Ultimate Market Recap: Good Day for Gap, Best Buy Has New CEO
Morning BUZZERS: Gap and Apple Climb HIGHER, Molycorp Plunges 10%
Aeropostale (NYSE:ARO) shares fell 9.88 percent this morning. The company said late Thursday that net income in the second quarter crashed 97.6 percent to $71,000, compared to $2.9 million a year earlier. Revenue edged 3.7 percent higher to $485.3 million in the same time period. It was a miss on the top and bottom line for the company. Thomas P. Johnson, chief executive officer, commented, “While we were encouraged by the customer response to our fashion offering, we were disappointed by our overall financial performance for the second quarter.”
Shares of Apple (NASDAQ:AAPL) edged 1.11 percent higher after Jefferies reiterated its Conviction Buy rating on the tech giant. Analyst Peter Misek also raised his price target on Apple to $900 from $800, citing supply checks indicate the iPad Mini and iTV have gone into production.
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Molycorp (NYSE:MCP) shares plummeted 9.95 percent on Friday, reach new all-time lows. The rare earth miner received a downgrade to Hold from Buy at Dahlman Rose, citing concerns about the Mountain Pass projected being completed as scheduled.
Ann (NYSE:ANN) shares surged 19.51 percent after reporting financial results for the second quarter. Net income rose 24 percent to $30.7 million (63 cents per share), compared to $24.8 million (47 cents per share) a year earlier. Revenue also increased 6.6 percent to $594.9 million. It was a beat on the top and bottom line for the company.
Gap (NYSE:GPS) shares increased 4.60 percent this morning. The clothing retailer reported that net income for the second quarter rose 28.6 percent to $243 million (49 cents per share), compared to $189 million (35 cents per share) a year earlier. The company beat the mean analyst estimate of 37 cents per share. “Customers responded well to our product offerings across our brands, driving a healthy increase in sales and earnings per share during the quarter,” said Glenn Murphy, chairman and chief executive officer. “Our continued focus on product and store execution are helping to drive positive momentum and we’re committed to sustaining solid performance for the remainder of the year.”
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Toyota RUMORED to Collaborate with Ford on Hybrid and 4 Hot Stocks Trading Today
Bank of America Corporation (NYSE:BAC): According to IB Times, Florida’s state regulator has issued subpoenas to Lloyds (NYSE:LYG), Bank of America (NYSE:BAC), Societe Generale (SCGLY), Credit Suisse Group (NYSE:CS), Credit Agricole (CRARY), Royal Bank of Canada (NYSE:RY) and Rabobank and says it is “actively reviewing the Libor matter.” Shares of Bank of America Corporation are trading at 1.95% higher today.
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Alexandria Real Estate Equities Inc. (NYSE:ARE): Alexandria Real Estate Equities Inc.’s stock, in a research note issued on Thursday, had their “overweight,” rating reaffirmed by Barclay’s Capital. Their shares traded up 0.39% and hit $74.24. The company has a one year low of $56.10, a one year high of $76.50, and a market cap of $4.621 billion with a P/E ratio of 52.08. Shares of Alexandria Real Estate Equities Inc. are trading at 1.033% lower today.
Toyota Motor Corporation (NYSE:TM): The Chevrolet Silverado Hybrid may have competition from Ford and Toyota, if GM’s full size truck hybrid survives into a second generation. Ford and Toyota engineers are developing rear-drive hybrid technology that could lead to a future F-150 hybrid, among other possible vehicles. Shares of Toyota Motor Corporation are trading at 0.28% higher today.
GMAC LLC (NYSE:GOM): Riding a rebound in auto sales, General Motors, this week, shored up the capital of their purchasing arm with a United States $1 billion bond issue. The fallen Detroit giant is battling back from bankruptcy and trying to rebuild the lending business that they sold six years ago. Shares of GMAC LLC are trading at 0.10% lower today.
Apple Inc. (NASDAQ:AAPL): According to the Wall Street Journal, the trial in San Jose, CA entered its final days in the ongoing patent battle between Apple (NASDAQ:AAPL) and Samsung Electronics Co. (SSNLF). Apple contends they are owed over $2.5 billion in damages based on a host of Samsung devices that are infringing on several of their patents. A lawyer for Samsung provided testimony and evidence designed to reduce the potential penalty that the company would face if the jury rules that Samsung devices violated Apple patents. Shares of Apple Inc. are trading at 1.15% higher today.
