Money Advisory

Closing Bell: Profit taking beats the bull (AGN, AIG, DOW, GS, LVS)

2009-03-24T13:48:00.000-07:00

Filed under: Allergan (AGN), Goldman Sachs Group (GS), Amer Intl Group (AIG), Dow Chemical (DOW), Las Vegas Sands (LVS)

Today's lack of a rally came with little surprise. The massive gains yesterday were reminders of the panic buying seen in the past. Profit takers used the strength to unload on the new buyers who chased stocks yesterday.

Confusing housing data caused another brief hope because of an uptick, but that was following a downward revision. The Geithner-Bernanke testimony to Congress today did very little for the markets. Here were today's unofficial closing bell levels:

Dow 7,660.37 -115.49 (-1.49%)
S&P 500 806.37 -16.55 (-2.01%)
Nasdaq 1,518.70 -37.07 (-2.38%)

Top Analyst Upgrades & Downgrades

Continue reading Closing Bell: Profit taking beats the bull (AGN, AIG, DOW, GS, LVS)

Sonic's food may be served fast, but its earnings growth is anything but

2009-03-24T13:47:00.001-07:00

Filed under: Earnings reports

Sonic (NASDAQ: SONC), the drive-in fast-food joint that competes with McDonald's (NYSE: MCD), Wendy's/Arby's Group (NYSE: WEN), Yum! Brands (NYSE: YUM), and Burger King (NYSE: BKC), reported second-quarter earnings after the bell on Monday. You know that video-game character Sonic the Hedgehog? Know how he's fast? Well, Sonic the burger server is unlike Sonic the software character right now when it comes to growing its business.

Continue reading Sonic's food may be served fast, but its earnings growth is anything but

The Geithner Private-Public Partnership: The cure may be worse than the disease!

2009-03-24T13:47:00.000-07:00

Filed under: Market matters, Money and Finance Today, Economic data, Politics, Financial Crisis

As more details were unveiled yesterday about the Public-Private Partnership proposed by Secretary Timothy Geithner to deal with the "Toxic Assets" currently on the balance sheets of many of the major banks, the equity markets around the world experience what can only be described as euphoria. Equity markets in the United States experienced one of the biggest one-day rallies in history. Obviously, Wall Street likes the plan at first glance.

However, Paul Krugman, the liberal Noble Prize winner, wrote an editorial in The New York Times attacking the plan as "Cash for Trash." Subsequently, Newt Gingrich, the former Republican Speaker of the House, announced on Fox News that he agreed with Professor Krugman. When senior figures on both left and right agree, it may be wise to look past the euphoria.

Continue reading The Geithner Private-Public Partnership: The cure may be worse than the disease!

Illumina (ILMN): Genetic workhorse

2009-03-24T13:46:00.001-07:00

Filed under: Newsletters, Stocks to Buy

"Illumina (NASDAQ: ILMN) makes the Genome Analyzer, which is the workhorse of the genetic medicine revolution," says growth expert Mike Cintolo in The Cabot Top Ten Report.

"The Illumina Genome Analyzer is used by genomic research centers, academic institutions, agriculture and livestock companies, pharmaceutical companies, clinical research organizations and biotechnology companies all over the world.

"In the fourth quarter of 2008, for example, the company launched the In? nium HD HumanCytoSNP-12 BeadChip, a 12 sample BeadChip priced as low as $125 per sample that enables researchers to analyze nearly 300,000 genetic markers per sample.

Continue reading Illumina (ILMN): Genetic workhorse

Major losses in store for airlines

2009-03-24T13:46:00.000-07:00

Filed under: UAL Corp (UAUA), Delta Air Lines (DAL)

According to the Associated Press, the International Air Transport Association (IATA) believes that world airlines will lose $4.7 billion this year. A loss of this size is more than world airlines saw following the September 11, 2001 terrorist attacks. The industry group attributes the losses to "the rapid deterioration of the global economic conditions."

