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Market Currents (Monday, August 4, 2008)
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  • 6:16 PM Neil Hennessey's 3 top picks: Oil States International (OIS), W.R. Grace (GRA) and SPX (SPW). His Focus 30 fund is up 7.9% YTD. Comment!
  • 6:08 PM "Here I can say what I want about Citigroup, when I want, and as long as I’m honest, they don’t care." - analyst Richard Bove, on working for Ladenburg Thalmann Comment!
  • 4:37 PM Gasco Energy (GSX): Q2 EPS of $0.03 in-line. Revenue of $12.6M (+147.1%) vs. $11.8M. [PR] Comment!
  • 4:24 PM Comstock Resources (CRK): Q2 EPS of $1.50 vs. consensus of $1.24. Revenue of $172M (+107%) vs. $227.5M. Shares -7%. [PR] Comment!
  • 4:23 PM Rackable Systems (RACK): Q2 EPS of -$0.12 misses by $0.11. Revenue of $76M (-7.6%) in-line. Shares -12%. [PR] Comment!
  • 4:21 PM Pitney Bowes (PBI): Q2 EPS of $0.69 beats by $0.02. Revenue of $1.59B (+2.9%) in-line. [PR] Comment!
  • 4:13 PM Syniverse (SVR): Q2 EPS of $0.42 beats by $0.05. Revenue of $128M (+39.6%) vs. $117M. Shares +2.5%. [PR] Comment!
  • 4:08 PM DaVita (DVA): Q2 EPS of $0.90 beats by $0.07. Revenue of $1.41B (+7.2%) vs. $1.37B. [PR] Comment!
  • 4:03 PM Principal Financial Group (PFG): Q2 EPS of $0.97 beats by $0.02. Revenue of $2.79B (+0.1%) in-line. [PR] Comment!
  • 4:02 PM Crude -3% to $121.35. Gold -1.58% to $903. Comment!
  • 4:01 PM Stocks tried to rally as commodities sold off, but couldn't follow through. Dow -0.39% to 11,282. S&P -0.86% to 1,250. Nasdaq -1.1% to 2,286. Comment!
  • 3:48 PM Regulators have an embarrassing tendency to crack down on a problem when most damage - real or imagined - has already been done. Naked short restrictions = contrarian indicator? Comment!
  • 3:35 PM Remember SocGen (SCGLY.PK)? Jerome Kerviel's assistant is now under formal investigation. Kerviel's lawyer says investigators should be looking up the ladder, not down. Comment!
  • 3:25 PM Mortgage defaults: Will wave-two (Alt-A) dwarf wave-one (subprime)? "Subprime was the tip of the iceberg. Prime will be far bigger in its impact." Comment!
  • 3:15 PM Earnings previews for companies reporting after today's close: PFG, UDR Comment!
  • 3:10 PM Notable earnings after Monday's close: APC, CRK, DVA, GSX, HCP, HL, HMA, PBI, PFG, SM, SVR, UDR Comment!
  • 3:02 PM The Dow is well into the green entering the final hour. +0.39%. S&P -0.09%. Nasdaq -0.42%. Crude -3.08% to $121.25. Gold -1.27% to $897.50. Comment!
  • 2:55 PM In an effort to save on R&D, GM (GM) and Ford (F) are in talks about collaborating on developing new engines, sources say. A deal could give Ford access to GM's Volt technology. Comment!
  • 2:43 PM Credit crisis turns one. Happy birthday? Comment!
  • 2:43 PM Interest rates for week ending Aug. 1: Fed funds 2.08% vs. 1.99% July 25. 3-month T-bills 1.67% vs. 1.57%. 3-month commercial paper 2.02% vs. 2.11%. Comment!
  • 2:31 PM Wachovia's (WB) down 7% after Morgan Keegan analyst Robert Patten says last week's 31% climb was mostly illusory - and likely the result of short covering. Comment!
