Ultimate Market Recap: Big Banks Draft Living Wills, Mac Owners’ Suite Spending
Stocks BUZZING Before the Bell: Zynga FAILS to Impress, Bristol-Myers’ Buyback
Zynga Inc. (NASDAQ:ZNGA) shares are edging lower before Wednesday’s opening bell, having closed nearly 5 percent lower during regular trading Tuesday. Investors were unimpressed by the company’s new feature called “Zynga with Friends.” It aims to reduce Zynga’s reliance on Facebook and connect gamers across multiple platforms.
Facebook (NASDAQ:FB) shares continued to rally 3 percent higher on Tuesday, yet are down 2.48 percent in pre-market trading this morning. The social media company announced that chief operating officer Sheryl Sandberg is joining its board of directors. “Sheryl has been my partner in running Facebook and has been central to our growth and success over the years,” said CEO Mark Zuckerberg said in a press statement. “Her understanding of our mission and long-term opportunity, and her experience both at Facebook and on public company boards makes her a natural fit for our board.”
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Shares of Bristol-Myers Squibb Co. (NYSE:BMY) increased 0.70 percent in late trading Tuesday evening are expected to rise after the big pharma company announced an additional $3 billion share repurchase program, in addition to its $3 billion buyback program it launched in 2010. It still has around $340 million remaining on the original buyback program.
Apple Inc. (NASDAQ:AAPL) shares posted modest gains on Tuesday, and continue to edge slightly higher in pre-market trading this morning. Orbitz Worldwide Inc. (NYSE:OWW) announced it has found that people who use Apple Mac computers spend as much as 30 percent more per night on hotel rooms, when compared to Microsoft Corp. (NASDAQ:MSFT) Windows users. Thus, the travel agency is beginning to show Mac users more expensive options when viewing travel accommodations.
Investor Insight: Is Facebook’s Rally Merely a SHORT SQUEEZE?
Noon Buzzers: Analysts Give Facebook a MIXED Review, O’Reilly CRUMBLES
Facebook (NASDAQ:FB) shares declined more than 1 percent in morning trading. Lead underwriters of the social media company began publishing comments on Wednesday. Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) rated Facebook as a Buy, but Bank of America (NYSE:BAC) and Citigroup (NYSE:C) remained Neutral on shares.
Lennar Corp. (NYSE:LEN) shares jumped 4.5 percent in morning trading. The homebuilder announced that second-quarter net income came in at $452.7 million ($2.06 per share), compared to $13.8 million (7 cents per share) a year earlier. Stuart Miller, Chief Executive Officer of Lennar Corporation, said, “Evidence from the field suggests that the ‘for sale’ housing market has, in fact, bottomed and that we have commenced a slow and steady recovery process. And while the housing downturn was broad-based and national, the recovery process continues to be very localized. Although highly conservative mortgage lending practices and challenging appraisals remain a constant headwind, we are experiencing net positive price and volume trends in most of our markets.”
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General Mills Inc. (NYSE:GIS) shares fell over 2 percent by midday, despite reporting stronger-than-expected financial results. In the fourth-quarter, the company earned $325.4 million (49 cents per share), compared to $320.2 million (48 cents per share) a year earlier. General Mills Chairman and Chief Executive Officer Ken Powell said, “Fiscal 2012 was characterized by the highest input-cost inflation we’ve experienced in more than three decades, and this cost pressure constrained our earnings growth. In addition, slow economic recovery kept many consumer budgets under pressure.
Shares of O’Reilly Automotive Inc. (NASDAQ:ORLY) crashed over 14 percent as of noon. The company lowered its second-quarter same-store sales guidance to 2 percent to 2.5 percent, down from 3 percent to 5 percent. Greg Henlsee, CEO and Co-President stated, “Our previously announced second quarter comparable store sales guidance reflected our slow start to the quarter in April due, we believed, to the shift of some business into the first quarter as a result of the early spring weather in many of our markets.”
