Spain had a successful debt sale, raising more money than expected but also at a higher rate than expected. We have oil getting hit hard, which should be good for the general market, but not commodity stocks so it will be interesting to see how that plays out. Currently US futures are lower, following world markets lower.
Looking at the economic news due out today we have the Initial Claims (Consensus 380k), Continuing Claims (Consensus 3278k), Existing Home Sales (Consensus 4.56 million), Philadelphia Fed (Consensus -0.2), Leading Indicators (Consensus 0.0%) and the FHFA Housing Price Index. Should be plenty of news for the market to digest, and the financial markets and political pundits will be most concerned about the jobs numbers.
If any readers have certain stocks they would like to get an opinion on, submit it to our message box here on Seeking Alpha or via our email and we will include it in an article. Please select companies with market caps at least around $500 million with volume of at least 1 million shares a day. We will try to include as many of these as possible each week.
Looking at Asian markets we see markets are lower:
All Ordinaries - down 1.03%
Shanghai Composite - down 1.40%
Nikkei 225 - up 0.82%
NZSE 50 - down 1.03%
Seoul Composite - down 0.79%
In Europe markets are down:
CAC 40 - down 0.26%
DAX - up 0.53%
FTSE 100 - up 0.56%
OSE - up 1.51%
Technology
Sirius XM (SIRI) closed yesterday at $1.92/share after rising $0.01 (0.52%) closing right at the level we wanted to see shares close above. Considering the way the market traded yesterday we will look at this as a small victory. Volume was a bit light once again, with 22.3 million shares trading hands which is below the three month average. Today we would look for this one to trade higher, although the market does appear headed lower, and see if it can close above the $1.92/share level we have been watching and if it does that would surely present a bullish case for the shares.
Biotechnology
Arena Pharmaceuticals (ARNA) was strong once again. It has been up every day this week and has put together a very nice winning streak going back to last week. Shares were up $0.80 (8.25%) to close at $10.50/share yesterday on volume of 30.3 million shares, which very healthy volume for the company. We did think that the shares were due for a rest, but they managed to break through the $10/share level and hold it which is most certainly bullish and now investors need to look to next week for the FDA news regarding their weight loss drug and whether it gets approved or not. Obviously the market is betting that it is approved, and we would have to agree with this. It is the safest of the drugs and unlike some of the others up for approval it does not have a combination with another drug which has a history of negative health effects for patients.
Banking
JP Morgan (JPM) was up $1.07 (3.02%) yesterday to close at $36.45/share on volume of 61 million shares. Volume was a good bit above the three month average on news that the bank had mostly closed its big losing position which the 'London Whale' had set up through its CIO office. We had recommended closing out the put position we sold on the news of this position being such a big loser for the company at a nice gain, but after this move any readers still with that position open should close it and take the gain. We like the company and think that it will recover further, but with this big move in a short period of time we feel that it is best to book the profits - especially in a market like we currently find ourselves.
Retailing
Walgreen (WAG) was down $0.88 (2.92%) to close at $29.21/share in trading yesterday on volume of 32.9 million shares, the second day that shares finished lower due to investor sentiment regarding the acquisition announced two days ago. The market believes that the company overpaid on its latest acquisition, and further there are issues about same store sales here in the US. This is one of the premier retailing franchises in the US and rarely does the company have missteps, but it is obvious that investors are beginning to worry about management's plan at this point.
JC Penny (JCP) was up $1.24 (5.57%) to close at $23.49/share on volume of 13.3 million after being down hard earlier this week. It appears that the CEO is digging himself in, and there are now some reports coming out that the company's strategy is paying off. We think that it is a bit too early to declare victory, as it takes time to train the consumer but this is a step in the right direction if it can hold up over time. When it comes to retail we feel that there are far better plays out there and thus will not recommend a position in JC Penny's shares anytime soon.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