This revision basically doubles the earlier forecast from December, causing the CEO of the IATA, Giovanni Bisignani, to note that "The state of the airline industry today is grim ... Demand has deteriorated much more rapidly with the economic slowdown than could have been anticipated even a few months ago." The IATA predicts revenues will drop by $62 billion to $467 billion, a 12% decline.

Continue reading Major losses in store for airlines

What happens when Lyondell Bassell defaults with CDS protection?

2009-03-24T13:45:00.000-07:00

Filed under: International markets, Recession, Financial Crisis

Lyondell Basell is the world's third largest petrochemical group. In January Lyondell put its U.S. units into Chapter 11 bankruptcy and missed its regular coupon payment of $680 million of 2015 European bonds. It was given a 30-day grace period that ran out this week. Then all hell broke loose.

Holders of the debt, including investment banks, had to vote to decide if Lyondell was in default. They voted "yes" on Friday. Now those who sold the credit default protection must come up with payment to cover losses on Lyondell bonds.

Continue reading What happens when Lyondell Bassell defaults with CDS protection?

Oilfield services: Four favorite turnarounds

2009-03-24T13:44:00.001-07:00

Filed under: International markets, Exxon Mobil (XOM), Newsletters, Halliburton (HAL), Schlumberger Limited (SLB), Commodities, Oil, Stocks to Buy

"Many experts believe that oil prices are at unsustainably low prices now, and they expect a sharp rise in the commodity price as supply and demand come back into line again," says turnaround expert George Putnam.

In The Turnaround Letter, he suggests, "If oil does begin to rise again, the oilfield service stocks could rebound sharply." Here, he takes a look at large cap plays on a rebound within the oilfield services sector.

"We all know that oil prices have fallen dramatically from their highs in the summer of 2008. But different types of oil-related stocks have reacted quite differently to the price change in the underlying commodity.

"For example, while oil itself has dropped nearly 70% from its 12-month high, the stock of the largest integrated oil company, Exxon-Mobil (NYSE: XOM), is down only 26%, less than the stock market as a whole.

Continue reading Oilfield services: Four favorite turnarounds

Twitter makes deal with Microsoft

2009-03-24T13:44:00.000-07:00

Filed under: Microsoft (MSFT), Next big thing

I'm a recent user of Twitter. For the most part, I'm not sure about the value proposition. But in light of the site's enormous popularity, I had to take a look.

Well, Microsoft (NASDAQ: MSFT) is also interested -- and is willing to throw some bucks at it. Yes, Twitter is growing up and trying to find ways to monetize its user base.

The initiative is called ExecTweets. As the name implies, this is for business-types (the kinds of people who -- I guess -- buy Microsoft software). That is, Microsoft has a site, in partnership with Federated Media, to aggregate tweets from executives. For what? I'm not sure. And how will we know that the tweeters are executives? I'm not sure of that, either.

Continue reading Twitter makes deal with Microsoft

Carnival (CCL) lifted by Q1 earnings

2009-03-24T13:43:00.001-07:00

Filed under: Earnings reports, Good news, Carnival Corp (CCL), Options, Technical Analysis

Carnival Corp. (NYSE: CCL - option chain) shares are headed higher today after the company posted a first-quarter profit of $260 million, or 33 cents per share, beating analysts' projections of 19 cents per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CCL.

CCL opened this morning at $23.01. So far today the stock has hit a low of $22.98 and a high of $24.94. As of 11:40, CCL is trading at $23.65, up 34 cents (1.5%). The chart for CCL looks bearish and S&P gives CCL a negative 2 STARS (out of 5) sell ranking.

Continue reading Carnival (CCL) lifted by Q1 earnings

Call volume is heavy on DryShips Inc. ahead of 4Q earnings

2009-03-24T13:43:00.000-07:00

Filed under: After the bell, Major movement, Earnings reports, Forecasts, Options

Athens-based shipping issue DryShips Inc. (NASDAQ: DRYS) announced Monday that it will release its fourth-quarter and fiscal 2008 earnings results after the close of trading in New York today, March 24. Ahead of the report, buy-to-open call volume has been consistently heavy on the beaten-down stock.

