Ultimate Market Recap: News Corp. Makes Split Decision, RIM Looking Rough

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Early Movers: Facebook SINKS, Arena REVERSES

Shares of Facebook (NASDAQ:FB) closed 2.63 percent in the red on Wednesday, and continued to decline in pre-market trading on Thursday. Lead underwriters of the social media company began publishing comments on Wednesday. Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) rated Facebook as a Buy, but Bank of America (NYSE:BAC) and Citigroup (NYSE:C) remained Neutral on shares.

Arena Pharmaceuticals Inc. (NASDAQ:ARNA) shares surged more than 28 percent in regular trading on Wednesday, but is trading lower this morning as hysteria calms over the company having won approval by the Food and Drug Administration for its weight-loss drug lorcaserin. It is the first obesity medication cleared for sale in the United States in 13 years. “Obesity threatens the overall well being of patients and is a major public health concern,” Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research, said in a statement, according to Bloomberg. “The approval of this drug, used responsibly in combination with a healthy diet and lifestyle, provides a treatment option for Americans who are obese or are overweight and have at least one weight-related comorbid condition.” Read More.

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Quinstreet Inc. (NASDAQ:QNST) shares fell 1.82 percent in extended trading hours yesterday. The company agreed to pay $2.5 million to 20 states and turn over its G.I. Bill website after being accused of preying on veterans for their education benefits. QuinStreet, an Internet marketing and media company, called the agreement a “significant step forward in helping to clarify expectations for school advertising online, and for related website design and content,” according to the Washington Post.

Shares of Chipotle Mexican Grill Inc. (NYSE:CMG) dropped 5.69 percent on Wednesday and continued to stumble in early trading on Thursday. Research broker ITG projected below-consensus second-quarter revenue for the restaurant operator. The firm also said Chipotle’s sales look to be decelerating, but is “still experiencing industry-leading growth.”

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Market Wrap: Markets RALLY, Arena Makes HISTORY, Apple BEATS Samsung

Markets closed up on Wall Street on Wednesday: Dow +0.74%, S&P +0.90%, Nasdaq +0.74%, Oil +0.27%, Gold -0.23%.

On the commodities front, Oil (NYSE:USO) rose to $80.43 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) fall to $1,575 an ounce while Silver (NYSE:SLV) increased 0.16% to settle at $26.88.

Here’s your Cheat Sheet to Wednesday’s top stock stories:

Arena Pharmaceuticals (NASDAQ:ARNA) scored a major victory yesterday, winning the Food and Drug Administration’s approval of its weight-loss pill locrcaserin, which with the decision becomes the first obesity medication cleared for sale in the U.S. in 13 years. Trading was halted following the news, but after resuming, shares jumped more than 28 percent.

Apple (NASDAQ:AAPL) was grinning after a U.S. court banned sales of Samsung’s Galaxy Tab 10.1 tablet while it decides on a patent dispute between the two companies. Apple has claimed that Samsung infringed its design patent for the iPad by copying its look with the Galaxy Tab, which is considered by most analysts to be the iPad’s biggest rival.

Entropic Communications Inc.’s (NASDAQ:ENTR) shares rallied more than 28 percent after the company increased its second-quarter adjusted earnings estimate to $0.08 cents per share from the prior $0.03 cents thanks to better-than-expected results from its connectivity product line. Analysts had estimated adjusted earnings of $0.03 cents per share.

Amarin Corp.’s (NASDAQ:AMRN) shares rose 8.6 percent. This came after Jefferies & Co. analysts kept its “Buy” rating on the stock Tuesday and noted that a recent patent ruling may give more protection for the company’s AMR101 formulation.

Omeros Corp. ‘s (NASDAQ:OMER) shares dropped 20 percent after a Seattle company did a common stock offering. The company didn’t give details of the stock sale size but it is intended to raise money for its two Phase III clinical development studies, reported MarketWatch.

Wall Street Morning Brief: JPMorgan’s Trading Loss SPARKS CONTROVERSY, News Corp’s BIG Decision

JPMorgan’s (NYSE:JPM) trading loss could reach $9 billion, reported the New York Times. The red ink has been growing as the company had been quickly trying to to get out of the losing positions. It now appears that CEO Jamie Dimon was off in May with his warnings that the initial $2 billion loss could double in the upcoming quarters. JPMorgan is expected to give more details in its July 13 earnings report.

Don’t Miss: Early Movers: Facebook SINKS, Arena REVERSES.

Barclays’ (NYSE:BCS) shares were off 8.6 percent in premarket trading from its $452 million settlement over Libor fixing. The settlement will give an immediate credibility to lawsuits around the world against banks for purchasing financial instruments from manipulated rates. The figures could be high as Libor prices affect almost everything rate-related. Over in the U.K., politicians have asked for Barclays CEO Bob Diamond to step down, reported the BBC.

