Ultimate Market Recap: Julius Baer’s Big Job Cuts, Questcor Climbing

Radar Movers: Netflix Attracts Attention on Upgrade, Facebook Edges Lower

Shares of Facebook (NASDAQ:FB) closed 2.44 percent in the red on Monday, and continue to edge lower in early trading today. The company received a downgrade to Sell from Neutral by BTIG with a price target of $16. BTIG explains, “We see a growing tension between the Facebook user experience and monetization, particularly as the collapse of payment revenues has left Facebook with only one major lever to pull – advertising.”

Intel (NASDAQ:INTC) shares are down over 1 percent in early trading. The company received a downgrade from Bernstein to Underperform from Market Perform with a price target of $20 a share. Previously, Bernstein had a price target of $24 on Intel shares.

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Netflix (NASDAQ:NFLX) shares jumped more than 10 percent on Monday, but are backsliding this morning. Morgan Stanley (NYSE:MS) analyst Scott Devitt raised his rating on Netflix to Overweight from Equal-Weight with a price target of $85, citing that the Wall Street is giving to much credit to Amazon.com’s (NASDAQ:AMZN) streaming services. “We believe the primary driver of content revaluation was Netflix’s own success,” he writes in a research note.

Marathon Oil (NYSE:MRO) is attracting attention on news the company will purchase BP’s (NYSE:BP) Texas City refinery, one of the biggest in the country. The Associated Press reports, “The total value of the deal could reach $2.5 billion. The refinery was the scene in 2005 of a fatal fire and explosion. Marathon will pay only $598 million for the refinery itself and other nearby pipelines and fuel terminals. It will pay $1.2 billion for the plant’s inventory of oil and petroleum products. Marathon may have to pay another $700 million over 6 years if certain unspecified conditions are met.”

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Rio Tinto Plans Cost Reductions and 4 Hot Stocks Seeing Action Today

Rio Tinto Plc (NYSE:RIO): As the volatile short-term environment continues, Rio Tinto has intentions to continue its cost reductions, mainly regarding operating, evaluation, and sustaining capital costs across the entire business. The company’s drive for the reduction of service and support costs has currently saved $500 million a year. The total annual capital expenditure on projects that have already been approved will likely peak in 2012, but the short-term macroeconomic outlook continues to be volatile. Chinese economic growth continues to be robust but moderating and is slow and uneven in developed economies. Rio Tinto believes that China’s stimulus packages will be effective progressively following the Chinese leadership change, influencing it to reduce its estimates for Chinese GDP growth for the year to being slightly shy of eight percent. Iron ore prices saw a recovery to some extend following a period of sharp decline, but the firm believes that they will continue to be volatile in the near future. Rio Tinto’s copper production will likely rise from 2013 due to better grades and investments at Kennecott and Escondida along with the beginning of production from the Oyu Tolgoi mine in Mongolia. From 2011 to 2015, Rio Tinto believes it will achieve a cumulative annual growth rate reaching 13 percent for copper.

Bank of America (NYSE:BAC): On Tuesday, Swiss bank Julius Baer announced that it will cut nearly 1,000 jobs for cost reduction. In August, Julius Baer and Bank of America Merrill Lynch reached a deal for the purchase of its private banking operations outside the United States and Japan for a total of about $880 million. As part the company’s business integration plans, Julius Baer stated that it now plans to cut the bank’s combined 5,700 work force by 15 to 18 percent.

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Facebook, Inc. (NASDAQ:FB): Twitter.com CFO, Ali Rowghani, faces the challenge of taking the company in the direction of an IPO. Although there is not set timetable, Twitter will likely be the most prominent consumer-Web company making a market debut since Facebook on May 17, and everyone knows how that debacle resulted in Facebook’s value being reduced to half. Rowghani will have to place Twitter’s price high enough for the funding Twitter finds necessary without placing the valuation too high than it deserved, according to Bloomberg.

AT&T, Inc. (NYSE:T) and IBM (NYSE:IBM) announced a business agreement under which they are to deliver a highly secure, first-of-its-kind “network-enabled” cloud service using private networks instead of the public Internet. The companies intend to combine AT&T virtual private networking and IBM SmartCloud Enterprise+ cloud capabilities along with new technology from AT&T Labs for the development of a new, fast, and highly-secure shared cloud service. Targeted toward Fortune 1000 companies worldwide, the service will is to be offered during the beginning of 2013 as a powerful new option for clients deploying cloud solutions demanding high levels of security and availability. Often, businesses cite security as the main thing inhibiting cloud computing adoption.

Nokia Corporation (NYSE:NOK): A Business Insider report claims thatVerizon (NYSE:VZ) may be preparing a version of Nokia’s Lumia 920, codenamed “Atlas”.

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Apple iPad Mini Photos Leaked and 4 Hot Stocks Moving the Market

Apple Inc. (NASDAQ:AAPL):  According to CNET, A 9 to 5 Mac researcher posted new alleged photos of Apple Inc.’s rumored iPad Mini to his Twitter and Instagram accounts and though the authenticity of the pictures is unverified they look inline with previous reports.

Alcoa, Inc. (NYSE:AA): According to Bloomberg, Alcoa, Inc., hurt by the decline of aluminum prices, would unlock 63% in added value for shareholders by breaking itself up. The company plans on releasing their third quarter results today, after the United States market closes. They have fallen about 50% in the past 18 months as aluminum prices dropped to a nearly three year low.

