Ultimate Market Recap: Merck Hits a High Note, Good Day For Facebook

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Monster Beverage Corp. (NASDAQ:MNST) will join the S&P 500 index  in place of Sara Lee Corp. (NYSE:SLE) effective after the market’s close on June 28. Hillshire Brands Co., Sara Lee’s “stub” trading on a when-issued basis, reported MarketWatch, will take Monster’s place when it joins the S&P MidCap 400 index. In addition, Sara Lee will spin off its global coffee and tea business to stockholders.

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Ryder (NYSE:R) cut its second quarter and full-year profit forecasts thanks to expectations for “a slower-demand environment to continue through 2012.” In addition to a commercial rentals slowdown, the company will also downsize its vehicles fleet. Revised projected earnings are now $0.90 to $0.95 for the second quarter, down from the previous $1.07 to $1.12 a share. For the year, Ryder set a forecast of $3.65 to $3.85 a share, less than the previous $4.02 to $4.12 a share range.

An Australian bidding war may be heating up between Rupert Murdoch and Kerry Stokes for the TV holding company CMH. Stokes’ Seven Group will make a 76 percent offer representing the stake it doesn’t own. News Corp. (NASDAQ:NWS) has previously already offered $2 billion for CMH, which its owner James Packer with his 50.1 percent share, had been ready to accept unless a better offer came along.

Friday’s anticipated ruling on American Airlines has been postponed until June 29. This will give the company more time to convince labor representatives to take voluntary cost cuts. Eventually a decision may open the door for layoffs and additional steps.

Daniel Rice, co-manager of BlackRock’s (NYSE:BLK) $4.4 billion of energy assets, is leaving the firm after rumors of possible conflicts of interest with his family’s private energy investments and the portfolios he managed for the firm, reported Reuters. In addition, the firm’s retiring Bob Doll is rumored to have based his fund models on others’ work, not his own alleged proprietary models.

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BUZZ After the Opening Bell: Bullish Facebook Analyst, Big Banks Ratings CUT

Despite a sharp sell-off across equities, Facebook (NASDAQ:FB) shares closed .76 percent higher and continued to gain this morning rising another 3% after the opening bell Friday. Nomura Securities initiated coverage on the social-media giant with a Buy rating and a $40 price target. Analyst, Brian Nowak, said, “We believe that Facebook’s industry-leading reach, engaged user base, and comprehensive user dataset will enable the company to continue to grow and take share in the display market. Uncertainties exist around FB’s ability to improve monetization; however, our analysis of strategies to improve results underscores the favorable risk/reward at current levels and the optionality for substantial long-term earnings upside as FB continues developing its still-young monetization model.”

After posting an 11.24 percent gain during regular trading, Arena Pharmaceuticals Inc. (NASDAQ:ARNA) shares climbed sold off over 5 percent in early trading today. The company’s anti-obesity lorcaserin drug recently received a 46 percent expected approval rate for the June 27 FDA decision. Should the drug receive approval, it will be the first weight loss prescription drug to enter the market in over a decade, reported InvestorPlace.

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Ryder System Inc. (NYSE:R) shares plummeted more than 10 percent in early trading. The company revised its second-quarter earnings estimates to 90-95 cents per share, compared to $1.07-$1.12 per share previously. It also expects “a slower demand environment to continue through 2012.”

Arch Coal Inc. (NYSE:ACI) shares were flat in early Friday trading. America’s second-largest coal producer plans to lay off more than 500 Kentucky miners in several counties, plus an additional 250 in West Virginia. “We regret this action; however it is a necessary step that we are forced to take in response to a difficult business environment,” the company said, according to the Associated Press.

Moody’s (NYSE:MCO) downgraded the debt ratings of 15 big banks late Thursday. However, the downgrades were largely expected and several banks such as Morgan Stanley (NYSE:MS), Bank of America Corp. (NYSE:BAC) and JPMorgan Chase (NYSE:JPM) climbed higher in early Friday trading.

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Noon RISERS: Exxon Mobil Bounces, GE’s Dividend Honors, Merck Very Healthy

Exxon Mobil Corp. (NYSE:XOM) shares gained .56% percent as of Friday at noon. The oil giant headed higher as crude oil prices rebounded 1 percent after falling 4 percent on Thursday. “It has been a long fall, driven by global economic slowdown and oil fundamentals such as weaker demand from China,” said Tony Machacek, oil futures broker at Jefferies Bache. “Technical indicators show the market is a little bit oversold, so there could be some short-covering around.”

General Electric Co. (NYSE:GE) shares climbed almost 1 percent higher at mid-day trading. The company has been named a Top 25 “Dividend Giant” by ETF Channel, with almost $8 billion worth of stock held by ETFs, according to Forbes. Shares currently yield a dividend just north of 3.4 percent.

