Wall Street Watch: Greece Avoids Catastrophe, Wal-Mart Expands in China

Euro zone finance ministers approved the Greece bailout deal for a total of EUR 130 billion ($172 billion). National central banks won’t be included in a debt swap but private bond holders will incur a 53.5 percent loss. They will receive “sweeteners” such as 30-year bonds as a trade for the ones they forgo. The money from the program will try to cut Greece’s debt to 121 percent of GDP by 2020, down from its current 160 percent. Austerity measures for the population aren’t going over well and additional protests may take place.

Don’t Miss: Greek Bailout Deal is Complete.

On Monday, Walmart (NYSE:WMT) reported an increased stake to around 51 percent in the Chinese e-commerce firm Yihaodian in an effort to increase its presence in the country’s expanding consumer market. The company said in a statement that it needs government regulatory approval; financial details were not disclosed. This news comes just two weeks after Walmart announced a new leader for it China operations.

Samsung (SSNLF.PK) will spin off its unprofitable LCD business and focus on its profitable smartphones, non-memory chips, and next-generation panels, according to Bloomberg. The new company will be called Samsung Display Co and will be set up April 1 from paid-in capital of  WON 750 billion won ($668 million).

In 2011, Samsung’s LCD business reported an operating loss of WON 750 billion from slowing global TV sales. The spinoff company could eventually merge with the Samsung Mobile Display venture, the maker of OLED panels.

Japan reported a record trade deficit in January from a strengthening yen and eroding manufacturers’ profits from a weak global demand. The gap expanded to 1.48 trillion yen ($19 billion), exceeding estimates of 1.46 trillion yen, according to Bloomberg. The country saw shipments decline 9.3 percent from the previous year while energy imports jumped, according to Tokyo’s Ministry of Finance.

Investor Insights:

Facebook Could Make $1.2 Billion from Mobile Advertising in Major Markets.
Microsoft: Windows Market Share is in Free Fall.
Food Inflation Hits Consumers in the Wallet and Stomach.

8 Highly Active Stocks: Wal-Mart Drops 3%, While Macy’s and Home Depot Jump After Earnings

Wal-Mart Stores Inc. (NYSE:WMT) dropped 3 percent after announcing fourth quarter profit declined 15 percent.  The retailer earned $5.16 billion ($1.50 per share), compared to $6.06 billion ($1.70 per share) a year earlier.

Shares of Saks Inc. (NYSE:SKS) jumped more than 4 percent in early trading.  The company reported fourth quarter earnings of $36.9 million (21 cents per share), compared to $24.9 million (14 cents per share) a year earlier.

Don’t Miss: Food Inflation Hits Consumers in the Wallet and Stomach.

Macy’s Inc. (NYSE:M) increased 3.4 percent before the closing bell.  The company reported a 12 percent increase in fourth quarter income.  The company earned $745 million ($1.74 per share), compared to $667 million ($1.55 per share) a year earlier.

Home Depot Inc. (NYSE:HD) shares rose 3 percent after releasing fourth quarter results.  The home improvement company earned $774 million (50 cents per share), compared to $587 million (36 cents per share) a year earlier.

Hecla Mining Co. (NYSE:HL) shares surged 4.5 percent after reporting fourth quarter profits of $18.6 million (7 cents per share), compared to a net loss of $9.7 million (5 cents per share) a year earlier.  “Hecla faced significant challenges in 2011; however, what is different today than at any other time in our history is that our financial position, asset base, and growth opportunities are the strongest they have ever been,” said Hecla’s President and Chief Executive Officer, Phillips S. Baker, Jr.

Shares of Kraft Inc. (NYSE:KFT) edged .80 percent higher in morning trading.  The food company reported fourth quarter net earnings of $830 million (47 cents per share), compared to $540 million (31 cents per share) a year earlier.

Investor Insights:

Kraft Earnings: Breaking Up is Expensive.
Google’s Schmidt Could Net Billions from Stake Cut.
Food Inflation Hits Consumers in the Wallet and Stomach.

Wal-Mart, Home Depot, Weatherford, URS, Macy’s Attract Trading Interest Feb. 21st

Wal-Mart Stores, Inc. (NYSE:WMT): Internal documents from Barnes & Noble (NYSE:BKS) appear to point to the upcoming launch of a Nook 8GB Tablet that may be priced at a lower price point to better compete against Amazon.com’s (NASDAQ:AMZN) Kindle Fire, according to The Verge. Wal-Mart (NYSE:WMT) will be offering the new device starting February 22, the report noted. Shares of Wal-Mart Stores, Inc. are trading 3.99% lower today.

The Home Depot, Inc. (NYSE:HD): Sees 2012 total sales up about 4% from 2011 sales of $70.4B. Consensus $69.89B. Shares of The Home Depot, Inc. are trading 1.35% higher today.

Weatherford International Ltd. (NYSE:WFT): As a result of the foregoing adjustments, the Audit Committee of our Board of Directors concluded, on Feb. 20, that investors should no longer rely upon our previously issued financial statements. The company expects to file the restated financial statements due to errors relating to the company’s reporting of the provision for income taxes. The Audit Committee has discussed this matter with the company’s independent registered public accounting firm. Until the restatement is completed, the company’s estimates of the expected adjustments for 2010 through 2008 and prior years, and the nine months ended Sept. 30, 2011, as well as its expected financial results for 2011, are subject to change. There can be no assurance that additional issues will not be identified during the course of the audit process and, therefore, these results should be considered preliminary until the company files its Form 10-K for the year ended Dec. 31, 2011. Shares of Weatherford International Ltd. are trading 12.09% lower today.

