Ultimate Market Recap: Big Banks Edge Higher Before Earnings, Supervalu Sinks 46%
Stocks BUZZING at the BELL: Arena DROPS 3%, Supervalu CRASHES 44%, Apple is in the RED
Arena Pharmaceuticals Inc. (NASDAQ:ARNA) shares are down 3.23 percent this morning in early trading. The company announced a filing with the Swiss health authority, Swissmedic. “This submission reflects our continued efforts to make lorcaserin available to physicians and patients beyond the United States,” said Jack Lief, Arena’s President and Chief Executive Officer. “We look forward to Swissmedic’s review of our application and to the potential approval of lorcaserin in Switzerland for patients who are obese or overweight with comorbidities.”
Shares of Marriott International Inc. (NYSE:MAR) are down 4.55 percent this morning after the lodging company reported second-quarter earnings of $143 million (42 cents per share), compared to $135 million (37 cents per share) a year earlier. However, revenue fell to $2.78 billion, compared to $2.97 billion. Arne M. Sorenson, president and chief executive officer of Marriott International, said, “In the second quarter, our business performed well in most markets around the world. In North America, strengthening group business, more travel by our special corporate customers, especially in the technology and consulting industries, and the impact of modest supply growth, drove our occupancy and room rates higher.”
A Closer Look: Marriott Earnings Cheat Sheet>>
Apple Inc. (NASDAQ:AAPL) shares are trading slightly lower this morning after the company responded about pulling its products from the U.S. government-backed Electronic Production Environmental Tool, or EPEAT, the green standard for U.S. companies. “Apple takes a comprehensive approach to measuring our environmental impact and all of our products meet the strictest energy efficiency standards backed by the U.S. government, Energy Star 5.2,” Apple rep Kristin Huguet, told The Loop. “We also lead the industry by reporting each product’s greenhouse gas emissions on our website, and Apple products are superior in other important environmental areas not measured by EPEAT, such as removal of toxic materials.”
Supervalu Inc. (NYSE:SVU) shares are down 44.61 percent this morning. The supermarket operator announced that it suspended its dividend and will review strategic alternatives going forward. First-quarter earnings also came in at $41 million (19 cents per share), compared to $74 million (35 cents per share) a year earlier. “These are bold but necessary moves,” CEO Craig Herkert said in the announcement, “which will position Supervalu for success in this increasingly competitive environment.”
Chevron Corp. (NYSE:CVX) shares are up 0.71 percent this morning after the company reported yesterday afternoon that earnings for the second-quarter are expected to be higher than the first-quarter, when it earned $3.27 per share. The WSJ reports, “In the latest period, international downstream earnings are expected to include about $200 million in gains from asset sales. Chevron also said U.S. oil-equivalent production increased 14,000 barrels a day during the first two months of the second quarter, largely due to increased production in the Gulf of Mexico.”
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Wall St. Brief: Investors Await Firm Yahoo! CEO News, Chevron Gets LUCKY
Yahoo! Inc. (NASDAQ:YHOO) is expected to name Ross Levinsohn as its permanent CEO, according to an L.A. Times report. Yet, AllThingsD the announcement will not come today and the company may be pursuing last minute options. The news isn’t too surprising as Yahoo’s Chairman Fred Amoroso gave his support for Levinsohn after Jason Kilar took his hat out of the ring for the job. The announcement was originally thought to come today at the company’s annual meeting, but now sources are saying otherwise. No news yet on when the announcement will come.
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Supervalu (NYSE:SVU) is reviewing either a sale of all or a portion of the company. It suspended its dividend after fiscal quarter earnings largely missed estimates. Earnings per share tanked 46 percent to $0.19 and revenue fell 4.5 percent to $10.6 billion. This was affected by declining customer traffic at its traditional grocery stores as rivals slashed their prices.
HSBC (NYSE:HBC) is preparing for fines as high as $1 billion as it gets ready to apologize to Congress next week for the lack of controls that enabled the bank to be utilized for money laundering of terrorist and other criminal activities. The bank’s CEO Stuart Gulliver will present at the July 17 according to MarketWatch. While HSBC’s penalty is expected to be higher, ING (NYSE:ING) was recently fined $619 million fine for its role from laundering funds for Iran and Cuba.