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Marvell Tech’s Q2 Earnings Fall 52% and 4 Hot Stocks to Notice
Ann Inc. (NYSE:ANN): Ann Inc.’s fiscal year 2012 gross margin rate performance is expected to be in the neighborhood of 55%, with their total selling general and administrative expenses expected to approach $1.140 billion. The company’s effective annual tax rate is anticipated to be around 40%, with capital expenditures at approximately $160 million. Their total weighted average square footage for the fiscal year 2012 is expected to increase slightly, reflecting the opening of roughly 65 new stores, which are partially offset by the downsizing of Ann Taylor stores and about 30 store closings. The Company expects to have approximately 985 stores at the end of their fiscal. Shares of Ann Inc. are trading at 21.89% higher today.
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Brocade Communications Systems, Inc. (NASDAQ:BRCD): Ahead of the bell, and thanks to a higher than expected quarterly earnings results, Brocade Communications Systems, Inc. received a slew of upward price target adjustments. Specifically, Baird raised their stock from $6 to $7, while Thinkequity, FBN Securities, and UBS also lifted their respective price targets. Currently, the equity boasts a 12 month climb of about 70%, and has bested the broader Standard and Poors 500 Index (SPX) by an increase of 12 percentage points. It stands to reason that calls outweigh puts, as evidenced the security’s 20-day ISE/CBOE/PHLX call/put volume ratio of 3.72. In other words, during the last four weeks, calls bought to open have nearly quadrupled puts. Shares of Brocade Communications Systems, Inc. are trading at 2.09% higher today.
Marvell Technology Group Ltd. (NASDAQ:MRVL): As the chip maker continued to suffer from weaker demand in their core businesses, Marvell Technology Group Ltd.’s (NASDAQ:MRVL) fiscal second quarter earnings declined by 52%. Results fell short of company estimates and shares fell 7.3% in after-hours trading to $11.38, their stock was down 11% so far this year. “Our results in the second quarter were affected primarily by the slowdown in the macro-economic environment that impacted our storage and mobile end markets,” said Chief Executive Sehat Sutardja. Shares of Marvell Technology Group Ltd. are trading at 15.19% lower today.
Idenix Pharmaceuticals, Inc. (NASDAQ:IDIX): Idenix Pharmaceuticals, Inc.’s shares were upgraded, this morning, by Brean Murray, and JPMorgan added the stock to their Focus List. Shares of Idenix Pharmaceuticals, Inc. are trading at 1.03% higher today.
Geron Corporation (NASDAQ:GERN): After a report touted the company’s cancer drugs that are under development, Geron Corporation (GERN), a Menlo Park, California based bio-technology company, gained the most in almost two months. Though their shares lost 38% over the last 12 months, they rose 15% to $1.97 in their biggest intra-day advance since June 22. Shares of Geron Corporation are trading at 0.99% lower today.
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Market Recap: Apple Hits a New Record as Indices Approach 4 1/2 Year HIGH
Markets closed up on Wall Street today: Dow +0.19%, S&P +0.19%, Nasdaq +0.46%, Oil +0.53%, Gold -0.10%.
Here’s your Cheat Sheet to today’s top stock stories:
Apple (NASDAQ:AAPL) closed above $630 on Thursday for the first time since April 9, when it hit an intraday high of $644 before beginning a six-week decline that by May 18 had knocked $115 off the share price and more than $100 billion off the company’s market cap.The selloff continued last month when Apple reported a rare earnings miss, but while markets tested and held the $570 level in three separate trading sessions that week, shares never fell below that key support level.
On Friday, the rise continued and Apple closed at $648.11, hitting an all-time record high stock price in the meantime and clearing a 606 billion market cap.
Ann Inc.’s (NYSE:ANN) shares rose 22 percent. The company reported strong second quarter earnings and exceeded profit estimates. It raised its full-year outlook and Piper Jaffray raised its rating from “Overweight” from “Underweight” with a $37 price target.
