Periodicals Wrap-Up for Wednesday, June 4th
WALL STREET JOURNAL: In a move to help cut expenses and save on fuel prices, UAL Corp. (UAUA), parent of United Airlines, will reduce its 460 airplane fleet by 70 jets. Not yet known is how may jobs will be affected, the Wall Street Journal reported…In an all stock deal, J.M. Smucker Co. (SJM) is expected to buy Folgers coffee from Proctor & Gamble (PG) for an estimated $2B, according to the Wall Street Journal. Folgers, the best selling ground coffee in the U.S., has annual sales of about $1.6B…FINANCIAL TIMES: The Financial Times reported that Lehman Brothers (LEH) lost $500M-$700M on some of its hedging positions in Q2, which have contributed to a larger than expected loss that could result in the bank raising more capital by selling a stake to an outside investor. Lehman has begun negotiations with potential investors, including asset managers and Asian banks, sources said…ROCKY MOUNTAIN NEWS: According to sources, the Rocky Mountain News reported that troubled home builder Beazer Homes (BZH) is pulling out of Colorado. Beazer, which is being investigated for mortgage fraud by several government agencies, has built homes in the suburbs of Denver and in Colorado Springs…
Lehman lost hundreds of millions on hedging positions-FT
Lehman Brothers (LEH) lost $500M-$700M on some of its hedging positions in Q2. Those hedging positions have contributed to a larger than expected loss that could result in the bank raising more capital by selling a stake to an outside investor. Lehman has begun negotiations with potential investors, including asset managers and Asian banks, sources say.
Softbank forms deal with Apple for iPhones-AP
According to a spokesperson for Softbank, the Japanese mobile carrier has formed a deal with Apple (AAPL) to sell its iPhone device. A spokesperson for rival carrier NTT DoCoMo (DCM) said the company was disappointed Apple had chosen Softbank, as the company was also considering a deal for Apple’s first iPhone venture into Japan. Apple is said to be planning to further expand through a partnership with Mexico City’s Movil, which has subscribers in countries such as Brazil, Colombia and Mexico.
Baidu.com criticized over music piracy; Advertisers asked to reconsider-WSJ
Three music industry associations have called Chinese Internet search provider Baidu.com “”the largest and most incorrigible purveyor of pirated music in China.” Chinese and foreign record companies want advertisers on Baidu.com to reconsider advertising with them. The statement was signed by the International Federation of the Phonographic Industry, the Music Copyright Society of China, and the China Audio-Video Copyright Association. They say record companies including Universal Music Group, EMI Group PLC, Sony BMG Entertainment and Warner Music Group Corp. (WMG), have signed the statement.
YouTube’s Shashi Seth leaves company-CNet
Google (GOOG) has confirmed that YouTube’s monetization chief, Shashi Seth, has left the company. Om Malik reported earlier that Seth departed to take the position of chief revenue officer of Cooliris. Google CEO Eric Schmidt has said that YouTube monetization is “job number one at Google”.
U.S. equity futures are still pointing to a lower open but the futures are off of their earlier lows. The ADP Employment change reports showed that the economy gained 40,000 jobs in May while analysts had been projecting a loss of 30,000. In real estate news, the MBA Mortgage Applications report for the week of May 30 saw a drop of -15.3% from the previous week.
XNPT initiated with a Buy, target $60@GSCO
Goldman initiated XNPT with a Buy citing potential blockbuster potential for XP13512.
HP initiated with a Buy, target $73@GSCO
Goldman said it expects a significant increase in drilling activity in the next 6 to 18 months and notes the company’s competitive advantage and fleet quality.
COST target raised to $92 from $88, maintain Buy@THNK
ThinkPanmure raised their target to reflect the company’s improving EBIT margin and turnover.
Intercontinental Exchange-ICE target lowered to $165 from $175@DBAB
Deutsche Bank believes the Creditex acquisition could dilute results in the near-term, but they see strategic benefits in the long run. Shares remain Buy rated.
XTO: Lower natural gas prices could negatively affect company@STFG
After U.S. natural gas imports rose to 32B in April from 22B in each of the previous two months, Stanford believes reduced prices could have a negative affect on XTO. However, the firm maintained their Buy rating, as they believe the company would exploit temporary weakness to make advantageous acquisitions.
ESV initiated with a Buy, target $107.50@JSLC
Jesup & Lamont initiated ESV with a Buy citing international demand for drilling services.
PXD target raised to $100 from $69, maintain Buy@SBSH
Citigroup raised their target to reflect increased confidence in the company’s Spraberry well and believes the market will fully credit PXD for the NAV of its proved reserves ($100/share) over the coming year.
CHINA: The CSI 300 retreated 67.20, or 1.9%, to 3,546.92. Stocks slid to a six week low on word that the government’s attempt to control prices will hurt the earnings of steel and coal producers. China Shenhua slumped 4.7% to 45.68 yuan. Yanzhou Coal Mining Co. (YZC) sank 3.3% to 23.53 yuan. China Coal Energy Co. lost 4.9% to 19.17 yuan. Zijin Mining fell 3.3% to 9.13 yuan. Yunnan Copper was down 1.9% to 22.31 yuan…
American Express-AXP sees FY08 EPS $3.51-$3.61 vs. consensus of $3.32…let’s see how MA, V act on this news.
NBR upgraded to Buy from Neutral@GSCO
Target $48.
MS upgraded to Outperform from Market Perform@WCHV
Wachovia upgraded MS as they expect the retail brokerage unit to be valued higher due to its recurring revenue streams, shrinking competition in prime brokerage, deleveraging and continued strength in commodities.
VIP reports Q1 EPS 59c vs. consensus of 59c
Reports Q1 revenue $2.1B vs. consensus $2.08B.
CNQ coverage resumed with a Buy@MLCO TLM coverage resumed with a Buy@MLCO
Mosaic-MOS announces FY09 financial guidance
“We anticipate reporting robust fourth quarter results in fiscal 2008 as strong demand and the tight supply situation continues for crop nutrients,” stated Jim Prokopanko, President and Chief Executive Officer of Mosaic. “Given the world’s burgeoning demand for grains and oilseeds, our fiscal 2009 financial guidance reflects strong financial performance momentum and underscores Mosaic’s commitment to investing in the crop nutrition industry and helping farmers produce crops with greater yields,” Prokopanko added.
Bank of America-BAC: Estimates lowered & target lowered to $28 from $29@MLCO
Merrill lowered BAC estimates citing higher credit loss expectations. Shares are Underperform rated.
Fast Money position recap- First Moves- Jeff says short the Dow buying buying DOG, Guy likes CELG, Karen likes AET, Pete likes NSC. Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (INTC), (MSFT), (WMT); Najarian Owns (HK), (AAPL), (BHI), (HD), (TSO), (XLF), (XTO); Najarian Owns (LEH) Puts; Finerman Owns (GS); Finerman’s Firm And Finerman Own (HD); Finerman’s Firm Owns SPX Index Puts; Finerman’s Firm And Finerman Own (C) And (C) Leaps; Finerman’s Firm Owns (AET), (AAPL), (MO), (MSFT), (SUN), (TSO), (VLO)’ Finerman’s Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM).
Watching MA and V on the AXP raised guidance, not sure if they can muster a strong move against the market tide. Watch the financials and brokers again after the LEH news this morning. Back to the so goes the brokers so goes the market again, as shown yesterday. There are alot of great stochastic buys off of support like the drillers such as RIG but I would like to see some market stabilization first. Focus on your goals and stay positive, pick plays with a high probability of success. May the force be with you! Great Luck and Great Trading.
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Great Luck and Great Trading.
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