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Despite receiving a downgrade from Moody’s (NYSE:MCO), shares of Morgan Stanley (NYSE:MS) jumped almost 2 percent after the opening bell and has since settled at being up 1% as of mid-day trading. The ratings agency downgraded the bank by two-notches, better than a possible third-notch downgrade that was on the table. Morgan Stanley responded, “We believe the ratings still do not fully reflect the key strategic actions we have taken in recent years.”

Merck & Co. Inc. (NYSE:MRK) shares climbed 1.70 percent higher at noon trading. The pharmaceutical company hit as high as $40.28 today, representing its highest level in more than two years.

Facebook Inc. (NASDAQ:FB) shares continue to rally. As of Friday at noon, the social-media firm jumped almost 3 percent. Nomura Securities recently initiated coverage on the social-media giant with a Buy rating and a $40 price target. Analyst, Brian Nowak, said, “We believe that Facebook’s industry-leading reach, engaged user base, and comprehensive user dataset will enable the company to continue to grow and take share in the display market.

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Sun Healthcare Group Inc (NASDAQ:SUNH): According to  Sabra Health Care REIT (NASDAQ:SBRA), its largest tenant, Sun Healthcare Group, has signed a definitive agreement in which is will be acquired by Genesis Healthcare. Sabra stated,  “We view the proposed acquisition of Sun by Genesis as a positive. Given the size of Genesis and its overall financial strength, we believe that the credit profile of our tenant base is improved. We expect to obtain a parent guaranty from Genesis to replace the existing Sun guaranty. Additionally, we expect the guaranty to include a tangible net worth covenant and expect to obtain an amendment to our master lease agreement with Sun to improve the annual rent escalators to a fixed 2.5% increase and to include cross-default provisions with Genesis’ term loan, all of which should improve the overall quality of our leases.” Shares of Sun Healthcare Group Inc are trading 0.06% higher today.

ConAgra Foods, Inc. (NYSE:CAG) reported an adjusted EPS 51c for Q4, consensus 50c, and a Q4 revenue at 3.41B, consensus $3.38B. According to executives, shoppers have been more frugal and have been eating more leftovers, which createds a difficult environment. Shares of ConAgra Foods, Inc. are trading 0.67% higher today.

Red Hat, Inc. (NYSE:RHT): Because of the Red Hat Enterprise Linux (RHEL) 6.3 release, Red Hat has made minor changes to the enterprise grade Linux distribution as a way to add new storage, virtualization, security, scalability, and performance capabilities. Shares of Red Hat, Inc. are trading 2.26% higher today.

Overland Storage, Inc. (NASDAQ:OVRL) has been downgraded by Benchmark Co. from Speculative Buy to Speculative Hold following an unfavorable ruling by the International Trade Commission this morning. The firm gives shares a $1.25 price target. Shares of Overland Storage, Inc. are trading 6.2% lower today.

Sprint (NYSE:S): As all have been in the past, the new HTC Evo 4G LTE will be exclusive  to Sprint, and it will have the most powerful Evo iteration in the history of the line. This is one of the first Sprint handsets to deliver Android’s 4.0 Ice Cream Sandwich (NASDAQ:GOOG) operating system out-of-the-box. It also provides a sizable high-resolution screen, a speedy processor, and Beats Audio package. The retail price of the Evo 4G LTE has been reduced by Sprint to $129 on contract. Shares of Sprint are trading 1.89% higher today.

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Burger King Worldwide Inc. (NYSE:BKW): After it completed a merger with a company which was co-founded by William Ackman, Burger King Worldwide Inc. has advanced in its return to the New York Stock Exchange on Wednesday. Shares of Burger King Worldwide Inc. are trading 2.27% higher today.

Celgene Corporation (NASDAQ:CELG) was issued delays in its attempts to expand its Revlimid label. The company had hoped to gain approval in the EU for the drug as a fron-line maintenance therapy used to treat patients with multiple myeloma, MM, but Celgene has withdrawn its marketing application. Celgene added the new drug application (MDA) for pomalidomide which treats patients with relapsed and refractory MM has been accepted by the FDA. The FDA should announce its final decision by February 10, 2013. Celgen also seeks European approval for pomalidomide. Shares of Celgene Corporation are trading 2.52% higher today.

Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX): Late Wednesday, the FDA panel supported Onyx’s Kryprolis, or carfilzomi, intended for patients suffering from relapsed and refractory multiple myeloma who have been through a minimum of two prior forms of therapy. The FDA tends to follow the advice of its panel. Shares of Onyx Pharmaceuticals, Inc. are trading 3.68% higher today.