News Corp.’s (NASDAQ:NWS) board approved a plan to divide the company in two publicly-traded entities, reported the Wall Street Journal. This will separate the entertainment operations from the publishing business with two class of shares, Class A and Class B. The split will be completed in about a year and in the end, Rupert Murdoch will be the chairman of both companies and chief executive of the media and entertainment company, reported MarketWatch. Chase Carey will become the president and chief operating officer of the media and entertainment company.

Vodafone (NASDAQ:VOD) has also undergone some reorganization by dividing its European operations into two groups: Northern and Central Europe and Southern Europe. The company appointed Philipp Humm as its CEO of the northern division after his exit from T-Mobile USA while Paolo Bertoluzzo will take over as the head of the southern operations while remaining CEO of Vodafone Italy.

Research in Motion (NASDAQ:RIMM) will release its first quarter earnings and it’s not likely to bring good news. The company has expectations of $0.03 net loss per share from a profit of $1.33; revenue may drop to $3.1 billion from $4.9 billion. On Wednesday, the company got some negative analyst comments including skepticism by Wedge Partners for the company finding a buyer soon and seeing success with its BlackBerry 10 OS.

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Early Equity BUZZERS: JPM Could Lose $9 BILLION, Facebook and Family Dollar DROP

Shares of JPMorgan Chase and Co. (NYSE:JPM) fell 3.4 percent before the opening bell. The bank’s infamous trading loss may reach as high as $9 billion. The NY Times reports, “As JPMorgan has moved rapidly to unwind the position — its most volatile assets in particular — internal models at the bank have recently projected losses of as much as $9 billion. In April, the bank generated an internal report that showed that the losses, assuming worst-case conditions, could reach $8 billion to $9 billion, according to a person who reviewed the report.” Other banks such as Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) also declined more than 1 percent as Citigroup (NYSE:C) cut price targets.

Family Dollar Stores Inc. (NYSE:FDO) shares dropped 7 percent in pre-market trading. The company reported that net income for the third-quarter came in at $124.5 million ($1.06 per share), compared to $111.1 million (91 cents per share) a year earlier. However, it was the fifth consecutive quarter that the company saw shrinking gross margins, as they fell 0.4 percentage point from the year-earlier quarter to 35.8 percent. Over that time, margins have contracted on average 0.6 percentage point per quarter on a year-over-year basis.

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Facebook (NASDAQ:FB) shares declined 1.3 percent in early trading. Analysts from the investment banks that took the social media company public started their review of the stock with a cautionary word, sending shares tumbling. Underwriting banks began publishing their comments early Wednesday, with the consensus being that shares of the social network may need a year or more before regaining the offering price.

Despite surging almost 30 percent yesterday, Arena Pharmaceuticals Inc. (NASDAQ:ARNA) shares decreased 3.86 percent before the opening bell. On Wednesday, the company won approval by the Food and Drug Administration for its weight-loss drug lorcaserin. It is the first obesity medication cleared for sale in the United States in 13 years. “Obesity threatens the overall well being of patients and is a major public health concern,” Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research, said in a statement, according to Bloomberg. “The approval of this drug, used responsibly in combination with a healthy diet and lifestyle, provides a treatment option for Americans who are obese or are overweight and have at least one weight-related comorbid condition.”

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Apple Plans to OVERHAUL iTunes and 4 Hot Stocks Making Headlines

Bank of America (NYSE:BAC): Keith Horowitz’s Citi team have cut Q2 outlooks and price targets for big banks. The analysts claim that net interest margins have narrowed, credit spreads have widened, and mortgage performance is still low.  Shares of Bank of America are trading 1.61% lower today.

Apple Inc. (NASDAQ:AAPL) intends to overhaul iTunes which would be one of the largest changes to the store since it debuted in 2003, sources claim. Bloomberg reports that the changes will be announced before the year’s end. Shares of Apple Inc. are trading 0.45% lower today.

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Facebook, Inc. (NASDAQ:FB) shares have fallen 16.5% from the original $38 IPO price, and S&P’s 500 has increased 2.2%. Because of the company’s valuation, advertising headwinds, and the conclusion of several lock-up periods which have stopped a few shareholders from selling, investors and analysts remain skeptical. Although Facebook’s dominance and innovation could eventually help the company overcome these issues, Barrons argues that the headwinds will probably continue in the upcoming years, defying Wall Street’s more ideal scenarios and high valuation. The company’s advertising growth in the U.S. has slowed to a third of last year’s, says a report issued Wednesday as well as the Los Angeles Times.Shares of Facebook, Inc. are trading 1.37% lower today.

