U.S. stock futures were lower Wednesday morning after two volatile sessions that recorded a 777 point drop in the Dow, then a remarkable 485 point recovery. No doubt, investors are jittery ahead of the vote in the Senate today on the controversial $700 billion bailout package. Will it pass in the Senate after failing in the House? The two plans are slightly different. Some data might also affect the mood today with the Institute of Supply Management's manufacturing index for September and the September ADP employment estimate on tap. For now, the indication calls for a selloff in stocks at the start of trade today.
Google Inc. (NASDAQ: GOOG) - the Nasdaq Stock Market canceled a few trades in Google late Tuesday following an inexplicable slide in price the exchange blames on mistaken routing from other exchanges. Google shares, which were trading up about 8% for most of the session, fell between 10%-16% in the final minutes, bringing its closing price to $341.39. The Nasdaq also reset the stock's closing price at $400.52. Google shares are up in pre-market trading to about $409.
Automakers also are due to report monthly auto sales for September. Sales for GM (NYSE: GM) and Ford (NYSE: F) are expected to be weak, perhaps the worst in several years. Shares of Ford decline over 5% in after-hours Tuesday.
Daimler (NYSE: DAI) shares declined nearly 8% in pre-market trade after some rumors, denied by the company by now, suggested DAI would issue a profit warning.
TheStreet.com's Jim Cramer says that even in lousy markets -- and this is one of them -- you can find stocks to buy.
When nothing's working, something's working. I know sounds counterintuitive. but there is simply no reason to think, as bad as this market is -- and it is really, really bad -- that there isn't something to buy.
But are they really hurting General Mills (NYSE: GIS) (Cramer's Take)? Can I see selling Procter & Gamble (NYSE: PG) (Cramer's Take) because of them? After we know the price increases are all baked in? And don't hit me with that strong-dollar stuff, because GIS doesn't have that much overseas exposure. Same with Pepsi (NYSE: PEP) (Cramer's Take): This is a national company with an international arm that is generating oodles of cash and doesn't have as much bad commodity exposure as it did a few months ago.
U.S. stock futures were mixed on Tuesday. Following Monday's broad sell-off and volatile session, which was also marked by low volume, today might not be different -- volatile and low volume. Several reports are in focus today, specifically some housing data that could shine more light on the sector, and consumer confidence, which could also move stocks. Meantime, oil prices declined and the dollar strengthened against major currencies.
Rio Tinto (NYSE: RTP) shares are down over 3% in premarket trading after the mining giant reported fiscal first-half profit more than doubled. RTP's acquisition of Alcan and soaring commodity prices helped Rio achieve the results. RTP shares have been declining due to worldwide slower growth.
Meanwhile, Anadarko Petroleum (NYSE: APC) shares were 2.4% higher in after-hours after it announced a plan to buy back up to $5 billion of stock.
Staying with share buybacks, Coach (NYSE: COH) are also 1.7% higher in premarket trading after announcing a buyback program of up to $1 billion, which follows the completion of a similar repurchase.
And of course, Lehman Brothers (NYSE: LEH). Shares of the embattled banker are rising this morning following speculation that Kohlberg Kravis Roberts may be interested in buying Neuberger Berman, according to CNBC, while Blackstone Group backed away.
Stock futures were mixed Monday morning, indicating stock would start on a down note a week full of economic data. This morning, investors are focusing on rising oil prices and existing home sales data to be released at 10:00 a.m. EDT. Also, over the weekend, Federal Reserve Chairman Bernanke commented from the Fed's yearly retreat, saying that problems in credit markets not yet over and are a threat to economy. Meanwhile, economists are saying inflation is catching up to the credit crisis as the major concern for the economy.
American International Group's (NYSE: AIG) credit ratings may be downgraded by Fitch due to uncertainties over AIG's exposure to mortgage backed securities. AIG was down 1.5% in after-hours Friday.
The Australian government approved Chinalco 14.99% stake in Rio Tinto's (NYSE: RTP) but warned the Chinese firm against buying more shares without prior approval. Alcoa (NYSE: AA) backed the purchase. RTP shares were up over 1% in Australian trading.
Broadcom Corp. (NASDAQ: BRCM) will pay around $192.8 million in cash to acquire chipmaker Advanced Micro Devices Inc.'s (NYSE: AMD) digital TV business, the companies announced Monday.
Eoin Treacy of Fullermoney says that as commodities prices weaken, you need to look carefully before investing.
