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Market Currents (Wednesday, August 6, 2008)
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  • 6:05 PM AIG (AIG): Q2 EPS of -$0.51 misses by $1.14. Takes $5.56B writedown on CDS portfolio. Shares -7.8%. [PR] Comment!
  • 6:02 PM Dish Network (DISH) CEO Charles Ergen appears to be readying himself for another go at a merger with DirecTV Group (DTV), hopeful that the SIRI/XMSR merger will pave the way for FCC approval. It's not clear, though, that they're comparable. Comment!
  • 5:01 PM Avis Budget Group (CAR): Q2 EPS of $0.15 beats by $0.09. Revenue of $1.58B (+4%) vs. $1.52B. Shares +8.3%. [PR] Comment!
  • 4:44 PM Yamana Gold (AUY): Q2 EPS of $0.15 misses by $0.01. Revenue of $337M (+83%) vs. $349M. Shares +1.1%. [PR] Comment!
  • 4:42 PM Career Education (CECO): Q2 EPS of $0.12 beats by $0.06. Revenue of $419M (-2.2%) vs. $423M. Shares -4.6%. [PR] Comment!
  • 4:40 PM Sunoco (SUN): Q2 EPS of $0.52 beats by $0.22. Revenue of $16.08B (+49.4%) vs. $12.47B. Shares +2.8%. [PR] Comment!
  • 4:25 PM Advance Auto Parts (AAP): Q2 EPS of $0.79 beats by $0.07. Revenue of $1.24B (+5.6%) in-line. [PR] Comment!
  • 4:24 PM VeriSign (VRSN): Q2 EPS of $0.25 beats by $0.02. Revenue of $233M (+21%) vs. $231M. Shares -1.9%. [PR] Comment!
  • 4:15 PM The Andersons (ANDE): Q2 EPS of $2.48 beats by $0.29. Revenue of $1.1B (+73.7%) vs. $0.95B. Shares +0.4%. [PR] Comment!
  • 4:14 PM True Religion Apparel (TRLG): Q2 EPS of $0.39 beats by $0.07. Revenue of $64.2M (+78.8%) vs. $50.2M. Shares +4.5%. [PR] Comment!
  • 3:50 PM Not only has Blackstone (BX) been covering its bets against subprime - it's actively seeking to buy in. "Our bet is that we're near a bottom," president Hamilton James says. Comment!
  • 3:40 PM Did the FDIC pass up on a more lucrative private-equity offer when it lost $862M passing-on two seized banks to Mutual of Omaha? Comment!
  • 3:27 PM "Every bull market in history, and many good intermediate advances, [has] been launched with a buying stampede that included one or more 9-to-1 up days," Martin Zweig once wrote. Despite four Dow 200+ sessions, we haven't breached 82%. Comment!
  • 3:15 PM Earnings previews for companies reporting after today's bell: AAP, ACF, AIG, CAR, CECO, SUN,SVNT, VRSN Comment!
  • 3:10 PM Notable earnings after Wednesday's close: AAP, ACF, AHT, AIG, BEE, CAR, CECO, EAC, FBN, GDP, GGB, NHP, NKTR, RIO, SCI, SINA, SUN, SVNT, TS, URS, UTSI, VRSN Comment!
  • 2:58 PM Indexes have all turned positive over the last hour. Dow +0.5%. S&P +0.43%. Nasdaq +1.36%. Crude -0.6% to $118.46. Gold +0.1% to $879.50. Comment!
  • 2:56 PM Sector ETF weakness: Agriculture– DBA -1.7%. Heating Oil– UHN -1.5%. Retailers– XRT -1.1%. Financials– XLF -0.9%. Comment!
  • 2:56 PM Sector ETF strength going into final hour: Steel– SLX +3.4%. Coal– KOL +3.15%. Basic Materials– IYM +2.9%. Gold Miners– GDX +2.8%. Agribusiness– MOO +2.5%. Solar– KWT +2.4%. Comment!
  • 2:53 PM Comcast (CMCSA) picks up women’s fashion and lifestyle e-mail newsletter Daily Candy for $125M. With 2.5M subscribers, that's $50 a name. Perseverance pays. Comment!
