tumbled 29 percent so far this year.

Rounding out the list are Whole Foods (WFM), the retailer Ross Stores (ROST), TIBCO Software (TIBX), and Kraton Performance Polymers (KRA).

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Market Minute: HMO Stocks Rise on Medicare Advantage News

By DailyFinance Staff

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The Dow and the S&P 500 retreated yesterday from record highs. The Dow edged lower by five points, the S&P lost seven and the Nasdaq fell 28 points.

Shares of health insurance provider Humana (HUM) jumped yesterday and are set to gain more today. This follows an apparent change of course by Medicare, which is now calling for an increase in reimbursement rates on its Advantage plans. UnitedHealth (UNH), Aetna (AET) and Wellpoint (WLP) are also on the rise.

Another supporter falls off of the Apple (AAPL) bandwagon. Goldman Sachs (GS) dropped Apple from its conviction buy list, and lowered its price target on the stock. But Goldman still expects Apple to hit 575 dollars a share within the next 12 months. It’s now around 429 a share.

A former Anheuser-Busch (BUD) employee claims the company has filed suit against him in order to silence him. The employee charged last week that the company is selling watered-down beer. Anheuser-Busch rejects those allegations.

The major automakers report domestic sales for March, and analysts are looking the recent strong sales trend to continue. Edmunds expects the best annual sales rate in almost six years. Yesterday, General Motors (GM) launched a new front in its battle with Ford over pick-up trucks. GM claims its Sierra and the soon-to-be released 8-cylinder Silverado get better gas mileage than Ford’s top-selling F-150.

Verizon (VZ) and AT&T (T) are reportedly working on a plan to break-up Vodaphone. According to a Financial Times blog, Verizon would acquire the U.S. assets and AT&T would take the overseas assets. The deal would value Vodaphone at 245-billion dollars.

And shares of Nuance Communications (NUAN) are set to rally on word that billionaire investor Carl Icahn has taken a nine percent stake. It’s described as a passive stake, which means he’s not seeking a takeover of the speech recognition firm.

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