MARKET UPDATE
Equities are indicated higher this morning as the market is trying for its third day of a rally. Too bad it was just when you got used to selling and were trying to get into holiday mode for Thanksgiving week. DJIA futures are up about 70 points and S&P futures are up about 10 points. As stocks are gapping up, bonds may again see a “flight away from safety” and therefore higher yields if investors start tip-toeing back more and more into equities. To put this in perspective, we have now had roughly a 1,000 point move upwards in the DJIA since the lows of last Thursday.
ECONOMIC & MACRO EVENTS
These are today’s top economic data:
8:30 AM EST preliminary revision to GDP (Q3-2008)
At 10:00 AM EST today we’ll get another speech about an update on the use of TARP funds from Treasury Secretary Hank Paulson.
Earnings today will come from American Eagle Outfitters (AEO), but be advised that earnings and much planned corporate news for the rest of the week will start to dry up as Thanksgiving gets nearer and nearer.
BULLISH EVENTS
Hewlett-Packard (HPQ)may trade up or down this morning, but the company did live up to its guidance of last week. The company maintained the same outlook ahead, although in this report it was more cautious on the consumer hardware and consumer spending side.
Interdigital (IDCC) traded up over 10% as the company is reportedly near a settlement with Samsung. It has been in a suit against Samsung over wireless roaming patents that the company has said Samsung has been violating without payments.
Lennar Corp. (LEN) is indicated higher on an analyst upgrade. The home builder was Raised to “buy“ at UBS. This may get some interest this morning as analyst upgrades in this sector have been few and far between.
Chico’s FAS (CHS) is indicated slightly higher after the troubled women’s fashion retailer actually beat earnings. The company posted a small positive at $0.01 EPS, while estimates were for -$0.02 EPS. Of course it is cautious for the coming quarters in the climate, but this one has been sold off so much that any news may be good news.
Warner Music Group (WMG) may trade higher today, which is unique considering that this is a record label and considering it has had almost no good news in years. The company actually made a profit of $0.04 EPS vs. -$0.02 estimates. While it said this year’s results would be back-end weighted, it did say that revenues were also ahead of plan.
BEARISH EVENTS
China Finance Online Co. Limited (JRJC) is not indicated as low as it was last night, but the Chinese financial online portal gave earnings last night. Its bottom line was better than expected, but it looks like revenues were lighter than two estimates out there.
Actuate Corporation (ACTU) announced last night that it was lowering its self tender for a maximum of $60 million worth of its stock. Due to market conditions it took the tender range down to $2.20 to $2.60 from a range of $3.15 to $3.60. Shares closed at $2.87 yesterday, so this is now under-market.
Apollo Investment Corporation (AINV) is trading down over 10% in early indications after selling off on active trading volume last night. The company has named a new CEO and its old CEO will continue as Chairman.
Google (GOOG) is cutting many contract worker positions, but said it is not laying off full-time workers. Advertisers are claiming that they are not getting the search-ad results they want or need via the web and that includes Google. That is part of why this stock was lower yesterday despite it being a major up-market trading day.
Starbucks traded lower and is still indicated lower by about 3%. Yesterday after the close the company filed its annual report with the SEC and it contained a notice inside that the Flat to +1% base case in same store sales into 2009 is now going to be negative. Arguably this may not be a surprise in the recession, but the market cast its vote by trading it down.
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