  • 2:25 PM Dow leaders: PFE +2.15%. WMT +1.7%. PG +1.7%. JNJ +1.5%. C +1.3%. Laggards: XOM -2.7%. AA -2.5%. DD -2%. CVX -1.1%. Comment!
  • 2:15 PM "Again I’m early, and I’m fighting against the trends. But the fact is that banks are too cheap." - analyst Dick Bove, who predicted the housing market and subsequent bank crash in 2005 Comment!
  • 2:02 PM Major indexes remain down, but manage to erase some of earlier losses. Dow -0.12% S&P -0.57%. Nasdaq -0.84%. Crude -3% to $121.35. Gold -1.4% to $889.20. Comment!
  • 2:02 PM 26 Russell 3000 stocks are up 100%+ this year. Seven months into 2008, here are the best and the worst. Comment!
  • 1:49 PM Auto stocks decimated by oil shock - so what's new? Comment!
  • 1:37 PM Obama's about face: He now proposes tapping into the Strategic Petroleum Reserve's 710M barrels of light crude, and replace them with heavier crude. Past reserve taps have lowered prices within two weeks, he says. Comment!
  • 1:29 PM CRB commodity index (-3.3%) poised for its biggest daily drop in four months. Natural gas (UNG -7.3%) leads the way. Comment!
  • 1:27 PM Sotheby's (BID) is defying predictions for a downturn in the art market: "the market is still healthy for great, dead artists." Comment!
  • 1:14 PM Airlines' next worry: Hedging losses? Comment!
  • 1:01 PM Delinquent U.S. commercial real estate loans rise a mild 0.01% in June to 0.45%. The 21 bps jump from July 2007 is notable, but bear in mind that the 10-year average is 0.61%. Comment!
  • 12:40 PM 369 ETFs have assets of less than $50M - meaning nearly half of all ETFs are "too small to survive. The question is not whether, but when, most of them will fail." Comment!
  • 12:25 PM Will ballooning shipping costs lead to significant rebalancing of global production? Comment!
  • 12:11 PM Once-obscure ex-Fed chief Alan Greenspan is, as a paid pundit, crystal clear in his pessimism. In its account of this mess, will history devote him a chapter in the book of blame? Comment!
  • 11:55 AM More gloom from Meredith Whitney: Bank layoffs (now 7%) need to reach 25% of their workforces. Still unrealistic valuations of their mortgage debt makes bank book values moving targets. Comment!
  • 11:43 AM Dow spikes into positive territory on oil breakdown. +0.05%. S&P -0.54%. Nasdaq -0.52%. Comment!
  • 11:41 AM Oil falls off a cliff. -4% to $120. Comment!
  • 11:35 AM Home prices are going to fall much more than people expect, Oppenheimer's Meredith Whitney says. She sees prices down about 40% - as tight-walleted banks remain reluctant to lend. Comment!
  • 11:31 AM Recessions don't usually look like this - at least when it comes to productivity. In the six previous U.S. recessions, worker output per hour gained just 0.8%/year. Presently, it's growing at about 2.5%. Comment!
  • 11:22 AM Yahoo (YHOO) dips to six-month low of $19.21. Comment!
  • 10:56 AM Schering-Plough (SGP +0.4%) sends shares of rival Vertex (VRTX -11.6%) tumbling after a positive interim report for its new hepatitis drug. Comment!
  • 10:44 AM Factory order strength, up 5% from a year ago, may be one of the great untold stories of the downturn. In the 2001 recession orders plunged 10% - though then they weren't buoyed by a weak dollar. Comment!
  • 10:31 AM Sector ETF weakness: Coal– KOL -3.9%. Natural Gas– UNG -3.7%. Regional Banks– RKH -3.4%. Commercial Banks– KBE -2.9%. Broker/Dealers– IAI -2.6%. Steel– SLX -2.7%. Comment!
