Ultimate Market Recap: Spain in the Spotlight, Facebook Faces More Troubles

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The Week Ahead: New Home Sales and Consumer Spending Reports, But All Eyes Are on Spain

This week, market watchers will keep their eyes on a potential bailout request by Spain. Stories are circulating that the country is preparing for a  formal bailout request to the European Central Bank; it may arrive on Thursday, reported the Financial Times.

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No surprise, Spain has said it doesn’t need a bailout but an actual request is a different story.

Back in the U.S., it’s a busy week for economic numbers. This includes a snapshot of the U.S. housing market, GDP and consumer sentiment topping the list.

There’s a short list of corporate earnings including Nike Inc. (NYSE:NKE) and Lennar (NYSE:LEN).

Let’s take a look at the week ahead.

Economic Data

Monday: Chicago Fed August national activity index and Dallas Fed September manufacturing survey

Tuesday: S&P Case-Shiller home-prices index for July, September consumer confidence, July FHFA home prices index and Richmond Fed September manufacturing survey

Wednesday: August new home sales

Thursday: Weekly jobless claims, August durable goods orders, Second-quarter real GDP (3rd read), August pending home sales and Kansas City Fed September manufacturing survey

Friday: August personal income, August consumer spending, August core PCE prices, September Chicago PMI and September Reuters/UMich consumer sentiment (final)

Earnings

Monday: Lennar (NYSE:LEN), Paychex (NASDAQ:PAYX), Red Hat (NYSE:RHT)

Tuesday: Carnival (NYSE:CCL), Jabil Circuit (NYSE:JBL), H.B. Fuller (NYSE:FUL), FactSet (NYSE:FDS)

Wednesday: Worthington Industries (NYSE:WOR), Progress Software (NASDAQ:PRGS)

Thursday: Nike (NYSE:NKE), Micron Tech (NASDAQ:MU),  Texas Industries (NYSE:TXI), Accenture (NYSE:ACN), Discover Financial (NYSE:DFS)

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Wall St. Brief: Apple Seeks Its Pound of Flesh, Facebook Builds Up Mobile

On Friday, Apple (NASDAQ:AAPL) asked Judge Lucy Koh to award an additional $707 million in damages from Samsung (SSNLF.PK). This comes on top of the $1.05 billion awarded by a San Jose jury in August. The company is also asking for a permanent ban on 26 Samsung smartphones (its previous request was eight) and three tablets. Meanwhile, Samsung wants a re-trial and has alleged that the time constraints of the California trial has “prevented Samsung from presenting a full and fair case.”

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In additional Apple news, S&P (NYSE:MHP), the new owner of the DJIA, is considering a change to the way the index is calculated in an effort to include the company. UBS’s Mark Haefele responded, “Most institutional investors have moved on from the index.”  Meanwhile, Kraft (NYSE:KFT) will exit the DJIA on Monday while UnitedHealth (NYSE:UNH) will replace it.

Facing pressure to show its ability to benefit advertisers, Facebook (NASDAQ:FB) is working with the data-mining company Datalogix to track the number of users who buy a company’s product after seeing its ads on the social network giant. From the 45 campaigns measured, advertisers earned an additional $3 in incremental sales for each dollar spent on Facebook 70 percent of the time. But Datalogix’s techniques have caused privacy concerns.

Yahoo (NASDAQ:YHOO) CEO Marissa Mayer will hold two meetings on Tuesday with company employees to share her plans for the business,  reported All Things D. These include rising transparency, focusing more on metrics and updating the company’s email and homepage by placing a bigger emphasis on the consumer experience. This will come at the bottom line expense in the short term.

GE (NYSE:GE) will plan to increase revenues from its mining-equipment and services unit to $5 billion, up from $2 billion “within a few years.” Similar to its oil and gas operations, the company will expand GE Mining through acquisitions as mining companies, including BHP (NYSE:BHP) have been cutting back investments on falling commodity prices. GE Mining CEO Geoff Knox said,  “It is a good a time to be looking at acquisitions in a value sense.”

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Morning Buzzers: Apple Dips After Announcing iPhone 5 Sales, Facebook Plunges Over 6%

Shares of Apple (NASDAQ:AAPL) dropped more than 1 percent this morning on news that Foxconn, a major supplier for Apple, was forced to close a factory in Northern China after a fight broke out and left 40 people injured. Furthermore, analysts appear disappointed that Apple reported iPhone 5 sales of five million units over the weekend and ran out of supply. “While we have sold out of our initial supply, stores continue to receive iPhone 5 shipments regularly and customers can continue to order online and receive an estimated delivery date,” said Apple CEO Tim Cook in a statement. “We appreciate everyone’s patience and are working hard to build enough iPhone 5s for everyone.”

Facebook (NASDAQ:FB) shares fell more than 6 percent today. Despite the recent run-up in its share price, the social media giant is still having a hard time convincing people of its mobile strategy. Barron’s placed Facebook on its cover over the weekend claiming the company is worth only $15 a share.