Blackstone (NYSE:BX) will reportedly join former AIA Group (AAIGF.PK) chief Mark Wilson and Swiss Re (SWCEF.PK) in a bid for ING’s (NYSE:ING) Asian insurance business. The group may bid €5B-€6B ($6.1 billion to $7.3 billion), possibly hitting ING’s desired $7 billion. AIA, Korea Life Insurance and Manulife (NYSE:MFC) have also made bids.
Investigators have concluded their review and found the 2011 Brazil offshore oil spill by Chevron (NYSE:CVX) resulted in little environmental damage. From the event, Chevron and Transocean (NYSE:RIG) are dealing with criminal charges and fines of $10 billion-plus. Meanwhile on Wednesday, Chevron said it sees second quarter earnings declining to first quarter numbers thanks to increased refining margins and asset sales offsetting upstream profit declines.
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Bank of America (NYSE:BAC): According to a new U.S. stock analyst ranking by consulting firm Greenwich Associates who is associated with Bloomberg Markets, JPMorgan (NYSE:JPM) has the highest number of highly ranked analysts, which makes it the top U.S equities research firm. Bloomberg reports that Bank of America (NYSE:BAC) was second followed by Morgan Stanley (NYSE:MS). Shares of Bank of America are trading 2.23 percent lower today.
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Apple Inc. (NASDAQ:AAPL): Although the new iPhone 5 has not yet been released, the largest e-commerce platform in China has begun accepting orders for the smartphone, according to Reuters. The phone should be released between August and October. Shares of Apple Inc. are trading 0.88 percent lower today.
Facebook, Inc. (NASDAQ:FB) has further integrated itself with the Apple iOS mobile operating system via easing the difficulty for developers to connect Facebook with original iPhone and iPad apps. Wednesday, Facebook announced a beta version 3.0 or the iOS software development kit (NYSE:SDK), claiming it has the ability to make it ”easier and faster to develop Facebook-integrated iOS apps.” Facebook also revealed an iOS dev centre providing tools and resources for the change. Shares of Facebook, Inc. are trading 0.16 percent higher today.
AT&T, Inc. (NYSE:T): A private discussion called “Diversity is Good for the Bottom Line,” explaining the private sector’s role in supporting an inclusive workforce, was held by The Center for American Progress (NYSE:CAP). Chief Diversity Officer Bucherati at Coca-Cola Co., Senior Policy Counsel McCurdy at Microsoft and Senior Vice President Storey at AT&T were all involved with the discussion held in Washington, D.C. at 10 am on July 12. Shares of AT&T, Inc. are trading 1.36 percent lower today.
Nokia Corporation (NYSE:NOK) may have fallen into deeper trouble with its quarterly reports next week since Microsoft-based smartphones will likely not pick up until later this year. The world’s second largest cellphone maker entered the smartphone war late, allowing Apple and Samsung to gain dominance. Its newest weapon for the war is the Lumia, which uses Microsoft’s Windows software. Shares of Nokia Corporation are flat today.
SkyWest STRIKES Atreement with Mitsubishi Aircraft and 4 Hot Stocks on the Move
Complete Genomics, Inc. (NASDAQ:GNOM) has risen 9.2% premarket which adds to yesterday’s 44% surge after the announcement of its Long Fragment Read (LFR) technology, a new way to map DNA which ”dramatically improves accuracy…and significantly reduces the amount required for testing.” This should cause it to be more accessible to patients. Shares of Complete Genomics, Inc. are trading 5.80% lower today.
Callaway Golf Co (NYSE:ELY) intends to cut 12% or its workforce in its move to focus on important brands Callaway and Odyssey. Now, the company predicts a $0.55 to $0.75 loss within the year. Following the company’s preannouncement regarding a slightly low Q2 revenue, Roth Capital lowered its estimates, but keeps its optimism concerning the company’s long-term outlook. The firm keeps a Buy rating on the stock. Shares of Callaway Golf Co are trading 4.42% lower today.