  • 10:30 AM Sector ETF strength after the first hour: Livestock– COW +0.9%. Healthcare Providers– IHF +0.7% Semis– IGW +0.5%. Utilities– XLU +0.5%. Comment!
  • 10:24 AM Dow leaders: PG +0.8%. MCD +0.7%. Laggards: BAC -4.1%. C -3.9%. JPM -3.5%. AIG -2.9%. Comment!
  • 10:19 AM Homebuilder weakness on WCI (WCI -98%) Ch. 11 filing: HOV -5.3%. PHM -3.3%. DHI -1.5%. KBH -2%. ETF: XHB -2.1%. Comment!
  • 10:16 AM Nouriel Roubini on CNBC: "If it walks and talks like a duck - it's a recession, duck." Comment!
  • 10:11 AM WCI Communities (WCI) files for Chapter 11. It's unable to get financing, and may soon default on its $1.8B in debt. Shares -47.6% to $0.66. Comment!
  • 10:08 AM July factory orders +1.7% vs. +0.7% consensus. At almost $458B, orders are at their highest levels since at least 1992. Shipments also set new records. Comment!
  • 10:01 AM First half-hour brings more weakness. Dow -0.5%. S&P -0.6%. Nasdaq -0.7%. Crude -0.74% to $124.18. Gold -0.3% to $906.30. Comment!
  • 9:57 AM ImClone (IMCL -0.9%) is uninspired by Bristol-Myers' (BMY +1%) $4.5B ($60/share) bid. It is considering splitting into two (Erbitux and pipeline), which would increase shareholder value - and says big stakeholders including Icahn agree the bid's too low. Comment!
  • 9:49 AM SIA global chip sales up 8% Y/Y in June. First-half sales +5.4% to $121B. Strong sales were driven by PCs (40%) and cell-phones (20%). SIA is seeing healthy U.S. demand and strength in emerging markets. Comment!
  • 9:43 AM "Our ability to attract a leader of Sanjay's caliber is a testament to the strong potential of the Mobile Devices business." - Motorola (MOT +8.5%) co-CEO Greg Brown. Comment!
  • 9:36 AM Motorola (MOT +10%) takes on Qualcomm (QCOM -2%) COO Sanjay Jha as co-CEO. He'll head up MOT's mobile-devices unit, which is expected to be spunoff later this year. Comment!
  • 9:35 AM Futures remain slightly down into the open. Dow -0.11%. S&P -0.26%. Nasdaq -0.89%. Crude -0.96% to $123.90. Gold -0.72% to $910.80. Comment!
  • 9:23 AM MDU Resources Group (MDU): Q2 EPS of $0.63 beats by $0.07. Revenue of $1.05B (+25.5%) vs. $1.12B. Shares +2.7%. [PR] Comment!
  • 9:22 AM Challenger: July layoff announcements up 141% from a year ago to 103K. Hardest-hit were transportation (17K), financial (16K), and retail (12K). Comment!
  • 9:15 AM Six Flags (SIX): Q2 EPS of $0.72 beats by $0.91. Revenue of $346M (+0.6%) vs. $341M. Shares +27%. [PR] Comment!
  • 9:11 AM DRAM market showing renewed weakness, iSuppli warns, after a short-lived Q2 quasi-recovery. Expect Q3 pricing to fall due to bloated inventories. (MU, IFX, QI) Comment!
  • 8:57 AM Global IPOs in July plunge to five-year lows. 47 IPOs raised $5.6B; compare that with 190 and $31.7B a year ago. August looks no better. Comment!
  • 8:49 AM The PCE price index inflation measure jumped 0.8% in June - the biggest increase since Sept. 2005. Core PCE prices +0.3% vs. +0.2% consensus. Comment!
  • 8:40 AM Personal income +$6.8B (+0.1%) vs. -0.2% consensus. Personal consumption +$57.1B (+0.6%) vs. +0.5% consensus. Comment!