Investor Insight: Orbitz’s CEO Defends CONTROVERSIAL Mac Strategy
Wall St. Brief: Apple WINS ONE Over Samsung, Big Banks Create Living Wills, Microsoft’s DISAPPOINTMENT
On Tuesday, a California judge issued a preliminary injunction banning Samsung from either producing or selling its Galaxy Tab 10.1 in the United States. The judge said Apple Inc. (NASDAQ:AAPL) had argued a strong case for the tablet’s design violating its patents. A trial has been set for July 30. Until then, analysts believe the injunction will not have a major effect on Samsung.
Europe’s second-highest court said on Wednesday that it “essentially upholds” a 2008 antitrust ruling against Microsoft (NASDAQ:MSFT) while reducing its fine by 39 million euros to 860 million euros, reported the Wall Street Journal. Microsoft responded it was disappointed by the news but did not say whether or not it would appeal the decision. The EU’s initial fine came from a Microsoft delay to share data with competitors.
Barclays (NYSE:BCS) may announce a settlement with the regulators, the CFTC and the U.K.’s FSA, from allegations that its staff attempted to manipulate the Libor interbank lending rate, reported the Financial Times. The story didn’t include the agreement’s terms and is not going to encompass the EU’s investigation of Barclays and its peers acting as a cartel affecting the Euribor rate.
JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) are some of the big banks that have already completed their “living wills” prior to the July 1 deadline, reported CNBC. These plans could enable banks to become less complex since the law enables regulators to tell a firm to sell units if it cannot get an organized bankruptcy together; however, it could nod back toward Glass-Steagall.
The drought for IPOs may be coming to an end after Facebook’s (NASDAQ:FB) debacle thanks to EQT Midstream Partners pricing an IPO and raising $262 million by selling 12.5 million common units at $21 per share. Approximately 35.3 percent of the company’s limited partner interest will be sold while the parent company, EQT Corp. (NYSE:EQT), will keep the balance.
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Bank of America (NYSE:BAC): JPMorgan (NYSE:JPM), BofA (NYSE:BAC), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) are the five banks completing “living wills” ahead of the July 1 deadline. This could lead to less complex banks since the law allows regulators to to order a firm in which it can sell off units if it is unable to plan an orderly bankruptcy. Shares of Bank of America are trading 1.97% higher today.
Apple Inc. (NASDAQ:AAPL): According to Global research firm Strategy Analytics, Apple has globally shipped 250M iPhones since its launch in 2007 generating 10.5B in revenues, reports Business Insider. Due to greater competition and carriers’ ideas of subsidizing the phone, the next years will be more challenging for the iPhone. Shares of Apple Inc. are trading 0.38% higher today.
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Facebook, Inc. (NASDAQ:FB) declines as investors up bid shares due to favorable underwriter coverage expectations and are disappointed to gain mixed ratings. Lead underwriter Morgan Stanley gives Facebook an Outperform rating, but its $38 price target only adds up to Facebook’s IPO price. Analyst Scott Devitt expects Facebook to post annual Payments revenue growth at only 17% from 2013-16, since gaming is switching to mobile devices. Shares of Facebook, Inc. are trading 2.36% lower today.
General Electric (NYSE:GE) intends to add 380 second shift production employees this summer because it anticipates exceptional sales of its new line of French door bottom-freezer refrigerators, and it has raised the amount of production employees working within the facility from 600 to 772 employees, while adding nearly 100 salaried positions in support of the new plant and product.
Nokia Corporation (NYSE:NOK) CEO Stephen Elop, has told Kaleva, local Finnish newspaper, that Microsoft (NASDAQ:MSFT) is not currently planning the manufacturing of its own smartphone, reports Dow Jones. Elop also states that Microsoft has ”made a clear decision with Nokia,” and the two should find a way to make technology and software work together with the new Windows Phone operating system. Shares of Nokia Corporation are trading 1.85% higher today.
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