Ultimate Market Recap: American Airlines Bankrupt, Facebook Buzz, Big Banks Downgraded

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Tuesday Morning’s Top Stories

AMR Corporation (NYSE:AMR), parent company for American Airlines, Inc.’ s and AMR Eagle Holding Corporation, has filed for Chapter 11 reorganization. In a company press release, AMR said the bankruptcy filing comes as an effort to “achieve a cost and debt structure that is industry competitive and thereby assures its long-term viability and ability to continue delivering a world-class travel experience for its customers.” The company plans to run normal business operations while restructuring its debt and costs and named Tom Horton as CEO.

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Facebook Inc. is getting closer to hitting the public arena and is targeting somewhere between April and June 2012 for its IPO, according to the Wall Street Journal. The company may raise $10 billion from its IPO, representing one of the largest offerings ever. With Facebook’s potential $100 billion valuation, this will be twice as high as Hewlett-Packard Co.(NYSE:HPQ) and 3M Company (NYSE:MMM).

AT&T (NYSE:T) is still looking to save its T-Mobile USA deal and in a last ditch effort is in talks with Leap Wireless International Inc. (NASDAQ:LEAP) to a sell a large portion of T-Mobile’s customer accounts and some its wireless spectrum to them. With this deal, AT&T is hoping to either spur the Justice Department to cease its opposition to the proposed acquisition or give AT&T some strength should it head to trial.

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Leap could benefit by becoming the fourth-biggest wireless carrier nationally.

This year’s Cyber Monday is proving to be as successful as Black Friday with preliminary estimates showing sales rose 18 percent from the previous year to make it the largest Internet shopping day. Through Monday afternoon, department store websites had a successful day with Macy’s Inc. (NYSE:M) and Nordstrom Inc. (NYSE:JWN) seeing a 39 percent sales rise, according to the International Business Machines Corp.’s (NYSE:IBM) Smarter Commerce data.

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Tuesday Morning Hot Stocks

After being one of the biggest turkeys of the yearAMR Corp.(NYSE:AMR) has filed for bankruptcy, becoming the final large US full-share airline to seek court protection from creditors.  After failing to secure cost-cutting labor agreements and sitting out a round of mergers, American went from being the world’s largest airline to number 3 in the U.S. In filing for Chapter 11 in U.S. Bankruptcy Court in Manhattan today, American listed $24.7 billion in assets and $29.7 billion in debt.  Competitors include: Southwest Airlines (NYSE:LUV), JetBlue (NASDAQ:JBLU), and United Continental Holdings, Inc.(NYSE:UAL).

Despite reporting a 63% increase in third quarter earnings, shares of Tiffany & Co.’s (NYSE:TIF) are down almost 8% before the opening bell.  The company reported a profit of $89.7 million (70 cents per share), compared to $55.1 million (43 cents per share) last year.

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Shares of Hewlett-Packard (NYSE:HPQ) popped 1% before the open, as shares were upgraded to outperform from sector perform at RBC Capital Markets.  The firm said, “We are incrementally confident that HP should meet expectations and likely deliver upside to consensus estimates.”  Competitors include: Microsoft (NASDAQ:MSFT), Dell (NASDAQ:DELL), and Apple (NASDAQ:AAPL).

Apple (NASDAQ:AAPL) is edging slightly lower early Tuesday.  Susquehanna Financial Group lowered its production estimates for the company’s iPhone due to supply constraints and for desktop and laptop computers because of a shortage of hard disk drives.  The supply constraints from Thailand flooding is also expected to affect Advanced Micro Devices Inc. (NYSE:AMD) and Intel Corp. (NASDAQ:INTC).

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Yahoo! (NASDAQ:YHOO) is bouncing 1.8% in early trading on more buyout rumors.  According to Reuters, Thomas H. Lee Partners is interested in buying the U.S. operations of Yahoo, breaking away from other bidders that are for now eyeing either a minority stake or teaming up with the Internet giant’s partners in Asia, sources familiar with the matter said.

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Tuesday’s Trending Stocks

The Dow Jones Industrial Average is climbing above 11,600 and the S&P 500 Index is above 1,200. Here are the most buzzing stocks on Wall Street today:

  1. AMR Corporation (NYSE:AMR): Shares of AMR Corporation are trading lower 86% today. AMR Corporation operates an airline that provides scheduled passenger, freight, and mail service throughout North America, the Caribbean, Latin America, Europe, and the Pacific. The Company also provides connecting service throughout the United States, Canada, and the Caribbean. In addition, AMR provides aviation services, call center management services, and investment advisory services.
  2. Tiffany & Co. (NYSE:TIF): Shares of Tiffany & Co. are trading lower 7% today. Tiffany & Co. operates jewelry and specialty retail stores and designs and manufactures its products through subsidiary companies. The Company retails its products through stores and boutiques in the United States, Mexico, Canada, and Brazil, and wholesales outside the United States. Tiffany also markets through the Internet and catalogs.
  3. People’s United Financial, Inc. (NASDAQ:PBCT): Shares of People’s United Financial, Inc. are trading flat today. People’s United Financial Inc. is a bank holding company. The Company, through its banking subsidiary, offers a full range of financial services to individual, corporate, and municipal customers primarily in Connecticut. The Bank issues credit cards and provides brokerage and investment planning, asset management, equipment leasing, and insurance services.
  4. Hillenbrand, Inc. (NYSE:HI): Shares of Hillenbrand, Inc. are trading higher 1% today. Hillenbrand, Inc. manufactures and supplies burial caskets, cremation products, and related services to licensed funeral homes.
  5. Beacon Roofing Supply, Inc. (NASDAQ:BECN): Shares of Beacon Roofing Supply, Inc. are trading lower 10% today. Beacon Roofing Supply, Inc. distributes residential and non-residential roofing materials in the United States and Canada. The Company also distributes other complementary building materials, including siding, windows, specialty lumber products, and waterproofing systems, for residential and non-residential building exteriors.
  6. US Airways Group, Inc. (NYSE:LCC): Shares of US Airways Group, Inc. are trading higher 11% today. US Airways Group, Inc. is an air carrier that transports passengers, property, and mail. The Company provides regularly scheduled service at airports in the United States, Canada, Europe, the Caribbean, and Latin America.
  7. Seagate Technology PLC (NASDAQ:STX): Shares of Seagate Technology PLC are trading higher 5% today. Seagate Technology PLC designs, manufactures, and markets rigid disc drives for enterprise, personal computer, and consumer electronics applications.
  8. Evergreen Energy Inc. (NYSEARCA:EEE): Shares of Evergreen Energy Inc. are trading lower 23% today. Evergreen Energy Inc. develops alternative fuel products. The Company’s K-Fuel process enriches and upgrades low-grade subbituminous coal and lignite into a high Btu, low moisture, low emission product.
  9. Southwest Airlines Co. (NYSE:LUV): Shares of Southwest Airlines Co. are trading higher 1% today. Southwest Airlines Co. is a domestic airline that provides primarily short-haul, high-frequency, point-to-point service. The Company offers flights throughout the United States.
  10. Commercial Metals Company (NYSE:CMC): Shares of Commercial Metals Company are trading flat today. Commercial Metals Company and its subsidiaries manufacture, recycle, and market steel and metal products and related materials. The Company markets and trades primary and secondary metals, steel, ores, concentrates, industrial minerals, ferroalloys, chemicals, and other materials used in a variety of industries.

Market Recap

Markets closed mixed on Wall Street today: Dow +0.28%, S&P+0.22%, Nasdaq -0.47%, Oil +1.62%, Gold +0.31%.

On the commodities front, Oil (NYSE:USO) climbed to $99.80 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) climbing to $1,719.80 an ounce while Silver (NYSE:SLV) fell 0.86% to settle at $31.97

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Today’s markets were mixed because:

1) Europe. U.S. stocks edged higher early in the day extending gains from yesterday’s rally as investors remained hopeful that euro-zone leaders are making progress in addressing the region’s debt crisis. Finance ministers from the euro zone’s 17 member nations have converged on the European Union headquarters in Brussels today in a desperate bid to save their currency and to protect the global economy from a debt-induced financial crisis. European leaders are working on a new plan to ensure fiscal discipline across the euro region while keeping down borrowing costs on sovereign debt. 

2) AMR. American Airlines’ parent company AMR Corp. (NYSE:AMR) announced early this morning that it had filed for Chapter 11 bankruptcy protection, causing the company’s stock to plunge more than 80%. The news gave rival airlines some traction, with Delta (NYSE:DAL), United Continental (NYSE:UAL), and US Airways (NYSE:LCC) among the day’s hottest stocks. JetBlue (NASDAQ:JBLU) shares climbed more than 10% by closing bell.

3) Banks. Though the financial sector led Monday’s rally, they were among today’s biggest losers. Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), Wells Fargo (NYSE:WFC), and Goldman Sachs (NYSE:GS) all declined.

BONUS: Obama and EU Leaders Consider Bilateral Trade Agreement

After Hours Radar Stocks

Late Tuesday, rating agency Standard & Poor’s announced downgrades on 37 global banks, by applying its new ratings criteria for banks, which were published earlier this month.  The updates in the ratings is part of a major overhaul for scoring creditworthiness, as the credit rating agency received heavy criticism after failing to properly rate mortgage-backed securities in the housing bubble.

Bank of America Corp. (NYSE:BAC) is down more than 1% in late trading, after falling 3.24% during regular market hours.  The bank most recently traded near $5.  Concerns are mounting that several institutional investors such as State Street (NYSE:STT), BlackRock (NYSE:BLK) and JP Morgan (NYSE:JPM) are forced to liquidate their BofA positions as shares fall below $5.

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Morgan Stanley (NYSE:MS), Wells Fargo (NYSE:WFC), and Goldman Sachs (NYSE:GS) also declined by nearly 1% after the closing bell.  However, shares of Citigroup (NYSE:C) are down only .40% after the downgrades.

Aside from the bank sector (NYSEARCA:XLF), shares of tech related companies are also attracting attention in late trading.  After closing nearly 11% on Tuesday, shares of Corning Inc. (NYSE:GLW) continue to edge .15% lower in extended hours.  The company announced it would reduce its worldwide glass capacity by 25% in the fourth quarter.  It may also see lower demand for its Gorilla Glass products.  Shares of Apple (NASDAQ:AAPL) are also trading lower on the news.

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Despite a bright outlook, shares of Cisco (NASDAQ:CSCO) closed nearly 2% lower on Tuesday.  Public Internet traffic is on the rise and so is the traffic inside the data centers where the web content originates. Cisco’s Visual Networking Index sees traffic quadrupling by 2015 as they dominate the the overall market for data center networking gear. For the first time, Asia will also generate more traffic than North America, although America still beats China.

Big name IPOs continue to struggle.  Shares of Angie’s List Inc. (NASDAQ:ANGI) fell more than 9% on Tuesday, and continue to head below its IPO price after the closing bell.  Other stocks trading below their IPO price include Groupon (NASDAQ:GRPN) and LinkedIn (NYSE:LNKD).

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