CarMax, Inc (NYSE:KMX): According to BGB Securities, the reasons for CarMax’s low Q1 results should be temporary, and the sell-off in shares yesterday signifies a buying opportunity for long-term investors. The firm gives a Buy rating and a $37 price target on the stock. Shares of CarMax, Inc are trading .95% lower today.

Bed Bath & Beyond Inc. (NASDAQ:BBBY): Although Bed Bath & Beyond shows a weak outlook, analysts predict that the long-term bull case is intact, says Barron’s. This is based on the class-leading merchandising, execution, square footage growth opportunities, share gains via traffic increases, organic operating margin gain opportunities, and free cash flow generation of the company. According to Raymond James analyst Budd Bugatch, who gives the company a Strong Buy rating, shares could increase about 38% reaching $85. Shares of Bed Bath & Beyond Inc. are trading 0.16% higher today.

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Apple Inc. (NASDAQ:AAPL): According to Samsung Mobile UK, anyone purchasing a Samsung Galaxy device will get Easy Phone sync for free. Easy Phone Sync is a new, simple manner in which to transfer all media from  Apple’s (NASDAQ:AAPL) iPhone and iTunes; including music, video, podcasts, pictures, contacts, and text messages; to any Samsung Galaxy device including the new Galaxy S III. Shares of Apple Inc. are trading 0.13% lower today.

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Facebook, Inc. (NASDAQ:FB) has increased efforts toward newer, innovative products by making former Apple Inc. UI design manager, Chris Weeldreyer, Facebook’s product manager. This surprises many since there no one was aware of a vacancy in the position, making it appear as a poacher’s game. This move indicates that Facebook may be looking to capitalize on Weeldreyer’s skills. Shares of Facebook, Inc. are trading 4.21% higher today.

AT&T, Inc. (NYSE:T) gained further positive commentary from Oppenheimer analysts Friday. Because of its recent meeting with management, the firm reiterated its Outperform rating and raised its price target to $40. This indicates a 14% upside to the stock’s $35.03 Thursday closing price. Shares of AT&T, Inc. are trading 0.23% higher today.

Bank of America (NYSE:BAC): Since last summer, Credit spreads for major banks have been expanding, which indicates that much of Moody’s downgrade is catch up from last year. Shares of Bank of America are trading .51% higher today.

Nokia Corporation (NYSE:NOK) sees a 41% slash to its projected sales for 2013, by Nomura Holdings Inc. analysts as a result of Microsoft’s  (NASDAQ:MSFT) announcement that its Windows 8 Pro mobile operating system will not support Nokia’s Lumia phones. Nomura analysts explains,  “An abandoned strategy in feature phones combined with an apparent increase in competitive pressures, in Windows Phone, lead us to cut revenue estimates that the recent restructuring announcement does not fully offset.” This adds to the former cell phone market leader’s problems. Shares of Nokia Corporation are trading flat today.

HOT Radar Stocks: Facebook Extends Winning Streak, Major Banks RALLY

Facebook (NASDAQ:FB) shares edged slightly lower in late trading, but managed to close nearly 4 percent higher on Friday. The social-media giant currently has a three-week winning streak since hitting as low as $25.52 earlier this month. Reuters reported on Friday that Facebook has begun showing ads on Zynga Inc.’s (NASDAQ:ZNGA) website. It is the first time the company has distributed ads beyond its own website.

Darden Restaurants Inc. (NYSE:DRI) shares fell .35 percent in extended trading. The company announced on Friday that net income for the fourth-quarter increased to $151.2 million ($1.15 per share), compared to $137.5 million (99 cents per share) a year earlier. However, revenue only increased 3.8 percent to $2.07 billion, missing estimates of $2.11 billion. “Earnings growth for the fourth quarter represents a solid finish to a challenging fiscal year,” said Clarence Otis, Chairman and Chief Executive Officer of Darden. “The double-digit percentage growth in diluted net earnings per share we achieved for the quarter and for the second half of the fiscal year are testaments to the strength of our business model.

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Google Inc. (NASDAQ:GOOG) shares closed more than 1 percent higher during regular trading, but gave back some gains after the closing bell. Sources tell GigaOm that the internet search king will likely launch a cloud infrastructure platform at the company’s I/O conference next week.

Despite downgrades across the board by Moody’s (NYSE:MCO), several major banks climbed higher on Friday. Bank of America Corp. (NYSE:BAC) and Morgan Stanley (NYSE:MS) both climbed more than 1 percent. The ratings agency downgraded MS by two-notches, better than a possible third-notch downgrade that was on the table. Morgan Stanley responded, “We believe the ratings still do not fully reflect the key strategic actions we have taken in recent years.”

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