Ultimate Market Recap: Time of Change for Avon, Apple Tests Smaller Tablet

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Wall Street Brief: Google’s Quest to Dominate Mobile, Greece Bailout Details Unknown

While Greece approved austerity measures on Sunday, bailout elements still need to be determined such as the contribution of euro zone governments to reduce the country’s debt. The Wall Street Journal reports that the EU wants Greece to cut an additional EUR 325 million ($429 million) of the budget and receive additional party leader assurances about the package. These demands give affirmations to those who think the EU is attempting to kick Greece out of the euro.

U.S. and EU regulators have approved the $12.5 billion acquisition by Google (NASDAQ:GOOG) of Motorola (NYSE:MMI). They will also watch for key patents to the telecom sector be licensed at fair prices. Also on Monday, the Department of Justice also approved the patent purchases by an Apple (NASDAQ:AAPL) group led by Nortel Networks Corp. (NRTLQ), and the patents previously owned by Novell IP, according to Reuters.

For the second time in a week, the Federal Reserve delayed its decision on whether or not to approval Capital One Financial’s (NYSE:COF) proposed $9 billion ING (NYSE:ING) acquisition.  It reviewed the deal on Monday and said it will announce a decision soon. Community banks and consumer advocates have criticized the deal for its possible impact on the economy. If it’s approved, Capital One could jump to the fifth or sixth largest bank as defined by deposits; it currently not in the top 10.

The Bank of Japan announced the expansion of its asset-purchasing program by YEN 10 trillion. It will also keep its near-zero interest rate target, with a set inflation target of 1 percent. While the bank was not pressured to set the goal, the government still may interfere in monetary policy.

9 Early Radar Stocks: Michael Kors Surges 16%, Bank of America Downgraded and Masco Drops 6%

Shares of Michael Kors Holdings (NYSE:KORS) surged more than 16 percent Tuesday morning.  The company reported a fiscal third-quarter profit of $32 million (20 cents per share), compared to $21.8 million (16 cents per share) in the previous year.

Bank of America Corp. (NYSE:BAC) shares dropped 1.6 percent after receiving a downgrade from Citigroup (NYSE:C).  Analyst Keith Horowitz cut the bank’s rating from buy to neutral. Shares of Goldman Sachs (NYSE:GS) and J.P. Morgan (NYSE:JPM) also declined.

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Masco Corp. (NYSE:MAS) shares dropped more than 6 percent after reporting a fourth quarter loss of $1.65 per share. “Our performance in 2011 was challenged by commodity cost volatility, a competitive retail environment, a flat housing environment in North America and difficult economic conditions in Europe” said Masco’s President and CEO, Tim Wadhams. “Despite these headwinds, we continued to: strengthen our leading brand positions, including the introduction of new products and programs; improve our cost structure and productivity; invest in future growth opportunities and improve our working capital management.”

Avon Products Inc. (NYSE:AVP) fell 4.5 percent after reporting a fourth quarter loss of $400,000, compared to a profit of $230 million last year.  “While 2012 is a year of transition and we are not planning for margin recovery, our priorities are to improve top-line performance, cost management, and cash generation,” said Andrea Jung, chief executive and chairman.  Other multi-level marketing companies such as Herbalife (NYSE:HLF) edged higher, while Tupperware Brands (NYSE:TUP) edged lower.

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Hot Stocks for Feb 14th: Zipcar, Michael Kors, Avon, MedAssets, Fossil (ZIP, KORS, AVP, MDAS, FOSL)

Zipcar Inc (NASDAQ:ZIP): Reports revenue $62.9M vs. consensus $63.09M. Q411 benefited from a gain on the sale of Zero Emission Vehicle, ZEV, credits of $2.5M compared to a gain of $1.2M on the sale of ZEV credits in the prior year period. Excluding the impact of ZEV credits, US GAAP net income for the 2011 fourth quarter would have been $1.4M. US GAAP net loss for the full year 2011 was $7.2M, or (24c) per share, compared to a loss of $14.1M, or ($2.74) per share, in 2010 during which the outstanding share count was substantially lower. Shares of Zipcar Inc are trading 15.06% lower today.