URS Corp (NYSE:URS): URS Corporation will acquire Flint for C$25.00 per share in cash, or C$1.25B. URS also will assume approximately C$225M in Flint debt. The transaction, which has been approved unanimously by the URS and Flint Boards of Directors, will significantly expand URS’ opportunities to serve clients in the oil and gas industry. The acquisition will be implemented through a court-approved Plan of Arrangement under Canadian law and is subject to the approval of Flint security holders, relevant regulatory approvals and other customary closing conditions. The transaction is expected to close in the second quarter of 2012, to be accretive to URS’ 2012 GAAP earnings, and to increase URS’ revenues from the oil and gas sector to approximately 22% of total revenues. Shares of URS Corp are trading 4.92% higher today.

Macy’s, Inc. (NYSE:M): Online sales positively affected the company’s same-store sales by 1.7 percentage points in the fourth quarter and 1.5 percentage points in fiscal 2011 as a whole. Shares of Macy’s, Inc. are trading 2.43% higher today.

High Demand Stocks Feb 21st: Dollar Thrifty, Medtronic, Corcept, Saks

Dollar Thrifty Automotive Group, Inc. (NYSE:DTG): Dollar Thrifty Automotive Group announced that its Board of Directors has approved an amendment to the Company’s shareholder rights plan, which was originally adopted May 18, 2011, and under which Dollar Thrifty shareholders will receive rights to purchase shares of a new series of preferred stock in certain circumstances. The Rights Plan was adopted to deter any attempt to obtain control of the company in a manner or on terms that are not in the best interests of the Company and all shareholders. Shares of Dollar Thrifty Automotive Group, Inc. are trading 2.22% higher today.

Medtronic, Inc. (NYSE:MDT): The company said, While this was a challenging quarter from a revenue perspective, I was encouraged by the management team’s ability to execute on delivering the bottom line. In addition, we have recently launched several new products including RestoreSensor, Solera 5.5 and 6.0 Spinal Systems, and now Resolute Integrity which should contribute to improved revenue performance…We remain optimistic that long-term growth should improve as we dramatically expand our global footprint and focus on delivering economic value as well as clinical value to our customers. Shares of Medtronic, Inc. are trading 2.43% lower today.

Corcept Therapeutics Incorporated (NASDAQ:CORT): BioLogic Equity believes the label for Corcept Therapeutics’ just approved Korlym presents a major commercial challenge for the company and reiterates a Sell rating on the stock. Shares of Corcept Therapeutics Incorporated are trading 51.49% higher today.

Saks Inc (NYSE:SKS): Comparable store inventory levels are expected to be up in the mid-single digit range throughout the year. The Company expects the gross margin rate for the full fiscal year to be modestly above the 40.8% rate achieved in 2011. The Company expects a relatively flat gross margin rate in the first half of the fiscal year and gross margin rate improvement in the second half of the fiscal year. Sees an effective tax rate of approximately 40.0% for the year. Sees FY CapEx $110M-$120M. Shares of Saks Inc are trading 1.66% higher today.

Market Recap: Dow Retreats After Reaching 4-Year High

Markets closed mixed on Wall Street today: Dow +0.12%, S&P +0.07%, Nasdaq -0.11%, Oil +2.37%, Gold +2.03%.

On the commodities front, Oil (NYSE:USO) rose to $106.06 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,760.90 an ounce while Silver (NYSE:SLV) rose 3.43% to settle at $34.43.

Hot Feature: Will Higher Gas Prices Derail the Recovery?

Today’s markets were mixed because:

1) Greece. Today’s initial gains were driven by progress made in Greece after weeks of negotiating ended early Tuesday with a deal that will provide Athens with the 130 billion euros in funding it needs to stave off default. But while the deal sparked a modest rally in the morning, investors had already largely priced in the all-but-certain conclusion.

2) Financials. Though the early rally dissipated in the afternoon, financial stocks stayed positive. Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Credit Suisse (NYSE:CS), Bank of America (NYSE:BAC), and Citigroup (NYSE:C) all closed up between 0.6 percent and 2 percent. Of the financial heavyweights, only JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) were in the red, the former dipping just below the break-even point in the last few minutes of trading.

3) Companies. Netflix (NASDAQ:NFLX) shares fell 3 percent after Comcast (NASDAQ:CMCSA) announced a new video streaming service for all of its cable subscribers, while Home Depot (NYSE:HD) got a boost after reporting fourth-quarter earnings and revenue that topped analysts’ expectations. Macy’s (NYSE:M) also reported better-than-expected earnings and sales that were in line with forecasts, while Wynn Resorts (NASDAQ:WYNN) shares climbed as much as 6 percent on reports that the company plans to buy out Japanese gambling tycoon Kazuo Okada’s 20 percent stake at a big discount.

BONUS: A Greener Apple

To contact the reporter on this story: Lindsey Grossman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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