LMP Real Estate Income Fund Inc. (NYSE:RIT): Legg Mason BW Global Income Opportunities Fund Inc. BWG +0.35% will host a conference call today, July 12, 2012, at 4.00 pm eastern. Brandywine Global Investment Management, LLC Portfolio Manager Brian Hess intends to discuss both the Fund’s investment portfolio and outlook. He will also hold a Q&A session. The Legg Mason-affiliated closed-end fund family also includes ClearBridge Energy MLP Fund Inc. CEM -0.30% , ClearBridge Energy MLP Opportunity Fund Inc. EMO -0.15% , ClearBridge Energy MLP Total Return Fund Inc. CTR -0.86% , LMP Capital & Income Fund Inc. SCD -0.55% , LMP Corporate Loan Fund Inc. TLI +0.16%. Shares of LMP Real Estate Income Fund Inc. are trading 0.96% lower today.
SkyWest, Inc. (NASDAQ:SKYW) has granted Mitsubishi Aircraft Corp. an agreement in which Mitsubishi will sell 100 regional planes to SkyWest Inc. (NASDAQ:SKYW) (NASDAQ:SKYW) as a way to endorse Japan’s passenger jet at Canada’s Bombardier Inc.’s expense. The planes have up to 90 seats and the deliveries of the planes will begin in 2017 beneath yesterday’s announced accord. The commitment is valued at a $4.2B list price, which pushes Mitsubishi’s orders as well as commitments for the jet to 230. Shares of SkyWest, Inc. are trading 0.64% higher today.
Fastenal Company (NASDAQ:FAST) has risen 1.4%. The company’s net profit for Q2 has risen 19% reaching $112.3M, which includes a loss on property and equipment sales. This is the third consecutive growing quarter, but analysts continue to be negative about the company’s Q3. Fastenal’s gross margin for Q2 dropped from 52.2% to %1.6%, but the company opened 53 new stores during H1. Shares of Fastenal Company are trading 6.61% higher today.
Investing Insights: Fastenal Earnings CHEAT SHEET: Double-Digit Growth AGAIN!
Merck UPGRADED Due to Trial Data and 4 Hot Stocks Not to Miss Today
Booz Allen Hamilton Holding Corporation (NYSE:BAH): For someone who doesn’t actually live in the community, Reggie Van Lee has built quite a reputation, as the go-to investor, for all things Harlem. The high-powered executive from the Washington, D.C. consulting firm, Booz Allen Hamilton, has donated more than a million dollars to various Harlem businesses and community institutions. Until recently, he managed to stay above the political fray, but that changed last September, when Van Lee got behind Congressional candidate Clyde Williams. Shares of Booz Allen Hamilton Holding Corporation are trading at a 0.95% lower rate today.
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Superior Industries International Inc. (NYSE:SUP): Shares of Superior Industries International Inc. are trading 1.19% lower today.
Merck & Co., Inc. (NYSE:MRK): Merck’s robust Phase III Odanacatib’s trial data for post-menopausal patients with osteoporosis, has been upgraded by Citibank. Citi believes that Odanacatib could revive a large, but declining market, and raised its price target for Merck shares from $34 to $50. The company’s shares are trading at a 4.32% higher rate today.
Piedmont Natural Gas Company Inc. (NYSE:PNY): A plunge in the price of natural gas has made it cheaper for utilities to produce electricity. But the savings aren’t translating to lower rates for customers. Instead, U.S. electricity prices are going up. Shares of Piedmont Natural Gas Company Inc. are trading at a 1.16% lower rate today.
Alexandria Real Estate Equities Inc. (NYSE:ARE): Investment advisers caution that the narrow focus of many REITs can make them poor choices for small investors who are building their own portfolios. For those who want to give it a go, Morningstar has given favorable ratings to Alexandria Real Estate Equities, BioMed Realty Trust, Corporate Office Properties, Diamond Rock Hospitality, Hospitality Properties and Ventas. Shares of Alexandria Real Estate Equities Inc. are trading at a 1.31% lower rate today.