Q. Eoin, I've read that China's annual consumption of copper has declined from a 28.66% growth rate to 2.4%. What does that mean for continued growth in China and also for the global copper market?
A. China and indeed much of Asia and the Middle East are in a generational-long period where they have to build infrastructure from the ground up. The push for educating, housing, transporting and employing large young populations requires massive investment, fueling demand for commodities across the boards.
The supply side was completely taken unawares by this demand following the 20-year crushing bear market that cut exploration budgets to the bone. That is now changing, as major mining groups compete for the best resources, particularly in politically stable parts of the world.
China continues to lead the world in terms of GDP growth, although it has recently manufactured a slowdown to combat rising inflation, generally positive for the economy.
According to people familiar with the discussions, the Wall Street Journal reported that Microsoft Corporation (NASDAQ: MSFT) has held discussions with Time Warner Inc (NYSE: TWX) and News Corporation (NYSE: NWS), among others, about joining it in a deal that could lead to the breakup of Yahoo! Inc (NASDAQ: YHOO). Some of the sources said the preliminary talks are unlikely to result in a deal with Yahoo!
Johnson & Johnson (NYSE: JNJ) is reportedly in exclusive talks to sell its wound-care business Ethicon to the private-equity arm of JP Morgan Chase & Co (NYSE: JPM), according to the Wall Street Journal. Terms of the potential deal were not disclosed.
OTHER PAPERS:
Sources familiar with the inquiry said that the Justice Department has opened a formal antitrust investigation into a deal that would allow Google Inc (NASDAQ: GOOG) to provide some search advertising for Yahoo!. The Washington Post reported that investigators will demand documents from Google and Yahoo!, as well as other large companies in the media and Internet industries.
WEB SITES:
Reuters reported that regulators in the European Union are looking at the long-term effects of BHP Billiton Limited's (NYSE: BHP) $170B bid for Rio Tinto Group (NYSE: RTP). Sources familiar with the EU questionnaire said regulators have asked competitors and customers about effects of the deal on their businesses through 2015.
Since 1975, Lakshmi Mittal has turned ArcelorMittal (NYSE: MT) into a global steel powerhouse. As a result, he's worth in excess of $45 billion. Actually, as an indication of his power, Mittal is now a board member of Goldman Sachs Group, Inc. (NYSE: GS).
And, no doubt, his dealmaking is likely to continue. In fact, there are reports that ArcelorMittal will make a play for Rio Tinto Group, which is the #2 ore producer in the world. The company is currently ensnared in a hostile takeover from BHP Billiton Ltd. (NYSE: BHP). Basically, ArcelorMittal may make an equity investment, which could exceed $10 billion.
Why? ArcelorMittal needs to find ways to stabilize its raw material supplies. After all, with pricing pressures, it's important to contain things.
Then again, this may ultimately be mostly noise -- to get traders excited. But, in light of ArcelorMittal's global power, investors will definitely listen.
The Wall Street Journal reported that, in an attempt to move past its takeover battle with Microsoft Corporation (NASDAQ: MSFT), Yahoo! Inc (NASDAQ: YHOO) is planning a reorganization. People familiar with the matter said executives are discussing a plan to centralize numerous product groups into a global-product organization. Details may be announced next week.
The Wall Street Journal also reported that an internal feud at Live Nation Inc (NYSE: LYV) over strategy may soon be resolved, as the concert promoter is reportedly negotiating the exit of chairman Michael Cohl.
OTHER PAPERS:
A recommendation by an Australian commission to open Rio Tinto Group's (NYSE: RTP) Pilbara railway to third parties could cost $30B if the idea is implemented, Rio contended and the Australian reported. The National Competition Commission, which advises Australian governments on infrastructure issues, has suggested that Fortescue Metals Group be given access to certain rail lines operated by Rio Tinto.
WEB SITES:
A joint investigation by CBC News and the Canadian Press found one-third of people shot by Taser International Inc's (NASDAQ: TASR) Tasers reportedly required some medical attention, Engadget reported.
TechCrunch confirmed that Joshua Schachter, the founder of delicious, will resign from Yahoo!. Sources believe the near-stalled development of the new version of delicious may have played a part in his resignation.
Macy's (NYSE: M), which was forecast to report a loss of a penny a share in the first quarter, said the difficult retail environment hurt sales and it incurred costs from a restructuring. The loss came to $59 million, or 14 cents a share, compared with a profit of $36 million, or 8 cents a share, a year earlier. (As the numbers are quite fresh, it's possible they include one-time item not yet sorted out and not comparable to analyst expectations.)