  • 2:45 PM Developers are slashing prices on iPhone (AAPL) apps amid weak demand as expectations for halo-effect sales sputter. Apple keeps 30% of every dollar spent on its download site. Comment!
  • 2:40 PM Regulators are poised to make Citigroup (C) buy back $8B in illiquid auction-rate bonds it improperly sold to clients, and fine it up to $100M. Implications for other firms, including UBS (UBS). This "is just the tip of the iceberg," law professor Jill Fisch says. Comment!
  • 2:22 PM "Wireless and cable assets are great places in which to be invested in uncertain economic times," Scotia Capital says. It likes Canada's Rogers (RCI -2.4%), which is somewhat shielded from a U.S. slowdown - and for another 10 reasons. Comment!
  • 2:11 PM GE (GE) keeps saying it won't sell off NBC after the Olympics. Investors are starting to believe. Comment!
  • 1:52 PM "Will airfares drop with oil prices?" FareCompare.com CEO Rick Seaney asks. "In a word - no." The 'magic number' is still $30-40 away, and even then, he questions whether chronically underperforming airlines will ever agree to revert to their former selves. Comment!
  • 1:35 PM Just 19% of Americans think it's a good time to buy the things they want, ABC's Consumer Confidence survey finds. That's still more than the anemic 10% who say the economy's in good shape. Only 48% are satisfied with their personal finances. Comment!
  • 1:18 PM Cruising through summer on one tank of gas. Comment!
  • 1:13 PM "We haven't had a Y/Y decline in summer gasoline demand in 29 years," Peter Beutel notes, as a 4.1% single-month drop in demand sees wholesales prices plunge below $3. "Consumers don't realize how much power they have over the market." Comment!
  • 12:57 PM Citron Research wonders why American Superconductor (AMSC) asked the SEC for confidentiality on its $450M wind farm order from Chinese Sinovel. A recent acquisition of its closest rival suggest shares ($30) are worth only $10 - or less. Comment!
  • 12:41 PM Boeing (BA) and Northrop (NOC) face off for a $35B Pentagon air tanker contract - Take II. Comment!
  • 12:31 PM Yesterday's recount, which saw Yahoo's (YHOO) board support dive, may not be the last word. Stakeholder Mithras Capital notes further irregularities which, if addressed, could see chairman Roy Bostock and others booted. Comment!
  • 12:13 PM Mario Gabelli's opening a $200M blank-check company to buy a media or telecom company. Lin TV (TVL) ?? Comment!
  • 11:59 AM Carmax (KMX -5.4%) sees same-store sales plunge 17% in June/July, sending shares down as much as 11%. It blames gas prices. Options traders seemed to know something was cooking. Comment!
  • 11:42 AM Hedge fund manager John Paulson, who made $3B on subprime short bets last year, had a rough July - sort of. Bad plays included financial shorts and a bet MSFT/YHOO merger talks would resume, sources say. Comment!
  • 11:25 AM IMF sees U.K. growth of 1.4% this year and 1.1% the next, down from 1.8% and 1.7% in June. ETF: EWU -0.5%. Comment!
  • 11:15 AM Eli Lilly (LLY -0.5%) and Covance (CVD +4.65%) sign a 10-year, $1.6B drug-development deal LLY hopes will help it speed up its R&D as blockbuster patents expire. Comment!
  • 11:02 AM Stocks are weaker after 1 1/2 hours. Dow -0.66%. S&P -0.64%. Nasdaq -0.58%. Comment!
  • 11:01 AM Crude pulls back to flat ($119.20) after a surprise build in crude, but a larger-than-expected gasoline draw. Gasoline ETF UGA +1.5%. Comment!
  • 10:52 AM 63.7% of companies have slashed values of their auction-rate securities; writedowns total $2.1B. Most of the rest haven't filed yet. While increasing writedowns mark a clear trend, the size of the discounts is anything but: they range from near-zero to 98%. Comment!
