Ultimate Market Recap: Libor Scandal Impact, Wells Fargo’s Winning Report

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Wall St. Brief: JPMorgan Faces $22B PENALTY, P&G Mulls CEO DISMISSAL

JPMorgan (NYSE:JPM) will restate its first quarter numbers from its CIO trading losses and cut net income by $459 million. The news came as the bank reported its second quarter earnings. This included a pretax loss from the CIO trades at $4.4 billion, lower than the estimated $9 billion. Second quarter earnings per share dropped to $1.21 from $1.27, while revenue fell to $5 billion from $5.4 billion; both beat estimates.

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The Libor scandal could affect 12 associated global banks and see a combined $22 billion in regulatory penalties and damages to investors and counterparties, estimated Morgan Stanley (NYSE:MS). The figure does not include the possible repercussions from U.S. and EU investigations; this could tag on billions of dollars in fines.

Procter & Gamble’s (NYSE:PG) board is mulling over the dismissal of CEO Robert McDonald as the directors are dissatisfied with his performance, reported Bloomberg. They have started a job search by speaking with former executives about the position. The board’s discussions affected activist investor Bill Ackman’s decision to take a large share in P&G; he reportedly will make calls for management changes.

Vivendi (VIVHY.PK) Chairman Jean-Rene Fourtou confirmed Bloomberg reports that the company may sell its 61 percent Activision (NASDAQ:ATVI) stake even with a lack of potential suitors. Microsoft (NASDAQ:MSFT) and Disney (NYSE:DIS) have shown no interest, while China’s Tencent (TCEHY.PK) and Japan’s Nexon lack enough money for a purchase.

On Tuesday, a Senate panel will share the details of HSBC’s (NYSE:HBC) role in the laundering fund both for or in Cuba, Iran and Mexico as well as additional countries. HSBC execs will testify and this will include legal chief Stuart Levey; he was a former top Treasury official for terrorism and finance.

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Wells Fargo & Company CREDIT QUALITY and 4 Hot Stocks Making Waves

Wells Fargo & Company (NYSE:WFC) Chief Risk Officer Mike Loughlin states that credit quality trends are showing improvement in Q2 along with net loss reductions, nonperforming assets, nonaccrual loans, and loans more than 90 days past due and still accrueing. Loughlin states, “Credit performance over the past two years has steadily improved and the second quarter results continued that trend. Absent significant deterioration in the economy, we expect continued but more modest improvement for the remainder of the year, and we continue to expect future reserve releases in 2012.” Shares of Wells Fargo & Company are trading 3.04% higher today.

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Quest Diagnostics Inc. (NYSE:DGX): According to Morgan Stanley, the positive trial results regarding Merck’s (NYSE:MRK) osteoporosis drug Odanacatib is also a benefit for Quest, but share strenght is overdone. The firm gives an Equal Weight rating on shares of Quest Diagnostics Inc. Shares of Quest Diagnostics Inc are trading 0.24% lower today.

Woori Finance Holdings Co., Ltd. (NYSE:WF): With December’s presidential election near, political motivation to push through a deal for the sale of Woori will probably be in short supply. The ruling party’s members requested that the government place the plan on the back burner in hopes of avoiding conflict prior to the election. The odds of a deal to sell Woori this year are slimming, and to taxpayers, this indicates little prospect of seeing the remaining amount of the total 12.8 trillion won, or $11.1 billion, which was put into Woorie in 2001. Shares of Woori Finance Holdings Co., Ltd. are trading 0.37% higher today.

Piedmont Natural Gas Company Inc. (NYSE:PNY) shares are trading 0.09% lower today.

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Afternoon BUZZERS: JPMorgan Reports $4.4 Billion LOSS, Lexmark and Vivus DROP

JPMorgan Chase (NYSE:JPM) shares are up 5.93 percent this afternoon. The bank reported a pretax loss from the “London Whale” chief investment office of $4.4 billion, lower than the $5 billion to $7 billion whisper number. Second-quarter earnings came in at $1.21 per share, compared to $1.27 a year earlier. However, JPMorgan Chase will restate its first quarter numbers from its CIO trading losses and cut net income by $459 million. Other banks such as Morgan Stanley (NYSE:MS) and Bank of America (NYSE:BAC) also climbed higher.

