Ultimate Market Recap: Super Committee Isn’t Super, Hewlett-Packard Earnings Disappoints

November 21, 2011

Monday Morning’s Top Stories

Leaders of the 12-member U.S. congressional “super committee” are expected to announce their defeat in a joint statement today after three months of talks over tax and spending disagreements. The panel’s inability to agree will be another display of a broken Washington. The lawmakers aren’t expected to revisit the issue until 2013 as the 2012 presidential and congressional elections will take center stage.

Mariano Rajoy and his People’s Party won the biggest majority in a Spanish (NYSE:EWP) election in almost 30 years on Sunday, sweeping the ruling Socialists from power after eight years and winning an absolute majority in Parliament, with 186 of 350 seats.

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The Bundesbank, Germany’s (NYSEARCA:EWG) central bank, has cut its forecast for 2012′s economic growth. According to its monthly report, the bank projected gross domestic product to expand between 0.5 percent to 1 percent as compared to a previous 1.8 percent prediction. It also said that a “pronounced weak phase” could take place if Europe’s sovereign debt crisis becomes worse as well as potential rough times for Germany’s economy from weakening foreign demand and unrest in the financial markets.

Japan’s (NYSE:EWJ) parliament passed an additional YEN $12.1 trillion ($157 billion) for its budget including the issuance of new bonds as a rebuilding payment from the country’s March earthquake. The increase will also go to reconstruction spending (YEN $9.2 trillion) with YEN $500 billion toward subsidies to the firms affected by the yen’s rise as an incentive not to move its factories and jobs outside the country.

Western Digital Corp. (NYSE:WDC) will pay $525 million in an arbitration to its rival Seagate Technology LLC (NASDAQ:STX). The damages come after claims against Western Digital and a former Seagate employee who alleged “misappropriation of confidential information and trade secrets” according to a Western Digital statement.

John Coyne, Western Digital’s CEO said, “We do not believe there is any basis in law or fact for the damage award of the arbitrator.” The company plans to challenge the verdict.

Investing Insights: Gold Demand Increases As Central Bank Purchases Jump 556%.

Monday Morning Hot Stocks

Shares of Western Digital (NYSE:WDC) are popping 3% this morning after the company said that an arbitrator in Minnesota ruled against the company in a dispute with Seagate Technology (NASDAQ:STX). Claims by Seagate Technology were filed against Western Digital and a former Seagate employee.

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Pharmasset Inc. (NASDAQ:VRUS) is ripping 85% higher at the open after agreeing to be acquired for $137 per share by Gilead Sciences Inc. (NASDAQ:GILD). In a statement, the companies explained the deal was already approved by Pharmasset’s board.

Tyson Foods Inc. (NYSE:TSN) is down 2% after announcing fourth quarter results. Net income for Tyson Foods Inc. fell to $97 million (26 cents per share), compared to $213 million (57 cents per share) a year earlier. This is a decline of 54.5% from the year earlier quarter.

Investing Insights: Tyson Foods Inc. Earnings Cheat Sheet: Margins Suffer as Costs Rise, Profit Falls.

Transatlantic Holdings Inc. (NYSE:TRH) popped nearly 3% early Monday after the company agreed to be purchased by Alleghany Corp. (NYSE:Y). The deal is valued at $3.4 billion, or $59.79 per share.

Shares of Toll Brothers Inc. (NYSE:TOL) announced it will pay an undisclosed price to purchase CamWest Development LLC in a bid by the home builder to move to Seattle. Shares are currently down about 2%.

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Monday’s Trending Stocks

Monday morning trading the week of Thanksgiving holiday has proven to be a seller’s paradise. The Dow Jones Industrial Average is down a little under 300 points and the S&P 500 Index is down 2%. Here are the hottest stocks on Wall Street:

Gilead Sciences, Inc. (NASDAQ:GILD): Shares of Gilead Sciences, Inc. are trading lower 12% today. Gilead Sciences, Inc. is a research-based biopharmaceutical company that discovers, develops, and commercializes therapeutics to advance the care of patients suffering from life-threatening diseases. The Company’s primary arees of focus include HIV/AIDS, liver disease and serious cardiovascular and respiratory conditions.
Pharmasset, Inc. (NASDAQ:VRUS): Shares of Pharmasset, Inc. are trading higher 84% today. Pharmasset, Inc. is a pharmaceutical company. The Company develops oral therapeutics for the human immunodeficiency virus (HIV), hepatitis B (HBV), and hepatitis C (HCV).
Alleghany Corporation (NYSE:Y): Shares of Alleghany Corporation are trading lower 7% today. Alleghany Corporation, through its subsidiaries, is involved in the property and casualty and surety insurance business. The Company also provides reinsurance to Alleghany group operating units and affiliates own and manages properties in the Sacramento, California region, as well as conducts corporate investment and other activities.
Transatlantic Holdings, Inc. (NYSE:TRH): Shares of Transatlantic Holdings, Inc. are trading higher 1.5% today. Transatlantic Holdings, Inc. is an international reinsurance organization. The Company’s subsidiaries provide reinsurance on a treaty and facultative basis around the world. Transatlantic structures traditional and non-traditional programs for a full range of property and casualty products, with an emphasis on specialty risks.
Tyson Foods, Inc. (NYSE:TSN): Shares of Tyson Foods, Inc. are trading lower over 1% today. Tyson Foods, Inc. produces, distributes, and markets chicken, beef, pork, prepared foods and related allied products. The Company’s products are marketed and sold to national and regional grocery retailers, regional grocery wholesalers, meat distributors, warehouse club stores, military commissaries, and industrial food processing companies.
Global Education & Technology Group (NASDAQ:GEDU): Shares of Global Education & Technology Group are trading higher 96% today. Global Education & Technology Group Ltd. provides educational courses and related services in China with a focus on foreign language training and test preparation. The Company operates learning centers throughout China.
BSD Medical Corporation (NASDAQ:BSDM): Shares of BSD Medical Corporation are trading higher 11% today. BSD Medical Corporation develops, produces, markets, and services heat therapy equipment. The Company’s hyperthermia and thermotherapy equipment is used to treat both cancerous and benign diseases. BSD markets its cancer hyperthermia products primarily to radiation oncology departments in the United States, and to radiation oncology and chemotherapy oncology departments internationally.
Tech Data Corporation (NASDAQ:TECD): Shares of Tech Data Corporation are trading lower over 2% today. Tech Data Corporation is a full-line distributor of technology products. The Company serves resellers in the United States, Canada, the Caribbean, Latin America, Europe, and the Middle East. Tech Data also provides pre- and post-sale training, service, and support, as well as configuration and assembly services and electronic commerce solutions.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN): Shares of Regeneron Pharmaceuticals, Inc. are trading higher 9% today. Regeneron Pharmaceuticals, Inc. is a biopharmaceutical company that discovers, develops, and commercializes pharmaceutical products for the treatment of serious medical conditions. The Company has therapeutic candidates in clinical trials for the potential treatment of cancer, eye diseases, and inflammatory diseases, and has preclinical programs in other diseases and disorders.
Piedmont Natural Gas Company Inc. (NYSE:PNY): Shares of Piedmont Natural Gas Company Inc. are trading lower over 2% today. Piedmont Natural Gas Company, Inc. is an energy and services company that primarily transports, distributes, and sells natural gas. The Company serves residential, commercial, and industrial customers in North Carolina, South Carolina, and Tennessee. Piedmont also, through subsidiaries, markets natural gas to customers in Georgia, and distributes propane in various states.