During the past five days, traders on the International Securities Exchange (ISE) have bought to open 30,875 calls on DRYS, compared to jut 9,697 puts. In other words, bullish bets have been three times more popular than their bearish counterparts.

Continue reading Call volume is heavy on DryShips Inc. ahead of 4Q earnings

Analyst upgrades, downgrades and initiations: PVH, CBS, LDK, BIDU, DE ...

2009-03-24T13:42:00.001-07:00

Filed under: Analyst reports, Analyst upgrades and downgrades, CBS Corp 'B' (CBS), Analyst initiations, Deere and Co (DE)

Analyst upgrades:

Citigroup upgraded Phillips-Van Heusen (NYSE: PVH) to Buy from Hold following the company's Q1 results as it believes management is executing well in the current environment and that the company could meet the high end of guidance. The firm raised its price target to $24 from $19.
Friedman Billings upgraded Cliffs Natural (NYSE: CLF) to Outperform from Market Perform as it believes capacity utilization has stabilized and CLF's valuation is attractive at current levels. The firm raised its price target to $27 from $23.
Thomas Weisel believes demand at Microchip's industrial (NASDAQ: MCHP) customers has troughed and that market share loss concerns are unwarranted. The firm upgraded shares to Overweight from Market Weight and raised its target to $27 from $19.
CBS Corp (NYSE: CBS) was upgraded to Neutral from Sell at Goldman.
U-Store It Trust (NYSE: YSI) was raised to Outperform from Neutral at Baird.
Ener1 (NASDAQ: HEV) was lifted at Banc of America/Merrill to Buy from Neutral.

Continue reading Analyst upgrades, downgrades and initiations: PVH, CBS, LDK, BIDU, DE ...

Time Warner explores on-demand DVD model -- will it work?

2009-03-24T13:42:00.000-07:00

Filed under: Time Warner (TWX), Amazon.com (AMZN), Walt Disney (DIS), Viacom (VIA), Sony Corp ADR (SNE), Media World, Film

I love this news item, and I think shareholders of Time Warner (NYSE: TWX) -- parent company of BloggingStocks -- should, too. Time Warner wants to allow customers the opportunity to buy titles from the media conglomerate's movie catalog via an on-demand DVD protocol. So, if a movie isn't currently available on retail shelves, you could still order it. The title is copied to a disc and sent off to the consumer. No fuss, no mess, no inventory to manage. It's great!

I think on-demand DVD manufacturing needs to be exploited in a bigger way. It isn't new, but you don't really hear about it. Viacom (NYSE: VIA) and Amazon's (NASDAQ: AMZN) on-demand publishing arm, CreateSpace, use it as a way of selling content without carrying inventory. I'd have to believe that if such services were promoted on an extensive basis, they might catch on.

Continue reading Time Warner explores on-demand DVD model -- will it work?

China proposes a new world currency

2009-03-24T13:41:00.001-07:00

Filed under: International markets, China

China is the largest holder of U.S. dollars -- approximately $2 trillion. With the Federal Reserve's program to buy U.S. Treasury bonds and expand the Term Asset-Backed Securities Loan Facility (TALF) program, China is concerned that printing all of this extra money will have a negative impact on China's holdings.

If, for example, as a result of the Fed's moves, the dollar were to fall, any country holding dollar reserves would see their holdings devalued. And this what China fears --that its $2 trillion will be devalued.

Continue reading China proposes a new world currency

Cramer on BloggingStocks: Skeptical of oil drillers

2009-03-24T13:41:00.000-07:00

Filed under: Market matters, Schlumberger Limited (SLB), ConocoPhillips (COP), BP p.l.c. ADS (BP), Oil, Cramer on BloggingStocks

From TheStreet.com Network

TheStreet.com's Jim Cramer says the price of crude isn't high enough to reignite the oil drilling companies.