Shares of Wells Fargo (NYSE:WFC) have gained 3.23 percent today. The nation’s largest mortgage lender reported second-quarter earnings of 82 cents per share, compared to 70 cents per share a year earlier. “Wells Fargo’s strong financial results this quarter again reflect the benefit of our diversified business model,” Chief Executive John Stumpf said in a statement. However, expenses totaled $12.4 billion and the bank said it would not meet its goal of reducing costs to $11.25 billion by the fourth-quarter.

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Apple Inc. (NASDAQ:AAPL) shares gained 0.94 percent on Friday. Needham & Co. analyst Charlie Wolf on Thursday substantially raised his earlier estimate of iPad sales in the June quarter, predicting a record 20 million unit sales for the tablet rather than his earlier guess of 13.5 million. Wolf wrote in a note to investors that his initial estimate made in April had been “hastily formulated.”

Lexmark International Inc. (NYSE:LXK) shares have dropped 15.30 percent today. Due to weaker-than-expected demand in Europe, the company reduced its second-quarter earnings outlook to 53-55 cents, down from 65-75 cents per share. The company explained, “This revised second quarter outlook reflects a weaker than expected demand environment, particularly in Europe, and a larger than expected impact from unfavorable changes in currency exchange rates.”

Vivus (NASDAQ:VVUS) shares declined 1.38 percent today. The company remains in focus ahead of a highly-watched decision. On July 17, Vivus awaits word from the FDA on its diet pill Qnexa. The approval decision was originally expected in April, but was delayed until next week. If approved, it would become the second weight-loss pill to be approved by the FDA this year. Last month, Arena Pharmaceutical (NASDAQ:ARNA) won approval for its Lorcaserin drug that affects an area of the brain that helps people eat less and feel full after eating only small amounts of food.

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Lexmark RETREATING and 4 Must-See Hot Stocks

Lexmark International Inc (NYSE:LXK): After reducing its second quarter earnings per share and revenue outlook, printer maker, Lexmark International Inc. (NYSE:LXK) is retreating. The company blamed currency fluctuations as well as weaker than expected demand, particularly in Europe, for the reduction of  its profits. They expect the same factors to negatively affect their results in the second half of 2012. In addition, Lexmark  predicted that it will report a second quarter adjusted EPS of 87c-89c, down from its previous guidance of 95c-$1.05. This adjusted EPS excludes restructuring and acquisition-related adjustments. In early trading, Lexmark sank 7.82% to 422.41, and their shares are presently trading at 15.26% lower. Lexmark is not alone in this downward trend, Xerox (NYSE:XRX) has retreated at 1.62% to $7.28 and Hewlett-Packard (NYSE:HPQ) has also lost value at 2.12% to $18.94.

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JPMorgan Chase & Co. (NYSE:JPM):  JPMorgan (NYSE:JPM) has issued a first quarter earnings restatement that said, “Recently discovered information raises questions about the integrity of the trader marks, and suggested that certain individuals may have been seeking to avoid showing the full amount of the losses being incurred.”Three employees, Achilles Macris, Javier Mertin-Artajo, and Bruno Iksil, (NYSE:JPM), have been stripped of their trading duties, and are now off the payroll, as they are at the center of the Chief Information Officer’s trading blunder, they have since left the bank.  JPMorgan (NYSE:JPM) will restate their first quarter results, cutting their net income by $459M, due to loss of their CIO.  Shares of JPMorgan Chase & Co. are trading at  5.49% higher today.

SUPERVALU INC. (NYSE:SVU):  UBS (NYSE:UBS) said that shares of grocery sales from U.S. supermarkets are down from 66% to 51%. This decline, according the Wall Street Journal, is because Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) chains have started using food to attract customers. Shares of SUPERVALU INC. are trading 8.18% lower today.

Safeway Inc. (NYSE:SWY):  Though big box retailers like Wal-Mart and Target have successfully grabbed their market share and caused difficulty for many grocery stores, they too, are feeling the pressure from the high-end Whole Food Markets and the low-end discount chains and warehouse clubs. Shares of Safeway Inc. are trading 1.72% higher today.

American Realty Capital Trust Inc. (NASDAQ:ARCT):  The company sports a 6.5 % dividend yield, as well as a 100% occupancy ratio. Though the sale-leaseback concept is not a new idea, Cramer said that it has become incredibly popular because it gives “domestic security” and pays a dividend. He also suggested that this type of business model, is just what investors should be looking for.  Shares are trading at 0.74% higher today.

