Ultimate Market Recap: EU Wobbles, Citigroup Earnings, Apple on Fire
Today’s Top Stories
The United Auto Workers’ tentative contract with Ford Motor Co (NYSE:F) appears to be moving toward ratification after a Sunday night vote was overwhelmingly supported by two major union locals. After Sunday’s overwhelming 90 percent vote of the new pact by the Kansas City Assembly Plant in Missouri plant, the overall vote in favor of the new contract comes in at 62 percent, enough for ratification.
Citigroup Inc. (NYSE:C) net income for the financial services company rose to $3.77 billion ($1.23 per share) vs. $2.17 billion (70 cents per share) in the same quarter a year earlier. This marks a rise of 73.9% from the year earlier quarter. Wall Street cheered the gain as Citi’s stock (NYSE:C) is up 2.3%. Don’t Miss: Your Cheat Sheet to Citigroup Earnings.
Research in Motion (NASDAQ:RIMM) it will try to make amends with disgruntled subscribers by offering a selection of apps worth more than $100. The customers affected by last week’s outage will also receive one free month of technical support. In a statement by RIM’s co-Chief Executive Mike Lazaridis, he said, the company is ”grateful to our loyal BlackBerry customers for their patience”, and will “work tirelessly to restore their confidence.” He added, ”We are taking immediate and aggressive steps to help prevent something like this from happening again.”
Shares of El Paso Corp (NYSE:EP) blew up in preopen trading today, rising more than 25 percent in response to Kinder Morgan Inc.’s (NYSE:KMI) offer to buy the company. The deal is valued at $38 billion including a $26.87 per share value and $17 billion of debt. The merger will make this the largest natural gas (NYSE:UNG) pipeline system in the U.S.
Investing Insights: Oil ETFs: The Top 10 Exchange Traded Funds for Your Oil Investing List.
Anadarko (NYSE:APC) agreed to a settlement with BP (NYSE:BP) and will pay $4 billion in clean-up costs for the Gulf of Mexico oil spill. The deal also included Anadarko dropping its allegations of gross negligence against BP; however, both companies may still have to pay government fines.
Early Morning Hot Stocks
Shares of Citigroup (NYSE:C) are up more than 2% in early trading. The bank said on Monday that its third-quarter profit rose to $3.8 billion ($1.23 per share), compared to $2.2 billion (73 cents per share). The quarter included $1.9 billion of credit valuation adjustment reflecting the widening of Citi’s credit spreads. The credit valuation adjustment added 39 cents per share to earnings. Other banks such as Goldman Sachs(NYSE:GS) and JP Morgan (NYSE:JPM) are trading lower.
Investing Insights: Citigroup Inc. Earnings Cheat Sheet: Beats the Street on Profit Rise.
Apple (NASDAQ:AAPL) is slightly lower before the opening bell, despite strong iPhone 4S sales. The tech giant says it sold more than 4 million iPhone 4S units in only 3 days. Apple also received a downgrade from BGC Partners from Buy to Hold.
Kinder Morgan (NYSE:KMI) is up 4.5% as they announce a $38 billion deal to buyout El Paso (NYSE:EP). Shares of El Paso are up more than 25% on the news. The deal follows a jump in natural gas production in Texas, Louisiana, and the Northest. Pipeline operators haave also been shifting their routes to reach fast-growing markets in the South.
Lowe’s Companies Inc. (NYSE:LOW) is attracting attention as the company announces plans to layoff 1,950 employees and close 20 stores. The changes will affect the retailer’s earnings by 17 cents to 20 cents per share. The company competes with The Home Depot(NYSE:HD) for home improvement and repair supplies.
Wells Fargo (NYSE:WFC) is falling 5% in early trading after reporting a 21% rise in profit for the third quarter. ”This was a strong quarter for Wells Fargo, with solid growth in loans, deposits, investment securities, and capital, long with improved credit quality and lower expenses,” said Chief Financial Officer Tim Sloan.
Investing Insights: Wells Fargo & Co. Earnings Cheat Sheet: Profitable Quarter Accelerates Growth.
This Afternoon’s Trending Stocks
As the Dow Jones Industrial Average is trading at 11,476 and the S&P 500 Index is trading at 1,208, here are shares buzzing with trade interest today:
- El Paso Corporation (NYSE:EP): Shares of El Paso Corporation are trading higher 23% today after Kinder Morgan announced it will be acquiring the company for $38 billion. El Paso Corporation operates natural gas pipeline and storage facilities, transports natural gas, and imports liquefied natural gas. El Paso also explores for and produces natural gas. The Company has operations in the United States, Brazil, and Egypt.
- Mizuho Financial Group, Inc. (NYSE:MFG): Shares of Mizuho Financial Group, Inc. are trading higher following a very profitable report out of Citigroup this morning. Mizuho Financial Group, Inc. provides comprehensive financial services through its subsidiaries. The Group provides variety of financial services such as general banking, securities brokerage, trust banking, and assets management.