AT&T, Inc. (NYSE:T): The company’s U-verse TV contract with AMC Neworks  (AMCX) for channels such as AMC, IFC, and WE tv, ends on June 30 at 11.59 p.m. EST.  AT&T states,  “We are making every effort to reach a fair agreement and continue providing these channels to our customers. Frankly, we’re disappointed AMC Networks has decided to take its negotiations public, instead of working with us in good faith, especially since we’re still actively in negotiations. We’ve been in ongoing negotiations to renew this agreement, but AMC Networks is seeking an excessive rate increase in our overall fees for the right to deliver these channels. AMC Networks is asking that AT&T pay nearly double what we believe other competitors pay including a smaller-sized competitor. We believe the rates they are seeking are disproportionate compared to the viewership we see across their channels.We don’t think that’s reasonable, especially in these economic times, and we will continue to work toward a fair deal.” Shares of AT&T, Inc. are trading 0.17% lower today.

Nokia Corporation (NYSE:NOK) chairman Risto Siilasmaa defended chief executive Stephen Elop following the company’s announcement regarding new job cuts and warning about weaker profit earlier in the month, stating that he possessed the board’s total confidence. Though Nokia was the world’s leading mobile phone provider, it has dropped more than 80% since Elop was named CEO in 2010, and it continues struggling to compete with Apple and Samsung’s smartphones. Shares of Nokia Corporation are trading 3.15% lower today.

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Tenet Healthcare Shares JUMP on Supreme Court Ruling and 4 Hot Stocks to Watch

Tenet Healthcare (NYSE:THC): Thursday’s decision by the U.S. Supreme Court to uphold the main points of U.S. President Barack Obama’s signature healthcare legislation caused shares of hospital chains to rise. Hospital company Community Health Systems Inc. climbed 8 percent, and Tenet Healthcare saw a nearly 5 percent rise.

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HCA Holdings (NYSE:HCA), the biggest private-sector hospital operator in America, saw its shares climb in recent trading. HCA facilities supply around 4-5 percent of all U.S. inpatient care.

UnitedHealth Group (NYSE:UNH): No matter the decision regarding the Affordable Care Act, some of the largest insurers in the U.S. reported they will expand popular parts of the law indefinitely. Among these are coverage for dependents to 26 yars of age, no limit on lifetime payouts per policyholder, and a ban on rescission, or retroactive cancellation of coverage. UnitedHealth announced expansion of coverage first, earlier in June, and Aetna and Humana followed suit.

Orexigen Therapeutics (NASDAQ:OREX): Shares of Orexigen Therapeutics and fellow diet-drug developer Vivus Inc. improved Wednesday afternoon thanks to reports that Arena Pharmaceuticals has gotten U.S. regulatory approval for its diet pill lorcaserin (a.k.a. Belviq).

Microsoft Corporation (NASDAQ:MSFT) reported today that Microsoft Office 365, the company’s next-generation cloud productivity utility for organizations of any size, is now obtainable in four new Asian markets: Indonesia, Sri Lanka, Thailand and Taiwan. The service unites Microsoft Office, Microsoft SharePoint Online, Microsoft Exchange Online and Microsoft Lync Online in a constantly updated cloud.

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Yahoo! and Clear Channel Team Up and 3 Sizzling Stocks on Wall Street

Yahoo (NASDAQ:YHOO) is reporting a distribution/promotion agreement with Clear Channel a mere two days after reports of an agreement with Spotify. In this new deal, Clear Channel’s iHeartRadio, which is somewhat successful in competing with Pandora (NYSE:P) will now be Yahoo’s “premier digital radio service;” Yahoo and Clear Channel will promote each others’ content; and Yahoo will be the sole web/mobile partner for Clear Channel’s live concert program.

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Cisco (NASDAQ:CSCO) is growing the collaboration abilities of its unified communications (UC) solution with UC Release 9.0. The company’s goal is to supply collaboration answers that let enterprise have the same experience despite the type of device, from tablets and smartphones to office phones, notebooks and telepresence systems.

Intel (NASDAQ:INTC) is planning to be in court in a hearing that begins July 3, in its effort to overturn a €1.06B penalty delivered by the European Commission in 2009. This is the highest penalty ever leveled against a single company by the EU.

JPMorgan Chase (NYSE:JPM): “If this company has got earnings power in the $22 billion range, how bad can it be?” Richard Bove, an analyst at Rochdale Securities LLC in Lutz, Florida, said today in an interview on Bloomberg. “To assume that this one-time loss or this one-time event should change all theories or concepts about JPMorgan or about big banks would be a terrible mistake.”

