It is once again "Jobs Thursday" and we have monthly data out too. Friday will have the government's monthly job numbers, and between this morning and tomorrow, investors should be able to get a pretty good idea of where we stand on the jobs front after all the data is out. It was great to get back to a bit of normalcy yesterday with the great effort the exchanges went to in order to open up, and we wish all of our readers and those in the northeast the best of wishes as that area of the country recovers from the storm. Hundreds of thousands are without power still, but the industry is working diligently to get the grid up and running again and have quickly restored power to large geographical areas already. The disaster relief worker lending program is one of the things that the electric utilities do right and those men and women from across the country are doing some great work right now.
We have economic news due out today, and it is as follows:
- Challenger Job Cuts - N/A
- ADP Employment Change - 143K
- Initial Claims - 375K
- Continuing Claims - 3249K
- Productivity-Prel - 1.6%
- Unit Labor Costs - 1.4%
- ISM Index - 51.0
- Construction Spending - 0.8%
- Consumer Confidence - 72.0
- Crude Inventories - N/A
Asian markets finished mixed:
- All Ordinaries - down 1.22%
- Shanghai Composite - up 1.72%
- Nikkei 225 - up 0.21%
- NZSE 50 - down 0.66%
- Seoul Composite - up 0.71%
In Europe markets are trading higher this morning:
- CAC 40 - up 0.11%
- DAX - up 0.29%
- FTSE 100 - up 0.30%
- OSE - up 0.07%
Vringo (VRNG) shares closed at $2.561/share after trading lower by $1.439 (35.97%) and being halted during yesterday's trading session. Volume was well above the three month average with 31.3 million shares trading hands after a judge ruled that the company could not collect damages on any years prior to when it filed its lawsuit, even if it does win the case. That appears to limit initial large upfront payments but would not affect payments moving forward. Closing arguments in the case are expected today.
Shares in Riverbed Technology (RVBD) fell by more than 18% in the first trading session since the company announced that it was buying OpNet back on October 29. The acquisition will allow the company to beef up its offerings to better allow corporations to run their networks. The company saw its shares downgraded as analysts speculated that the company saw business slowing in its traditional segments and aggressively pursued this acquisition in order to open up more avenues to growth. Much of that speculation was based on the rich valuation offered and the large proportion of cash in the deal.
We wanted to point out this morning that shares in Clearwire (CLWR) have managed to trade back up to $2.00/share after rising $0.10 (5.26%) in yesterday's trading on strong volume of 14.8 million shares. We expect the rumors that the company could be bought out to continue until either it is or the most logical suitors take their money and shopping list elsewhere because in reality they already control Clearwire via their equity stake. We do not play the takeover target game, as we have pointed out numerous times, but we are thinking that some of Clearwire's suppliers might be good speculations here if one believes that the company is going to secure the necessary cash to complete its network overhaul.
Wow. That is about all there is to say about the report and guidance from Western Union (WU) and the stock's reaction yesterday. Shares finished lower by $5.20 (29.01%) to close at $12.73/share on extremely high volume of 62.7 million shares. The company also announced that it would be closing about 7,000 locations in Mexico and that, coupled with the weaker outlook, prompted numerous analysts to downgrade shares. The company came back from a near death experience during the financial crisis, but it appears that with the current management in place it may very well be headed for another troubling experience if it cannot get respectable returns out of the assets here. It seems that the company's brand is under attack along with the business model as new companies relying on technology launch cheaper platforms and offer more competitive pricing.
Sometimes investing can be quite frustrating, which seems to be the case with Arena Pharmaceuticals (ARNA) as every time it approaches the $10/share level, the rally halts and shares trend lower. After getting back up to that $10/share level recently, we now find shares back down to $7.91/share after falling $0.55 (6.46%) on volume of 13.7 million shares. Most of the weight loss drug companies have fallen, but we expected Arena to outperform the group and to be in an uptrend. It looks like for traders that this is the entry point to play a run up, as has been the trade each time we get down to the $8/share level these past few months.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.