MetroPCS Communications Inc.’s (NYSE:PCS) shares jumped 5.8 percent and Leap Wireless International Inc.( LEAP ) rose 7.2 percent after J.P. Morgan said Sprint Nextel Corp. (NYSE:S) is now in better situation to purchase either company.
On the downside, Aeropostale Inc.’s (NYSE:ARO) shares dropped 10 percent after the company gave a weaker-than-expected profit forecast for its current quarter.
Marvell Technology Group’s (NASDAQ:MRVL) shares tanked 14 percent after the company disclosed disappointing quarterly results and outlook. Marvell said it has felt pressure from declining PC and smartphone demand and increasing competition from the Chinese phone market.
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BUZZING Stocks: Apple Surges to RECORD High, Facebook and Groupon SINK
Shares of Apple (NASDAQ:AAPL) jumped nearly 2 percent during regular trading to reach a new closing high of $648.11. Analyst Peter Misek from Jefferies believes a smaller iPad may go on sale by October and a new television product could become available by 2013. He also reiterated his Buy rating on the stock and raised his price target to $900 from $800, estimating Apple will make 25 million iPad devices of all kinds in the current quarter, up from a previous estimate of 16 million.
Facebook (NASDAQ:FB) shares slumped again on Friday and continue to attract attention in late afternoon hours. The Zuckerberg-led company has come under new pressure as the first IPO lockup agreement recently expired and brought 271.1 million more shares to the market for trading. On November 14, more than 1.2 billion shares will be available for trading and another 149.4 million shares a month later. Shares hit a new all-time low along with Groupon (NASDAQ:GRPN).
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Ann (NYSE:ANN) shares closed the day 20 percent higher and continues to gain in late afternoon trading. The clothing retailer recently reported financial results for the second quarter. Net income rose 24 percent to $30.7 million (63 cents per share), compared to $24.8 million (47 cents per share) a year earlier. Revenue also increased 6.6 percent to $594.9 million. It was a beat on the top and bottom line for the company.
After plunging 11 percent, Aeropostale (NYSE:ARO) shares bounced 0.91 percent in late afternoon hours. The company said late Thursday that net income in the second quarter crashed 97.6 percent to $71,000, compared to $2.9 million a year earlier. Revenue edged 3.7 percent higher to $485.3 million in the same time period. It was a miss on the top and bottom line for the company. Thomas P. Johnson, chief executive officer, commented, “While we were encouraged by the customer response to our fashion offering, we were disappointed by our overall financial performance for the second quarter.”
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Wall St. Brief: Best Buy Has a NEW CEO, Aetna Will Buy Coventry for $7.3 BILLION
Aetna (NYSE:AET) will buy Coventry Health Care (NYSE:CVH) in a cash and stock transaction valued at $7.3 billion; this includes taking the latter’s debt. With the $42.08 per share offer, it represents a 20 percent increase to Coventry’s closing price from Friday and in premarket trading, the stock is up 18.3 percent. From the acquisition, Aetna will gain 5 million members, making it one of the largest providers of government-funded healthcare.
Best Buy (NYSE:BBY) has a new CEO: turn-around specialist Hubert Joly, the head of Carlson, the restaurant and hotel company. He will take over for interim CEO Mike Mikan. Joly will now have to deal with Best Buy founder Richard Schulze, who rejected a company offer to undergo due diligence and propose a buyout offer within 60 days.
Groupon (NASDAQ:GRPN) saw at least four of its early investors either sell many or all of their shares since the company’s post-IPO lockup period ended in June, reported the Wall Street Journal. This includes venture-capital firm Andreessen Horowitz. The investors’ actions have been viewed as “abandoning a sinking ship” but it’s actually policy for some venture capital firms to get rid of their holdings as soon as possible after IPOs.
While it seeks to cut European costs, GM (NYSE:GM) could sign an agreement within a week with the German government and the IG Metall Union to apply a “short-time program” at Opel’s Russelsheim and Kaiserslautern plants. The action would enable GM to either cut or widen employees’ workdays or workweeks depending on demand instead of laying off them off from the plants.