John Deere (NYSE: DE) said its second-quarter profit rose 22%. Deere experienced increased demand for its farm equipment, as crop prices kept rising, posting an 18% increase in sales. Profit for the quarter jumped to $763.5 million, or $1.74 per share, a penny below analyst estimates. From premarket early action, it seems shares of DE might start much lower.
Freddie Mac (NYSE: FRE) also reported this morning, saying its first quarter loss widened to $151 million as the U.S. housing market worsened. Somehow, though, the results were not as poor as expected and FRE's loss of 66 cents a share beat estimates of a 92 cents a share loss. FRE's shares are up over 6% in premarket trading.
Still on earnings, last night Whole Foods (NASDAQ: WFMI) and Electronic Arts (NASDAQ: ERTS) reported results. Shares of WFMI are plunging nearly 9% in premarket trading as the organic grocery chain reported a worse-than-forecast 13% profit fall.
Electronic Arts (NASDAQ: ERTS) shares are also declining over 2.8% in premarket trading after the suitor of Take-Two Interactive (NASDAQ: TTWO) reported a widening quarterly loss and a disappointing outlook.
The Wall Street Journal reported that Ford Motor Company (NYSE: F) CEO Alan Mulally isn't done cost-cutting. According to people close to the situation, Mulally is considering more job cuts, selling its Volvo brand and closing the troubled Mercury brand.
BHP Billiton Limited (NYSE: BHP) CEO Marius Kloppers strongly criticized Rio Tinto Plc (NYSE: RTP) and its CEO yesterday, the Financial Times reported. BHP Billiton has outperformed Rio Tinto in several areas, including share price appreciation and EPS growth, said Kloppers, adding, "On every metric I can envisage they [Rio] have been beaten."
OTHER PAPERS:
According to the Economic Times, AT&T Inc (NYSE: T) is reportedly in preliminary talks with Malaysia's Maxis Communications about buying its 74% stake in Indian cellular phone company Aircel, sources said.
The United Auto Workers union has rejected several "generous" benefit and wage proposals, according to American Axle & Manufacturing Holdings Inc (NYSE: AXL). In a statement yesterday, the Detroit News reported that American Axle said while tentative agreements had been reached on several issues, the UAW "repeatedly rejected" other proposals that were "considerably higher than the market rate."
MOST NOTEWORTHY: Jefferies Group, Quality Systems and Techwell were today's noteworthy initiations:
Friedman Billings initiated Jefferies Group (NYSE: JEF) with a Market Perform citing the difficult underwriting environment and challenging credit market.
JMP Securities initiated Quality Systems (NASDAQ: QSII) with an Outperform rating and $35 target. The firm expects the company's practice management and electronic medical record solutions to benefit from growth opportunities within the ambulatory market.
Techwell (NASDAQ: TWLL) was assumed with an Overweight rating and $14 target at Thomas Weisel, as they expect TWLL to have continued stable revenue growth given its market leadership and increased global security demand.
OTHER INITIATIONS:
Bernstein initiated NetSuite (NYSE: N) with a Market Perform rating and $23 target.
Keefe Bruyette started Comerica (NYSE: CMA) with a Market Perform rating and $37 target.
MOST NOTEWORTHY: BHP Billiton, Rio Tinto and Prudential Financial were today's noteworthy upgrades:
Bernstein upgraded shares of BHP Billiton (NYSE: BHP) and Rio Tinto (NYSE: RTP) to Outperform from Market Perform as they believe urbanization in China will increase demand for metals.
Prudential Financial (NYSE: PRU) was raised to Overweight from Underweight at Lehman as they believe the company's exposure to commercial mortgage-backed securities is limited.
U.S. stock futures were lower Wednesday morning after two volatile sessions that recorded a 777 point drop in the Dow, then a remarkable 485 point recovery. No doubt, investors are jittery ahead of the vote in the Senate today on the controversial $700 billion bailout package. Will it pass in the Senate after failing in the House? The two plans are slightly different. Some data might also affect the mood today with the Institute of Supply Management's manufacturing index for September and the September ADP employment estimate on tap. For now, the indication calls for a selloff in stocks at the start of trade today.
U.S. stock futures were mixed on Tuesday. Following Monday's broad sell-off and volatile session, which was also marked by low volume, today might not be different -- volatile and low volume. Several reports are in focus today, specifically some housing data that could shine more light on the sector, and consumer confidence, which could also move stocks. Meantime, oil prices declined and the dollar strengthened against major currencies.
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