Don’t Miss: Is News Corp Preparing to SPLIT?

Market WRAP: RIM Heads to HADES, Supreme Court and JPMorgan ROCK Markets

Markets closed down on Wall Street today: 
Dow -0.20%, S&P -0.21%, Nasdaq -0.90%, Oil -2.17%, Gold -1.36%.

On the commodities front, Oil (NYSE:USO) declined to $78.49 a barrel. Precious metals also declined, with Gold (NYSE:GLD) falling to $1,557 an ounce while Silver (NYSE:SLV) fell 0.58% to settle at $26.36.

Here’s your Cheat Sheet to today’s top stock stories:

News Corp.’s (NASDAQ:NWS)(NASDAQ:NWSA) board has reportedly approved the split of the $60 billion media group, which will likely result in the separation of its publishing and entertainment arms. Both the Wall Street Journal and Reuters reported that the separation could be announced later on Thursday.

Don’t Miss: Is News Corp Preparing to SPLIT?

As the 40-day quiet period following Facebook’s (NASDAQ:FB) IPO came to an end on Wednesday, analysts were quick to throw in their two cents on the stock, which has been on a rollercoaster ride since its May debut. BMO Capital Markets predicted that the stock, which hit a low of $25.61 on June 6 but has since rallied to $32.23, will sink again to $25. JPMorgan (NYSE:JPM) is much more optimistic, predicting it will rise to $45 — $7 above its IPO price — in the next 18 months.

J.P. Morgan Chase & Co. (NYSE:JPM) shares declined 2.45 percent after a New York Times report said that the banks’ trading loss could now reach $9 billion–an amount considerably higher than its initial $2 to $3 billion estimate. The paper cited unnamed sources for the growing amount, which had been based on an internal April report that reflected this number.

Research in Motion (NASDAQ:RIMM) met the low expectations for its first quarter earnings report. The company reported $2.8 billion in revenue, down 33 percent from the fourth quarter’s $4.2 billion; it came in below analysts’ $3.11 billion consensus. RIM also saw an adjusted $192 million loss ($0.37 per share); the Street had the company losing $0.01 per share. Additional bad news included a shipment delay of its BlackBerry OS 10 device until 2013’s first quarter.

Energy Transfer Partners (NYSE:ETP) dropped five percent after the company raised about $600 million through the offering of 13.5 million shares; they had a $44.57 per share price.

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HOT Movers: RIM and Nike PLUNGE, Arena Pharma Sees Profit Taking

Research in Motion (NASDAQ:RIMM) shares plunged more than 17 percent after the closing bell. The BlackBerry maker reported a first-quarter loss excluding items of 37 cents per share, down from a profit of $1.33 per share a year earlier. Analysts were only expecting a loss of about 3 cents per share. Furthermore, RIM delayed its new release of the BlackBerry lineup and announced plans to cut 5,000 jobs.

Nike Inc. (NYSE:NKE) shares took a surprising fall of nearly 10 percent in late trading. The company announced that net income in the fourth-quarter declined to $549 million ($1.17 per share), compared to $594 million ($1.23 per share) a year earlier. However, it was the fifth quarter in a row that Nike saw shrinking gross margins, as they fell 1.5 percentage points from the year-earlier quarter to 42.8 percent. Over that time, margins have contracted on average 2.4 percentage points per quarter on a year-over-year basis. Shares of competitor Under Armour Inc. (NYSE:UA) also declined 3.77 percent.

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TIBCO Software Inc. (NASDAQ:TIBX) shares dropped 2.87 percent in extended trading hours, despite reporting better-than-expected second-quarter results. Net income came in at $26.6 million (16 cents per share), compared to $21 million (12 cents per share) a year earlier. “We delivered another quarter of continued growth, with total revenue and license revenue up by 20 percent and 17 percent respectively, after adjusting for currency movements,” said Vivek Ranadiv, TIBCO’s chairman and CEO. “A growing list of customers across industries and geographies are harnessing big data and becoming event-driven through the use of our infrastructure software platform – whether for new demand generation, improved loyalty program returns, increased operational efficiencies, or superior risk management. In up markets and down, these remain priority initiatives that continue to create opportunities for TIBCO.”

Investors and traders continue to book profits in Arena Pharmaceuticals Inc. (NASDAQ:ARNA). The company closed 10.18 percent lower on Thursday and fell another 1.56 percent after the closing bell. The company won approval by the Food and Drug Administration on Wednesday for its weight-loss drug lorcaserin. It is the first obesity medication cleared for sale in the United States in 13 years.

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