  • 10:41 AM EIA crude inventories +1.61M vs. consensus of -0.2M. Gasoline -4.34M vs. -1.5M. Distillate +2.84M vs. +2M. Crude futures +0.4% to $119.65. Comment!
  • 10:30 AM "As we head into the next fiscal year, we plan to be aggressively investing in new and adjacent markets," Cisco's (CSCO) John Chambers says. "We would not be investing aggressively if we thought this current slowdown was going to be long in duration." Comment!
  • 10:11 AM Even as subprime losses begin to taper, signs of growing losses on option ARMs, extended to borrowers with good credit, emerge. Defaults on 2006 option ARMs could hit 48% - slightly higher than the subprime default rate. Comment!
  • 10:08 AM "Commodity markets may be doing the Fed's job on its behalf at least as regards bringing down inflation," Kitco's Jon Nadler says. "It's the growth part that has commodity sellers crowding the market exit doors." Comment!
  • 10:00 AM Dow leaders after the first 1/2 hour. AA +3%. CAT +1.1%. MSFT +1%. DD +1%. Laggards: AIG -3.8%. GM -2%. JPM -2%. INTC -1.8%. AXP -1.8%. GE -1.5%. Comment!
  • 9:40 AM After pleading for money he says he won't use, Treasury's Paulson reaches out to Morgan Stanley (MS) to help him understand his Congressional authority to prop up GSEs Fannie (FNM) and Freddie (FRE) - should the need arise. Comment!
  • 9:29 AM Markets set to open slightly below yesterday's close. Dow -0.4%. S&P -0.3%. Nasdaq +0.1%. Comment!
  • 9:27 AM Down 20% since February, Microsoft (MSFT) is considering a buyback of up to $20B. UBS analyst Heather Bellini expects shares to climb 53% in the next year if the buyback is completed. Comment!
  • 9:12 AM Blackstone (BX): Q2 EPS of $0.15 beats by $0.07. Revenue of $354M (-62.9%) vs. $290M. [PR] Comment!
  • 9:06 AM Trading down on yesterday's post-close earnings: WFMI -18%. PCLN -14%. VMC -8%. Comment!
  • 9:04 AM Trading up on yesterday's post-close earnings: MWA +15%. NDRX +9.3%. ONNN +8%. UPL +6%. CSCO +5%. Comment!
  • 8:59 AM Trading down on pre-market earnings: FRE -17%. AKNS -12%. S -7.6%. LAMR -7.5%. HSP -6.9%. HOC -5%. HK -4%. YGE -4.5%. Comment!
  • 8:57 AM Trading up on pre-market earnings: NDAQ +5%. RL +6%. MYL +5%. Q +3%. FWLT +3%. ABK +1.7%. TWX +1.5%. Comment!
  • 8:46 AM 33.7% of Yahoo (YHOO) investors withheld votes for CEO Jerry Yang, vs. a mistaken previous 15.6%. 39.6% for chairman Roy Bostock. The recount doesn't change the outcome, but it paints a very different picture of how shareholders view the board. Comment!
  • 8:38 AM Foster Wheeler (FWLT): Q2 EPS of $0.98 beats by $0.14. Revenue of $1.7B (+43%) in-line. Shares +2.8%. [PR] Comment!
  • 8:30 AM Yingli Green Energy (YGE): Q2 EPS of $0.26 beats by $0.05. Revenue of $290M (+120.5%) vs. $234M. Shares +0.5%. [PR] Comment!
  • 8:26 AM Transocean (RIG): Q2 EPS of $3.45 beats by $0.22. Revenue of $3.10B (+116.3%) vs. $3.05B. [PR] Comment!
  • 8:22 AM Hospira (HSP): Q2 EPS of $0.57 misses by $0.05. Revenue of $902M vs. $926M. Shares -3.2%. [PR] Comment!
  • 8:20 AM Polo Ralph Lauren (RL): FQ1 EPS of $0.93 beats by $0.21. Revenue of $1.11B in-line. Shares +4%. [PR] Comment!