Market Recap

Markets closed down on Wall Street today: Dow -2.11%, S&P -1.86%, Nasdaq -1.92%, Oil -0.36%, Gold -2.45%.

On the commodities front, Oil (NYSE:USO) fell to $97.32 a barrel. Precious metals were also down, with Gold (NYSE:GLD) falling to $1,682.80 an ounce while Silver (NYSE:SLV) fell 2.44% to settle at $31.58.

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Today’s markets were down because:

1) Europe. Mariano Rajoy and his conservative People’s Party won the biggest majority in a Spanish election in almost 30 years on Sunday, but despite Rajoy’s pledge last night in his victory speech that Spain would “stop being a problem and become part of the solution again,” investors were unsurprisingly not relieved. While Rajoy’s absolute majority means he will have no trouble pushing through heavy-handed austerity measures that will make the EU happy, the general consensus now seems to be that only eurobonds or a massive bond purchasing program can effectively tackle the sovereign debt crisis and put an end to its rampage through Europe, both of which have met with heavy opposition from the euro zone’s biggest players.

2) Congress. The 12-member congressional supercommittee tasked with finding at least $1.2 trillion in budget savings over the next decade essentially declared defeat today after three months of talks ended in a stalemate, finally quashing any remaining hope that Congress can put aside party politics in order to compromise for the sake of getting things done. Without a debt deal, automatic spending cuts will kick in at the beginning of 2013 — cuts that deal a heavy blow to both social programs and defense spending, thus dealing both Republicans and Democrats a heavy blow.

3) Banks. Though selling was broad today, financial shares were the biggest losers, as usual. JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), and Bank of America (NYSE:BAC) all declined more than 3%.

BONUS: Foreigners Prove U.S. Dollar Still Safest Currency in the World

After Hours Radar Stocks

Shares of Hewlett-Packard (NYSE:HPQ) are edging higher in late trading after reporting fourth quarter results. Net income for the diversified computer systems company fell to $239 million (12 cents per share), compared to $2.54 billion ($1.10 per share) a year earlier. The company reported adjusted net income of $1.17 per share. By that measure, the company beat the mean estimate of $1.13 per share.

Investing Insights: Hewlett Packard Co. Earnings Cheat Sheet: Revenue Slips After Increasing Four Quarters in a Row, Net Income Declines.

Analog Devices Inc. (NYSE:ADI) is down nearly 1% in extended trading after releasing earnings. Net income for the semiconductor company fell to $183.5 million (60 cents per share), compared to $225 million (73 cents per share) a year earlier. This is a decline of 18.4% from the year earlier quarter.

Don’t Miss: Analog Devices Inc. Earnings Cheat Sheet: Margins Shrink on Revenue Declines, Net Income Falls.

Brocade Communications Systems (NASDAQ:BRCD) are popping more than 5% after the closing bell. The company dropped to a fourth quarter loss, but results topped expectations. BRCD reported adjusted net income of 16 cents per share. By that measure, the company beat the mean estimate of 6 cents per share. It beat the average revenue estimate of $527.1 million.

Investing Insights: Brocade Communications Systems Inc. Earnings Cheat Sheet: Reversing to a Loss Following Two Consecutive Quarters of Profit.

After reporting a 92% jump in profit, shares of Dycom Industries Inc. (NYSE:DY) are surging more than 7%. The company reported a profit of $13 million (38 cents per share), compared to $6.7 million (18 cents per share) last year.

Shares of Jack in the Box Inc. (NASDAQ:JACK) are popping after the fast-food burger joint posted better-than-expected earnings. Net income increased to $22.7 million (49 cents per share), compared to only $4 million (7 cents per share) last year. Shares of McDonald’s (NYSE:MCD) and Yum! Brands, Inc. (NYSE:YUM) are edging lower in late trading.

Don’t Miss: Jack In The Box Inc. Earnings Cheat Sheet: Beats Estimates.