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Lennar (NYSE:LEN) shares are down 1 percent this morning. The homebuilder announced that net income in the third quarter rose to $87.1 million (40 cents per share), compared to $20.7 million (11 cents per share) a year earlier. Revenue also increased 34.1 percent to $1.1 billion. “In homebuilding, we continue to see strong sales trends translating into increased deliveries, stronger gross margins and improved operating leverage,” said chief executive Stuart Miller. “While materials and labor costs are moving higher, sales-price increases and incentive reductions should continue to offset the impact of increasing costs.” Shares of KB Home (NYSE:KBH) also traded higher on the news.

Shares of Netflix (NASDAQ:NFLX) dropped 0.76 percent this morning. The online streaming company will lose content from A&E and History channels after negotiation talks between the companies broke down.

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Apple Inc. (NASDAQ:AAPL):  Apple Inc. announced that they have sold over five million of their new iPhone 5, only three days after the launch on September 21, and more than 100 million iOS devices have been updated with iOS 6, the world’s most advanced mobile operating system. Demand for the iPhone 5  has exceeded the initial supply and while the majority of pre-orders have been shipped to customers, many are scheduled to be shipped in October. The phone  is available in the United States, Australia, Canada, France, Germany, Hong Kong, Japan, Singapore and the United Kingdom.  On September 8, it will be available to twenty-two more countries and by the end of the year, to more than one hundred countries.

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Questcor Pharmaceuticals, Inc. (NASDAQ:QCOR): On September 21, Questcor Pharmaceuticals Inc. became aware of a United States government investigation involving the Company’s promotional practices. The Company intends to cooperate with the government’s investigation. No additional information will be provided, other than through potential public Regulation FD-compliant disclosures.

Lennar Corp. (NYSE:LEN): Chief Executive Officer, Stuart Miller made the following statement, “The housing market has stabilized and the recovery is well underway. Low mortgage rates, affordable home prices, increased buyer confidence and an extremely favorable rent-to-own comparison are driving growth in each of our markets. Additionally, reduced foreclosures and declining distressed home inventories are further contributing to the improvement in the housing market.”

Google Inc. (NASDAQ:GOOG):  According to TechCrunch, after coming under fire for their Map application, Apple has decided to look for some help from former Google Inc. workers. They are currently trying to woo folks who worked on Google Maps, and many are seriously considering  joining Apple, since the company offers an opportunity to create something new rather than deliver “tedious updates” to an already established product.

TiVo Inc. (NASDAQ:TIVO):  TiVo Inc. has announced that they have settled their pending patent litigation with Verizon Communications (NYSE:VZ), and that the companies have entered into a mutual patent licensing arrangement. As part of the agreement, TiVo and Verizon have decided to dismiss all pending litigations between them with prejudice. Verizon will provide TiVo total compensation worth at least $250.4 million. The payments shall be comprised of a $100 million initial cash payment followed by recurring quarterly payments totaling an additional $150.4 million through July 2018. If the companies pursue certain commercial initiatives prior to Dec. 21, up to $29.4 million of the payments made by Verizon would be subjected to a credit of an equal amount. In addition to the guaranteed compensation, Verizon will also pay monthly license fees through July 2018 for each Verizon DVR subscriber in excess of certain pre-determined levels. Verizon and TiVo are exploring, among other things, future distribution of Internet video services developed through Verizon’s joint venture with Redbox. This will be accomplished by making content distributed via that service part of the diverse selection of linear and broadband-delivered content accessible to users of TiVo’s retail DVR products. The parties also entered into a cross license of their respective patent portfolios in the advanced television field.

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General Electric Co. (NYSE:GE): General Electric Co.’s Capital Aviation Services Limited, the commercial aircraft leasing and financing arm of GE, announced they will lease two modern Embraer E190 aircraft to Myanmar Airways, the flag carrier of Myanmar. The aircrafts are scheduled for delivery in November and December.

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Research in Motion Limited (NASDAQ:RIMM): According to DigiTimes, the lack of near field communication technology in Apple’s iPhone 5 will prompt rival handset makers to race to become priority partners for launching NFC enabled apps. Samsung (SSNLF.PK) has won the largest number of NFC related partner projects in Europe and Asia, while Research in Motion Limited, has led rivals in establishing NFC ties with the business sector.

Bank of America (NYSE:BAC): According to the Wall Street Journal, due to the uncertain economy and new government regulations, banks are charging customers more to maintain “free” checking accounts. A new survey from the data provider, Bankrate, Inc., in the United States, customers have to keep an average minimum balance of $723 in checking accounts that pay no interest, which is 23% higher than last year. The average monthly fee on non-interest checking accounts climbed 25% to $5.48, a new high.

Facebook, Inc. (NASDAQ:FB): Starting next month, more than 1 billion shares of Facebook will be released from lock up restrictions for a short span of two weeks or so. Many of these shares belong to current Facebook employees and it’s a good bet they are going to sell in large numbers, putting new pressure on the stock.

AT&T, Inc. (NYSE:T): According to the Associated Press, many stores in the United States are reporting that they have sold out of Apple’s iPhone 5. The device went on sale this past Friday.

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