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Afternoon BUZZERS: Apple No Longer a CHAMPION, Disney Receives UPGRADE
Apple Inc. (NASDAQ:AAPL) shares are down 1.05 percent percent this afternoon. Analysts at Citigroup Inc. (NYSE:C) removed the tech giant from the bank’s “Champions” list. The ranking device is similar to a “Conviction Buy” list and uses valuation and momentum variables to classify stocks as either “champions” or “dogs.” However, Citi did add companies such as General Electric Co. (NYSE:GE) and Johnson & Johnson (NYSE:JNJ) to the “Champion” list.
Supervalu Inc. (NYSE:SVU) shares plummeted 46.22 percent this afternoon. The supermarket operator announced yesterday that it suspended its dividend and will review strategic alternatives going forward. First-quarter earnings also came in at $41 million (19 cents per share), compared to $74 million (35 cents per share) a year earlier. “These are bold but necessary moves,” CEO Craig Herkert said in the announcement, “which will position Supervalu for success in this increasingly competitive environment.”
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Shares of Walt Disney Co. (NYSE:DIS) are up 0.38 percent this afternoon after the entertainment company received an upgrade from Wells Fargo (NYSE:WFC) to Outperform from Market Perform. Analyst Marci Ryvicker cites that Wall Street is too conservative on its estimates and “the stock may actually break out of its current mid to high $40-range on this coming earnings call.”
Marriott International Inc. (NYSE:MAR) shares dropped 6.08 percent this afternoon. The company reported an increase in second-quarter earnings, but revenue declined 6.6 percent to $2.78 billion from a year earlier, missing estimates of $2.84 billion. Revenue has fallen in the past two quarters. In the first quarter, revenue declined 8.1 percent to $2.55 billion from the year-earlier quarter.
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Radar Movers: P&G POPS, Big Banks Edged Higher Ahead of Earnings
Shares of Procter & Gamble (NYSE:PG) continue to attract interest in late afternoon trading, after closing 3.75 percent higher on Thursday. The world’s largest consumer-products company jumped the most in 11 months after the Federal Trade Commission approved its deal with William Ackman’s Pershing Square Capital Management LP. The FTC did not disclose what type of transaction had been approved. “We welcome investment in our company,” Paul Fox, a P&G spokesman, explained to Bloomberg. “We are focused on creating shareholder value by executing on our plan to deliver top and bottom line growth through our $10 billion cost savings program, renewing our focus on innovation, pricing initiatives and improved execution, and reallocating resources to invest in the highest return opportunities.” Ackman also has large stakes in J.C. Penney (NYSE:JCP) and Target (NYSE:TGT).
Apple (NASDAQ:AAPL) shares closed under $600 today in regular trading, but edged slightly higher late Thursday. Despite the tech giant not confirming an official release of the iPhone 5 this year, some outlets are already betting on it. China’s largest e-commerce platform, Taobao, is taking orders for the purported iPhone 5, which many believe will be released between August and October. The site includes mock-up pictures and the device’s supposed technical specifications. Sellers taking pre-orders on Taobao, are asking in some cases for a deposit of 1,000 yuan ($160) while one seller, Dahai99888, is asking for full payment up front to the tune of 6,999 yuan ($1,100).
JPMorgan Chase (NYSE:JPM) shares gained 0.35 percent in late afternoon hours. America’s largest bank by assets is set to release its latest earnings early Friday. Investors will be keeping a close eye on the now infamous “London Whale” trading loss, which could range from $5 billion to $7 billion. JPMorgan also extended its earnings conference call by 30 minutes in order to address concerns.
Wells Fargo (NYSE:WFC) shares also edged slightly higher ahead of its earnings release on Friday. The mortgage lender bellwether will pay at least $175 million to settle allegations that it discriminated against black and Hispanic borrowers. The WSJ reports, “The settlement announced by the Justice Department Thursday involves at least 34,000 minority borrowers who were charged higher fees or were steered into risky subprime mortgages when they could have qualified for a prime mortgage, ones offered to borrowers with the best credit.”
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