Crude's awesome and it's really pushing up the whole complex. The stocks of the oils and the oil drillers are powering higher even as drilling is going down hard. Is it possible that the integrateds are right and the drilling stocks are wrong? Or should they both be going up together?

I wrestle over this issue every day because one of the main reasons why oil is going up, besides the endless "dollar-going-down-oil-safe-haven" trade that the media loves to go out with in order to sound smart, is that the drilling around the world has been cut back dramatically. I think that a deal like Suncor (NYSE: SU) (Cramer's Take) and Petro-Canada (NYSE: PCZ) (Cramer's Take) is great for the oils. It makes me recognize that there is value here in the group. I also believe the demand is real.

Continue reading Cramer on BloggingStocks: Skeptical of oil drillers

Today's technical outlook: Does the rally have legs?

2009-03-24T13:40:00.001-07:00

Filed under: Technical Analysis, S and P 500, DJIA

As I've said before, bear market rallies can be devastating to the short sellers because just as it looks like the market is turning lower, a piece of positive news occurs at a time when the market is most oversold and the shorts run for cover.

This usually drives the market higher with a dramatic explosion of buying, but just as the shorts exhaust their panic buying, the market turns down and eventually buries any new bulls as it dives to its former low.

Continue reading Today's technical outlook: Does the rally have legs?

Simon (SPG) says stock - not cash - for dividend

2009-03-24T13:40:00.000-07:00

Filed under: Bad news, Stocks to Sell

When the largest publicly traded real estate investment trust (REIT) in the United States speaks, investors listen.

Simon Properties Group (NYSE: SPG) announced in January that it would be paying dividends in stock rather than cash for the current quarter and, presumably, in future quarters. The company's board of directors voted a 90-cent quarterly dividend, with 90% to be paid in stock and the remainder to be paid in cash.

REITs have long been a favorite for dividend savvy investors looking for a tax-advantaged return from the companies in which they invest. The move by Simon Property has stirred unease in the REIT marketplace in general, and for Simon in particular.

Continue reading Simon (SPG) says stock - not cash - for dividend

Options Update: Financial Select Sector and PHLX Bank Index volatility stays elevated

2009-03-24T13:39:00.001-07:00

Filed under: Options

Financial Select Sector (NYSE: XLF) closed $9.48. XLF top holding in the fund are JPM, WFC, BAC, GS, USB, C, MET, TRV and AXP. XLF April call implied volatility is at 95, puts are at 75; above its 26-week average of 66, according to Track Data, suggesting larger price movement.

PHLX Bank Index (NYSE: BKX) a capitalization-weighted index composed of 24 geographically diverse banks, closed at $30.88. BKX April option implied volatility is at 100; May is at 93 according to Track Data, suggesting large price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Goldman: Pulling the trigger on some mega-deals?

2009-03-24T13:39:00.000-07:00

Filed under: Deals, Goldman Sachs Group (GS)

Over the years, Goldman Sachs (NYSE: GS) has amassed a hefty portfolio of investments.

And now the firm may be ready to take some money off the table -- especially to pay down the onerous TARP loans.

According to a report in the Wall Street Journal [a paid publication], it looks like Goldman is thinking about unloading a part of its 4.9% stake in the Industrial & Commercial Bank of China Ltd. It could result in more than a billion in cash (or about 15% to 20% of the equity stake). The deal could happen by late April (this is when a lock-up expires on the investment).

Continue reading Goldman: Pulling the trigger on some mega-deals?

Before the bell: Stocks poised for a weaker start after Monday's rally

2009-03-24T13:38:00.000-07:00

Filed under: Before the bell, International markets, Market matters, Amer Intl Group (AIG), Economic data, Oil, Federal Reserve, Financial Crisis

It was to be expected that a day after Wall Street's big rally -- biggest since November -- U.S. stock futures would be lower, pointing to sluggish start for stocks Tuesday morning. If on Monday investors welcomed the administration's plan to buy toxic assets from struggling banks, today they would tune into testimony about AIG.

Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke are testifying later today before the House Financial Services Committee on the bonuses paid to American International Group (NYSE: AIG), but after discussing that, they may also be grilled on the new risks to taxpayers from the latest plan unveiled Monday to take over up to $1 trillion in dodgy mortgage securities with the help of private investors.

Continue reading Before the bell: Stocks poised for a weaker start after Monday's rally

Oilfield services: Four favorite turnarounds

2009-03-24T11:49:00.000-07:00

Filed under: International markets, Exxon Mobil (XOM), Newsletters, Halliburton (HAL), Schlumberger Limited (SLB), Commodities, Oil, Stocks to Buy

Continue reading Oilfield services: Four favorite turnarounds

Twitter makes deal with Microsoft

2009-03-24T11:48:00.001-07:00

Filed under: Microsoft (MSFT), Next big thing

I'm a recent user of Twitter. For the most part, I'm not sure about the value proposition. But in light of the site's enormous popularity, I had to take a look.

Well, Microsoft (NASDAQ: MSFT) is also interested -- and is willing to throw some bucks at it. Yes, Twitter is growing up and trying to find ways to monetize its user base.

Continue reading Twitter makes deal with Microsoft

Carnival (CCL) lifted by Q1 earnings

2009-03-24T11:48:00.000-07:00

Filed under: Earnings reports, Good news, Carnival Corp (CCL), Options, Technical Analysis

Carnival Corp (NYSE: CCL - option chain) shares are headed higher today after the company posted a first-quarter profit of $260 million, or 33 cents per share, beating analysts' projections of 19 cents per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CCL.

CCL opened this morning at $23.01. So far today the stock has hit a low of $22.98 and a high of $24.94. As of 11:40, CCL is trading at $23.65, up 34 cents (1.5%). The chart for CCL looks bearish and S&P gives CCL a negative 2 STARS (out of 5) sell ranking.

Continue reading Carnival (CCL) lifted by Q1 earnings

Call volume is heavy on DryShips Inc. ahead of 4Q earnings

2009-03-24T11:47:00.000-07:00

Filed under: After the bell, Major movement, Earnings reports, Forecasts, Options

Continue reading Call volume is heavy on DryShips Inc. ahead of 4Q earnings

Analyst upgrades, downgrades and initiations: PVH, CBS, LDK, BIDU, DE ...

2009-03-24T11:46:00.000-07:00

Filed under: Analyst reports, Analyst upgrades and downgrades, CBS Corp 'B' (CBS), Analyst initiations, Deere and Co (DE)

Analyst upgrades:

Citigroup upgraded Phillips-Van Heusen (NYSE: PVH) to Buy from Hold following the company's Q1 results as it believes management is executing well in the current environment and that the company could meet the high end of guidance. The firm raised its price target to $24 from $19.
Friedman Billings upgraded Cliffs Natural (NYSE: CLF) to Outperform from Market Perform as it believes capacity utilization has stabilized and CLF's valuation is attractive at current levels. The firm raised its price target to $27 from $23.
Thomas Weisel believes demand at Microchip's industrial (NASDAQ: MCHP) customers has troughed and that market share loss concerns are unwarranted. The firm upgraded shares to Overweight from Market Weight and raised its target to $27 from $19.
CBS Corp (NYSE: CBS) was upgraded to Neutral from Sell at Goldman.
U-Store It Trust (NYSE: YSI) was raised to Outperform from Neutral at Baird.
Ener1 (NASDAQ: HEV) was lifted at Banc of America/Merrill to Buy from Neutral.

Continue reading Analyst upgrades, downgrades and initiations: PVH, CBS, LDK, BIDU, DE ...

Time Warner explores on-demand DVD model -- will it work?

2009-03-24T11:45:00.001-07:00

Filed under: Time Warner (TWX), Amazon.com (AMZN), Walt Disney (DIS), Viacom (VIA), Sony Corp ADR (SNE), Media World, Film

Continue reading Time Warner explores on-demand DVD model -- will it work?