Michael Kors Holdings Ltd (NYSE:KORS): Sees FY12 revenue $1.27B-$1.28B vs. consensus $1.25B. Shares of Michael Kors Holdings Ltd are trading 19.61% higher today.

Avon Products, Inc. (NYSE:AVP): Says is “a time of tremendous change” for company. Comments made on the Q4 earnings conference call. Shares of Avon Products, Inc. are trading 3.14% higher today.

MedAssets, Inc. (NASDAQ:MDAS): According to contacts, DealReporter said MedAssets has hired JP Morgan to explore an LBO, citing sources. Shares of MedAssets, Inc. are trading 14.09% higher today.

Fossil, Inc. (NASDAQ:FOSL): Reports revenue $830.8M vs. consensus $841.12M. Shares of Fossil, Inc. are trading 2.92% higher today.

4 Big Stocks Attracting Attention Feb. 14th (BAC, AAPL, GM, MSFT)

Bank of America Corporation (NYSE:BAC): Saying the Volcker rule would increase risk, raise costs for investors, hurt U.S. competitiveness and be open to legal challenge, major banks and their trade associations are pushing for changes to a proposed U.S. ban on proprietary trading, escalating their effort against the rule which takes effect in five months, reports Bloomberg. Shares of Bank of America Corporation are trading 2.67% lower today.

Apple (NASDAQ:AAPL): With increasing competition and to broaden its product line, Apple (NASDAQ:AAPL) is working with component suppliers in Asia to test a new tablet computer with a smaller screen–about eight inches–sources say, reports the Wall Street Journal. Shares of Apple are trading .10% higher today.

General Motors (NYSE:GM): GM can expect to receive approval to build a $1.1B factory in China, according to a provincial government statement, reports Bloomberg Businessweek. Shares of General Motors are trading .08% higher today.

Microsoft (NASDAQ:MSFT): Microsoft, with 14 stores in the U.S., is planning its first store outside the country and it will be in Canada, reports the Globe and Mail. Shares of Microsoft are trading .92% lower today.

Market Recap: Moody’s, Retail Deflate Stocks

Markets closed mixed on Wall Street today: Dow +0.03%, S&P -0.09%, Nasdaq +0.02%, Oil +0.24%, Gold -0.19%.

On the commodities front, Oil (NYSE:USO) rose to $101.15 a barrel. Precious metals were down, with Gold (NYSE:GLD) falling to $1,721.60 an ounce while Silver (NYSE:SLV) fell 0.57% to settle at $33.53.

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Today’s markets were mixed because:

1) Retail. The Department of Commerce reported today that U.S. retail sales rose in January, but less than expected, as auto sales fell sharply. Additionally, this morning’s report downwardly revised retail sales growth for the preceding two months, painting a rather dismal picture for consumer spending in the two months it should have flourished — that is, the holiday shopping season.

2) Moody’s. Late Monday, Moody’s Investors Service downgraded six euro-zone countries — Italy, Malta, Portugal, Slovakia, Slovenia, and Spain — and put Austria, France, and the United Kingdom, all of which have top-tier triple-A credit ratings, on watch for a possible downgrade, which means they have a 30 percent chance of being downgraded within the next 18 months.

3) Earnings. The relatively flat day of trading is at least partly the result of a rather mixed bag of earnings reports, with no major players making waves with their quarterly results. Michael Kors (NYSE:KORS) shares jumped after posting better-than-expected fiscal third quarter earnings and revenue, while Zipcar (NASDAQ:ZIP) shares jumped after the company, which made its stock market debut last April, posted a 21 percent revenue bump and a 25 percent increase in total membership during the quarter. Masco (NYSE:MAS) and Goodyear Tire (NYSE:GT) shares sank after reporting losses, while drug companies Hospira (NYSE:HSP) and Watson (NYSE:WPI) both reported better-than-expected quarterly results, sending shares higher.

BONUS: Austerity: The Real Cost of Greece’s Bailouts

To contact the reporter on this story: Lindsey Grossman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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