JPMorgan (NYSE:JPM) named former Exxon (NYSE:XOM) CEO Lee Raymond as the chairman of a board committee that’s reviewing the bank’s multi-billion dollar “London-whale” trading debacle, reported the Wall Street Journal. Former JPM director John Biggs said of Raymond, “He won’t whitewash anything.” He was also said to be “tough as nails” while at Exxon.
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Lorillard Inc. (NYSE:LO), the third largest cigarette manufacturer in the United States, announced today that it has priced an underwritten public offering of an aggregate principal amount of $500 million 2.300 percent senior notes due 2017 via its main operating subsidiary, Lorillard Tobacco Company, and guaranteed by Lorillard, Inc. The company expects to close the sale of the notes on August 21, 2012, subject to customary closing conditions. The net proceeds raised from the offering are to be used for general corporate purposes, which could include the repurchase, redemption, or retirement of securities including its common stock, acquisitions, additions to working capital and capital expenditures. Shares of Lorillard Inc. are trading 1% lower today.
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Netflix (NASDAQ:NFLX) has signed up 1 million members in the U.K. and Ireland after its long-awaited launch in January, which is part of a drive to offset the slowing U.S. market growth, the video-streaming company stated on Monday.
Sirius XM Radio Inc (NASDAQ:SIRI): On Friday, Liberty Media revealed, following the close, that it had acquired more shares of Sirius XM on the open market, and there was a new twist. Liberty Media has taken back its previous FCC filing for “de facto’ control and has replaced it with a new filing which is requesting “de jure” control. Shares of Sirius XM Radio Inc are trading 0.78% higher today.
Marvell Technology Group Ltd. (NASDAQ:MRVL) posted a Q2 earnings per share of $0.19, which misses the Zacks Consensus Estimate of $0.22. Shares of Marvell Technology Group Ltd. are trading 0.71% lower today.
Lowe’s (NYSE:LOW) posted a 10 percent drop in its Q2 net income, which was harmed by a timing shift and a charge related to job cuts. The company’s performance missed Wall Street’s expectations.
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Groupon Inc (NASDAQ:GRPN): A few early backers of Groupon, including Silicon Valley veteran Marc Andreessen, are leaving, and joining investors who have lost faith in companies that were expected to drive a new Internet boom, according to the Wall Street Journal. Shares of Groupon Inc are trading 0.21% lower today.
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Ann Inc (NYSE:ANN): Abnormal trading volume of Ann Inc. was discovered on August 17 reaching 9.34 million shares, 13 times heavier than usual day trading. The company saw a boost of 20.43 percent, moving up $5.75 to $33.89 per share. This is following the company’s release of its Q2 fiscal 2012 financial results and the raising of its guidance for the full year 2012 fiscal year. For Q2 of fiscal 2012, operating income increased 27 percent to $52.9 million, from $41.7 million in Q2 of fiscal 2011. Net income totaled $30.7 million during Q2 of 2012, versus the $24.8 million in the last year’s quarter, an increase of 24 percent. Ann reported diluted earnings per share of $0.63 for the latest quarter, which is a 34 percent increase year-over-year. The company has a market capitalization of $1.65 billion. Shares of Ann Inc are trading 0.91% higher today.
Pulte Group (NYSE:PHM): Army Sgt. Davin Dumar sacrificed a lot of this country and individuals including Kid Rock found a way to thank him. On Saturday, in Macomb Township, Kid Rock along with Dan Wallrath, who is the founder of Operation Finally Home, and representatives of the Pulte Group to present Dumar and his wife Dana, with a free new home.
Zagg Inc (NASDAQ:ZAGG) shares dropped 18 percent on Monday, after the company’s CEO and co-founder, Robert Pedersen, resigned three days after he sold shares to meet margin calls. Shares of Zagg Inc are trading 11.88% lower today.
Best Buy (NYSE:BBY): Richard Schulze, the founder and largest shareholder of Best Buy Co. stated on Monday that he is both “disappointed and surprised” that his offer to purchase the electronics retailer was rejected by the company. Best Buy Co., which earlier today chose a new chief executive for the company as it continues its struggles with falling sales, has been locked in a public back-and-forth with Mr. Schulze, who proposed that he would take the retailer private earlier this month.