  • 8:33 AM SimpleTech (STEC): Q2 EPS of $0.09 beats by $0.01. Revenue of $56.2M (+28.6%) vs. $53.2M. Shares +10%. [PR] Comment!
  • 8:23 AM Hedge funds are poised to post their worst monthly performance in six years. Some high-profile funds may suffer a double-digit drop. Comment!
  • 8:13 AM KKR's recent decision to go public may be the prelude to acquiring a hedge fund or financial company - perhaps Lehman (LEH), sources say. Comment!
  • 8:04 AM GE (GE) has no plans to put NBC Universal on the selling block - even after the Olympics - chief marketing officer Beth Comstock says. She says GE is on track to double its China revenue to $10B/year by 2010. Comment!
  • 7:58 AM The number of brokers dealing in U.S. Treasury bonds drops to 19 - the fewest since 1960. Fewer firms means sloppier auctions: "The taxpayer and the government are paying more no matter what happens." Comment!
  • 7:47 AM Freddie Mac (FRE) and Fannie Mae (FNM) will try to forestall foreclosures by doubling the fees they pay to restructure mortgage terms. In many case, the measures may simply delay the inevitable. Comment!
  • 7:41 AM IntercontinentalExchange (ICE): Q2 EPS of $1.19 in-line. Revenue of $197M (+44.3%) vs. $196M. [PR] Comment!
  • 7:38 AM SBA Communications (SBAC): Q2 EPS of -$0.17 misses by $0.07. Revenue of $112M (+11.7%) vs. $113M. [PR] Comment!
  • 7:28 AM Cooper Tire & Rubber Company (CTB): Q2 EPS of -$0.38 misses by $0.11. Revenue of $773M (+5.9%) vs. $725M. [PR] Comment!
  • 7:24 AM U.S. futures. Dow -0.16%. S&P -0.16%. Nasdaq -0.34%. Crude -0.13% to $124.94. Gold -0.29% to $914.80. Comment!
  • 7:12 AM Europe at midday: London -0.1%. Paris -0.1%. Frankfurt -0.9%. Comment!
  • 7:06 AM Asia Monday: Nikkei -1.23% to 12,933. Hang Seng -1.52% to 22,515. BSE -0.54% to 14,578. Comment!
  • 6:26 AM Sources say investor redemptions are forcing Citigroup (C) to reel-in a $400M convertible arbitrage fund - the last step in winding down its $2B Tribeca Global Investments group. Comment!
  • 6:23 AM Humana (HUM): Q2 EPS of $1.24 beats by $0.06. Revenue of $7.35B (+14.4%) vs. $7.14B. [PR] Comment!
  • 6:17 AM DISH Network (DISH): Q2 EPS of $0.73 beats by $0.13. Revenue of $2.9B (+5.4%) in-line. [PR] Comment!
  • 6:00 AM Earnings previews for companies reporting early Monday morning: HUM, ICE Comment!
  • 5:59 AM TNK-BP (BP) CFO James Owen resigns. Says ongoing stakeholder conflict makes it too difficult to serve his duty. Comment!
  • 5:50 AM HSBC (HBC): H1 net profit of $7.72B, in-line, vs. $10.9B a year ago. Loan impairment charges $10.01B vs. $6.35B last year. "The outlook for the near term remains highly challenging with significant uncertainty." Shares -1.8% in London. [WSJ] Comment!
  • 12:10 AM Notable earnings after Monday's close: APC, CRK, DVA, GSX, HCP, HL, HMA, PBI, PFG, SM, SVR, UDR Comment!
  • 12:05 AM Notable earnings before Monday's open: CTB, DISH, HUM, ICE, MDU, SBAC, SIX, STEC Comment!
  • 12:00 AM Monday's economic calendar.
    7:30 Challenger Job-Cut Report
    8:30 Personal Consumption
    10:00 Factory Orders (consensus +0.7% M/M) Comment!