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Bank of America (NYSE:BAC): Twelve global banks are publicly tied to the Libor scandal and could face up to $22 billion in combined regulatory penalties as well as damage to investors and counterparties, estimates Morgan Stanley, who admitted to being “crude.” This calculation does not include the possible fallout from continuing investigations by the U.S. and the EU cartel, which may possibly result in multibillion dollar fines. Shares of Bank of America are trading 4.48% higher today.

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Apple Inc. (NASDAQ:AAPL): As of June, 51 percent of subscribers with smartphones owned devices running on Google’s (NASDAQ:GOOG) Android operating system, 34 percent owned Apple’s iPhone, and 9 percent owned  RIM’s  (NASDAQ:RIMM) Blackberry, reports 9to5Google citing Nielsen figures. Slightly over 10 percent of smartphone subscribers owned devices using Microsoft (NASDAQ:MSFT) operating systems. Shares of Apple Inc. are trading 1.19%  higher  today.

Facebook, Inc. (NASDAQ:FB): A BBC investigation indicates that companies are throwing away money on adverts allowing them to gain “likes” from members of Facebook who are not really interested in their product. It also seems that a number of account holders clicking on links lied about personal details. According to a security expert, some profiles seem to be “fakes” run by computer programs in order to spread spam. Facebook claims is has “not seen evidence of a significant problem.”  Shares of Facebook, Inc. are trading 0.13% lower today.

AT&T, Inc. (NYSE:T) and Verizon Wireless Q2 profit margins are predicted to be boosted by lower iPhone activations within the second quarter. Shares of AT&T, Inc. are trading 1.06% higher today.

Nokia Corporation (NYSE:NOK) intends to close two Chinese regional sales offices as well as lay off an not yet revealed number of its staff as it reorganizes, the Wall Street Journal reports. These closures are the company’s sales offices located in  Chengdu and Shanghai. Shares of Nokia Corporation are trading 2.13% lower today.

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Was Friday the 13th LUCKY for These 5 Stocks?

JPMorgan Chase (NYSE:JPM) shares closed nearly 6 percent higher on Friday. America’s largest bank by assets reported a pretax loss from the “London Whale” chief investment office of $4.4 billion, lower than the $5 billion to $7 billion whisper number. Second-quarter earnings came in at $1.21 per share, compared to $1.27 a year earlier. However, JPMorgan Chase will restate its first quarter numbers from its CIO trading losses and cut net income by $459 million.

Facebook (NASDAQ:FB) shares finished the week on a quiet note. The social-media giant closed 0.29 percent lower today, as a recent BBC report suggests companies are wasting money on Facebook advertisements that are meant to gain “likes” from members.

Wells Fargo (NYSE:WFC) also received a boost from earnings today. The nation’s largest mortgage lender reported second-quarter earnings of 82 cents per share, compared to 70 cents per share a year earlier. “Wells Fargo’s strong financial results this quarter again reflect the benefit of our diversified business model,” Chief Executive John Stumpf said in a statement. However, expenses totaled $12.4 billion and the bank said it would not meet its goal of reducing costs to $11.25 billion by the fourth-quarter.

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Friday the 13th was unlucky for Lexmark International (NYSE:LXK). Shares finished the day down 16.25 percent, representing fresh multi-year lows. Due to weaker-than-expected demand in Europe, the company reduced its second-quarter earnings outlook to 53-55 cents, down from 65-75 cents per share. The company explained, “This revised second quarter outlook reflects a weaker than expected demand environment, particularly in Europe, and a larger than expected impact from unfavorable changes in currency exchange rates.”

Despite the broad market rally, Vivus Inc. (NASDAQ:VVUS) shares declined 2.06 percent on Friday. The company remains in focus ahead of a highly-watched decision. On July 17, Vivus awaits word from the FDA on its diet pill Qnexa. The approval decision was originally expected in April, but was delayed until next week. If approved, it would become the second weight-loss pill to be approved by the FDA this year. Last month, Arena Pharmaceutical (NASDAQ:ARNA) won approval for its Lorcaserin drug that affects an area of the brain that helps people eat less and feel full after eating only small amounts of food.

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