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Afternoon BUZZERS: Lowe’s and Best Buy DROP, Coventry Health Care and Aetna POP
Shares of Lowe’s (NYSE:LOW) dropped 6.64 percent after reporting financial results for the second quarter. Net income fell 10 percent to $747 million (64 cents per share), compared to $830 million (64 cents per share) a year earlier. Revenue also fell 2 percent to $14.25 billion. “Our results fell short of our overall expectations,” commented Robert A. Niblock, president and chief executive officer. “However, I have confidence in our strategy and in our employees, and while we recognize the significant magnitude of change that we’ve asked the organization to absorb as we transform our business, we fully understand that we must improve our level of execution.” Shares of competitor Home Depot (NYSE:HD) edged slightly lower.
Coventry Health Care (NYSE:CVH) shares surged 19.18 percent this afternoon. The health insurer will be bought by competitor Aetna (NYSE:AET) for $5.6 billion in cash and stock. Reuters reports, “The acquisition of Coventry will help Aetna to lift its share of revenue from its government business to over 30 percent from 23 percent. Aetna said it expects to finance the cash portion of the transaction with a combination of cash on hand and by issuing about $2.5 billion of new debt and commercial paper. The deal is expected to add modestly to Aetna’s operating earnings per share in 2013, 45 cents in 2014 and 90 cents in 2015.”
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Best Buy (NYSE:BBY) shares declined 7.70 percent this afternoon. The struggling electronics retailer appointed Carlson executive Hubert Joly as chief executive today. Founder Richard Schulze has turned down an offer from the board to conduct due diligence after offering to take Best Buy private. “I still hope to work with the board on a mutually beneficial transaction — but you should know that I am not going away,” Schulze wrote in a letter to the board.
Shares of Groupon (NASDAQ:GRPN) have begun to recover, up over 1 percent this afternoon. Some of the company’s early backers were running for the exits, but shares have turned positive. The WSJ reports, “At least four Groupon investors who held stock in the daily-deals company before it went public have sold or significantly pared back their holdings in recent months. Since its initial public offering in November, Groupon has shed more than three-quarters of its stock-market value, or about $10 billion.”
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Cypress Semiconductor EXTENDS Bid for Ramtron and 4 Hot Stocks Turning Heads
Bank of America Corporation (NYSE:BAC): According to the Wall Street Journal, US stocks are near their highest level in about five years, but instead of enthusiasm, market participants have reacted with skepticism, pointing to economic concerns and doubts about whether expectations for new monetary stimulus are well-founded. Shares of Bank of America Corporation are trading at 1.63% higher today.
Cypress Semiconductor (NASDAQ:CY): Cypress Semiconductor Corp. has extended the deadline from August 17 to August 24 on their offer to buy Ramtron International Corp. for the third time, continuing a hostile bid that began last year. In June, after the semiconductor maker rejected a prior bid of $88 million saying it didn’t reflect their intrinsic value, Cypress took their boosted $95 million cash offer to the shareholders. The most recent bid offered to investors was $2.68 a share, up 20 cents from the previous offer. They didn’t disclose the number of shares that have been tendered.
Toyota Motor Corporation (NYSE:TM): Government aid this year has helped Toyota Motor Corporation (NYSE:TM) and Honda Motor (NYSE:TM) sales grow faster in Japan than any other major market. There was about a 53% growth through July. Analysts at BNP Paribas SA and IHS Automotive, however, anticipate that these subsidies will soon run out and during the next quarter, Japanese vehicle sales will fall about 20%. Shares of Toyota Motor Corporation are trading at 1.07% lower today.
Priceline (NASDAQ:PCLN): William Shatner’s Priceline Negotiator isn’t a goner after all. He just went surfing. Seven months after a commercial showed him plunging off a cliff and into apparent oblivion, the company resurrected him with a new 30 second TV and online spot.
Apple Inc. (NASDAQ:AAPL): According to The New York Times, Jurors this week are expected to deliberate in order to reach a verdict in the Apple (NASDAQ:AAPL) and Samsung patent case. If Apple wins, rival companies will likely make smartphones and tablets that look very different from those of Apple. A Samsung win could mean that Apple’s competitors will keep making products that look similar to the iPhone and iPad. Shares of Apple Inc. are trading at 1.97% higher today.
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