  • 8:13 AM MBA Mortgage Applications +2.8% after reaching a seven-year low last week. The average rate on a 30-yr. fixed mortgage drops to 6.41%, from one-yr. high of 6.58%. Comment!
  • 7:54 AM Sony (SNE) pays $900M to buy out Bertelsmann, its JV partner in Sony BMG. That's just 4.5x 2008 earnings before interest, taxes, depreciation, and amortization [Ebitda], analyst Richard Greenfield notes. Rival Warner Music Group (WMG) trades at 7x. Comment!
  • 7:43 AM Morgan Stanley (MS) rumored to freeze home-equity credit withdrawals for thousands of clients as property values continue to slide. Comment!
  • 7:28 AM Qwest Communications International (Q): Q2 EPS of $0.11 beats by $0.01. Revenue of $3.38B (-2.3%) vs. $3.40B. [PR] Comment!
  • 7:25 AM Nasdaq (NDAQ): Q2 EPS of $0.48 beats by $0.05. Revenue of $380M (+36.6%) vs. $373M. [PR] Comment!
  • 7:23 AM Sprint Nextel (S): Q2 EPS of $0.06 beats by $0.03. Revenue of $9.05B (-10.9%) vs. $9.17B. Loses 776,000 postpaid wireless customers, but churn fell by 45 bps to less than 2%. Plans to sell $3B in shares. -5.2%. [PR] Comment!
  • 7:22 AM U.S. futures. Dow -0.35%. S&P -0.31%. Nasdaq +0.20%. Crude +0.27% to $119.49. Gold +0.79% to $893.30. Comment!
  • 7:19 AM Europe at midday: London +0.04%. Paris +0.55%. Frankfurt -0.15%. Comment!
  • 7:17 AM Asian markets closed higher Wednesday. Nikkei +2.63% to 13,255. Shanghai +1.06% to 2,719. BSE +0.75% to 15,074. Hang Seng closed today due to an approaching cyclone. Comment!
  • 6:38 AM Time Warner Cable (TWC): Q2 EPS of $0.34 beats by $0.02. Revenue of $4.3B (+7.1%) in-line. [PR] Comment!
  • 6:36 AM Time Warner (TWX): Q2 EPS of $0.24 beats by $0.01. Revenue of $11.55B (+5.2%) vs. $11.45B. [PR] Comment!
  • 6:33 AM Freddie Mac (FRE): Q2 EPS of -$1.63 misses by $1.22. Revenue of $1.7B vs. $2.2B. Dividend falls to $0.05 from $0.25. Shares +6.6%. [PR] Comment!
  • 6:25 AM Ambac (ABK): Q2 EPS of -$1.53 misses by $0.34. Revenue of $1.33B vs. $446M (?). Shares -0.84%. [PR] Comment!
  • 5:20 AM Earnings previews for companies reporting early today: ABK, LAMR, MMC, PWR, PXP, RL, S, TWX Comment!
  • 5:02 AM In Europe, markets are higher in morning trade: London +0.4%. Paris +0.9%. Frankfurt +0.3%. Comment!
  • 4:58 AM Asian markets are higher Wednesday: Nikkei +2.6%. Shanghai +1.1%. BSE +2.5%. Hang Seng- closed. Comment!
  • 12:10 AM Notable earnings after Wednesday's close: AAP, ACF, AHT, AIG, BEE, CAR, CECO, EAC, FBN, GDP, GGB, NHP, NKTR, RIO, SCI, SINA, SUN, SVNT, TS, URS, UTSI, VRSN Comment!
  • 12:05 AM Notable earnings before Wednesday's open: ABK, AVT, BCE, BX, CINF, CNP, DF, DSCO, DVN, EP, FCN, FRE, FWLT, GNA, HK, HOC, HSP, KWK, LAMR, MMC, MYL, NDAQ, PCG, PNK, PQ, PWR, Q, RIG, RL, RRD, S, SE, SPIL, TWC, TWX, WTR, XJT, YGE Comment!
  • 12:00 AM Wednesday's economic calendar:
    7:00 MBA Mortgage Applications
    10:35 EIA Oil and Gas Inventories Comment!