- Sirius XM Radio Inc. (NASDAQ:SIRI): Shares of Sirius XM Radio Inc. are trading higher today. The satellite radio company introduced an upgrade of its current service today called SiriusXM 2.0 which will offer expanded channel offerings. Sirius XM Radio Inc. broadcasts various channels of audio from its satellites. The Company provides its services throughout the continental United States for a monthly subscription fee. Sirius delivers various streams of commercial-free music in every genre, as well as streams of news, sports, weather, talk, comedy, and public radio.
- Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG): Shares of Sumitomo Mitsui Financial Grp, Inc. are trading higher today after rising on the heels of a surge in Citigroup shares this morning. Sumitomo Mitsui Financial Group, Inc. is a holding company established by Sumitomo Mitsui Banking Corporation. Sumitomo Mitsui Card Co., SMBC Leasing Co., and The Japanese Research Institute, Ltd. joined the Group in Feb., 2003. The Company manages financial operations for its subsidiaries. The Group provides commercial banking and a variety of financial services.
- Kinder Morgan Inc (NYSE:KMI): Shares of Kinder Morgan Inc are trading higher today after merging with El Paso in the natural gas industry. Kinder Morgan Inc. is a pipeline transportation and energy storage company. The Company owns and operates pipelines that transport natural gas, gasoline, crude oil, carbon dioxide and other products, and terminals that store petroleum products and chemicals and handle bulk materials like coal and petroleum coke.
- Lloyds TSB Group plc (NYSE:LYG): Shares of Lloyds TSB Group plc are trading lowertoday after last week’s Fitch downgrade. Shares are down 4% this afternoon. Lloyds Banking Group plc, through subsidiaries and associated companies, offers a range of banking and financial services. The Company provides retail banking, mortgages, pensions, asset management, insurance services, corporate banking, and treasury services.
- Wells Fargo & Company (NYSE:WFC): Shares of Wells Fargo & Company are tradinglower over 7% today as the company officially takes over Wachovia branded branches with its own signage and also releases its latest quarter earnings report. Wells Fargo & Company is a diversified financial services company providing banking, insurance, investments, mortgage, leasing, credit cards, and consumer finance. The Company operates through physical stores, the Internet and other distribution channels across North America and elsewhere internationally.
- Petroleo Brasileiro SA (NYSE:PBR): Shares of Petroleo Brasileiro SA are trading lower over 4% today as investors see that more investment will be need in refineries over the next few years. Petroleo Brasileiro S.A. – Petrobras explores for and produces oil and natural gas. The Company refines, markets, and supplies oil products. Petrobras operates oil tankers, distribution pipelines, marine, river and lake terminals, thermal power plants, fertilizer plants, and petrochemical units. The Company operates in South America and elsewhere around the world.
- Vale (NYSE:VALE): Shares of Vale are trading lower over 7% today as steelmakers will have to take price hits and close facilities. Vale SA produces and sells iron ore, pellets, manganese, alloys, gold (NYSE:GLD), nickel, copper, kaolin, bauxite, alumina, aluminum, and potash. The Company is based in Brazil, where it owns and operates railroads and maritime terminals.
Markets closed down on Wall Street today: Dow -2.13%, S&P -1.94%, Nasdaq -1.98%, Oil -0.55%, Gold -0.53%.
Hot Feature: Tim Cook Basks in the Sunlight of Success.
Today’s markets were down because:
1) Germany. Friday gave investors a huge rally on hope for more defined bailout plans for the EU, yet this morning German (NYSE:EWG) Chancellor Angela Merkel, remarked that “dreams that are taking hold again now that with this package everything will be solved and everything will be over on Monday won’t be able to be fulfilled.” She added that ways to end the crisis “surely extends well into next year.” Oops. That’s not what the market wanted to hear. This issue continues to be the gravitational pole for markets.
2) Bank Earnings. Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) announced earnings this morning. Investors first cheered Citi’s data, but later sold the stock after a deeper look confirmed banks are making most of their money from accounting tricks. What else do you expect from financial engineers?
3) Apple. Apple (NASDAQ:AAPL) delivered one of the lone bright spots for investors today. The company confirmed it sold 4,000,000 iPhone 4S devices over the first 3-day period — a new record. Unfortunately, after-hours IBM (NYSE:IBM) and VMWare (NYSE:VMW) missed Wall Street expectations. The news is sure to have a negative impact on tech tomorrow.
After Hours Radar Stocks
Shares of IBM (NYSE:IBM) are down more than 3% in late trading after the company reported third quarter earnings. Net income for International Business Machines Corporation rose to $3.84 billion ($3.19 per share) vs. $3.59 billion ($2.82 per share) in the same quarter a year earlier. This marks a rise of 7% from the year earlier quarter.
Investing Insights: IBM Earnings Cheat Sheet: Positive Earnings Streak.
VMware, Inc. (NYSE:VMW) is down 4.6% after the closing bell. VMWare reported third quarter earnings of $178 million (41 cents per share), compared to earnings of $85 million (20 cents per share) last year. Analysts were expecting earnings of 50 cents a share on revenue of $929.7 million.
Investors are walking all over Crocs, Inc. (NASDAQ:CROX) in extended trading. Shares are down 36% after reducing third quarter guidance. The company cut guidance from 40 cents per share, down to 31-33 cents per share. Shares were halted for 30 minutes, but continued the steep selloff after trading resumed.