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Questcor Pharmaceuticals, Inc. (NASDAQ:QCOR):  After the company disclosed in a regulatory filing earlier today that patients with “serious, difficult-to-treat medical conditions” continue to have access to the company’s Acthar drug “through commercial insurance, Medicare, Medicaid and other government programs,” Questcor Pharmaceuticals, Inc. is climbing. Concerns about insurance coverage of Acthar had been raised after health insurance giant Aetna (NYSE:AET) decided last month that Acthar gel is either unnecessary or experimental in most cases. Meanwhile, Questcor reported that last month there were 105-110 paid prescriptions of Acthar for patients with Nephrotic Syndrome and 400-410 paid prescriptions of the drug for patients with Multiple Sclerosis. In a note to investors earlier today research firm Jefferies upgraded Questcor to Buy from Hold with a $28 target, reversing their downgrade to Hold on September 20. The firm believes that the stock’s valuation before today’s trading implied that no insurer would cover Acthar for NS and MS patients. After speaking with several payer representatives, however, the firm believes that insurers are likely to provide some coverage of Acthar for NS patients. In early trading, Questcor shares rose $1.49, or 7.34%, to $21.78.

Owens Corning (NYSE:OC):  The company previously disclosed late second-quarter weakness in the United States roofing shingle market which persisted early into the third quarter. While there was some improvement through most of that quarter, shipments weakened following a mid-September price increase and are not expected to improve for the remainder of year. As a result, the company has lowered their roofing revenue outlook for the full-year, now estimated to be approximately $2 billion.

Chevron Corp. (NYSE:CVX):  Fluor Corporation (NYSE:FLR) announced that Shell (RDS.A) selected them as the engineering procurement and construction contractor for their carbon capture facility at their flagship Carbon Capture and Storage Quest project at the Athabasca Oil Sands project in Alberta, Canada. The Quest project is being built on behalf of the Athabasca Oil Sands Project joint venture owners who include Shell, Chevron Corp., and Marathon Oil (NYSE:MRO), with support from the Canadian and Alberta governments. Fluor booked the undisclosed contract value in the third quarter.

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Afternoon Buzzers: Google to Challenge Apple With 10-inch Tablet, Netflix Downgraded

Shares of Netflix (NASDAQ:NFLX) declined more than 7 percent after running up significantly over the past couple weeks. Bank of America (NYSE:BAC) downgraded shares to Underperform from Buy, with a price target of $72 per share. The firm explains, “With the stock increasing 31 percent over the past two-weeks, we now believe the risks outweigh the reward heading into Q3. We see net additions significantly below estimates as the biggest risk to the stock.”

Apple (NASDAQ:AAPL) shares edged lower Tuesday after reports indicating that Google (NASDAQ:GOOG) is teaming up with Samsung to offer a 10-inch tablet. “It’s going to be a high-end device,” explains Richard Shim, an analyst at NPD DisplaySearch, according to CNET. “They’ll partner with Samsung and co-brand it with Samsung,”

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Facebook (NASDAQ:FB) shares fell over 1 percent this morning. The company has proposed a $20 million settlement in a class action lawsuit accusing the social network of violating users’ rights with its “Sponsored Stories” advertising feature. The offer was revised upward after a U.S. judge rejected an earlier agreement.

Shares of Research in Motion (NASDAQ:RIMM) fell more than 4 percent on Tuesday. Jefferies’ analyst Peter Misek believes the BlackBerry 10 will not launch until March. “We had hoped for a January launch but now see a March launch as more likely,” he writes in a research note. That would be another setback for the already struggling company and result in no sales of the next generation phones in the February quarter. “Also, our checks point to a tough November quarter, with replenishment rates decreasing as channel partners are cautious on holding RIM inventory.”

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Wall St. Brief: Cisco Ends 7-Year Partnership, Alcoa Earnings on Deck

Alcoa (NYSE:AA) will report its earnings after the bell on Tuesday with analysts forecasting its third-quarter earnings per share falling to $0.01 from $0.15 from the previous year with revenue declining 13.2 percent to $5.57 billion. Since Alcoa is seen as a barometer for global manufacturing, FactSet noted its numbers are a good indicator for upcoming S&P 500 results. When Alcoa missed consensus in 2009, 72.4 percent of component companies followed by exceeding profit estimates.

Cisco (NASDAQ:CSCO) ended a seven-year partnership with ZTE after an investigation into the company for illegally selling equipment to Iran, that included Cisco switches and a telecom surveillance system. ZTE had been “reasonably successful” in reselling the Cisco products in China. On Monday, ZTE and Huawei Technologies Co. had been accused of posing a security threat to the U.S. Both companies have denied the allegations.

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September sales for Japanese automakers in China have painted a picture of how the East China Sea islands conflict is affecting business. Toyota’s (NYSE:TM) sales in the country tanked 48.9 percent year over year, Honda’s (NYSE:HMC) fell 40.5 percent and Nissan’s (NSANF.PK) dove 35.3 percent; Suzuki’s (SZKMF.PK) shipments to dealers declined 42.5 percent.

Barclays (NYSE:BCS) will acquire ING Direct U.K. and assume its deposits of BP 10.9 billion and mortgages of  BP 5.6 billion. It will also add  1.5 million customers and 750 employees. As of August 31, the mortgage book has a loan-to-value ratio of 50 percent with Barclays paying a 3 percent discount but purchasing the deposit book at par. From the sale, ING (NYSE:ING) will take a EUR 320 million after-tax loss.

From the break up of its Sears Hometown and Outlet Stores, Sears (NASDAQ:SHLD) should earn $346.5 million after its rights offering was fully subscribed. Sears will receive an additional $100 million from a special cash dividend before the separation. The new company will trade on Nasdaq with the symbol SHOS beginning on Oct. 12. and will operate 944 Sears Hometown Stores, 96 Sears Hardware Stores, and 76 Sears Home Appliance Showrooms.

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