MARKET UPDATE
Equities are taking another breather after yesterday's selloff as traders are starting to sell into earnings that are beating because of cost cuts rather than because of a return of a normal spending environment. DJIA futures are down about 50 points and S&P futures are trading lower by about 5 points. Asia hardly budged with Japan down a whole 0.03% and Hong Kong down only -0.3%. Europe is trading the worst with a drop of right around 1% on all major markets.
ECONOMIC & MACRO EVENTS
These are today’s top economic data:
9:00 AM EST Fed's Lacker speaks in Washington
9:00 AM EST Fed's Cumming speaks on navigating the credit crisis
10:30 AM EST EIA Weekly Petroleum Inventories
1:00 PM EST Fed's Tarullo speaks on confronting the notion of too big to fail
2:00 PM EST Fed's Beige Book 4:30 PM Fed's Rosengren: After the Fall
Earnings Today: Major earnings in the morning are BA, CAL, KEY, LLY, MS, WFC; major earnings after the close are ADS, AMGN, CTXS, EBAY, FFIV, KNX, LOGI, LRCX, NE, NVLS, OSIP, QLGC, RRC, SKX, TEX, and VMW.
ANALYST UPGRADES & DOWNGRADES
Autodesk (ADSK) Raised to Buy at Kaufman Bros.
Lexmark (LXK) Raised to Neutral at JPMOrgan.
El Paso Corp. (EP) Cut to Hold at Citigroup.
NRG Energy (NRG) Cut to Hold at Jefferies.
BULLISH EVENTS
Yahoo! (YHOO) is trading up between 4% and 5% after the #2 internet search provider reported solid earnings. Be advised that despite calling that the business has stabilized, there is still no major return to growth witnessed.
Tupperware (TUP) posted Q3 EPS of $0.54 EPS vs. $0.42 estimates on flat revenue of $514 million vs. $486 million estimates. The container-maker also raised its full-year guidance to $2.84 to $2.89 from a prior range of $2.59 to $2.64, and versus estimates of $2.73.
Altria (MO) is showing that smoking is far from dead. The company posted $0.48 EPS vs. $0.46 estimates. The company said that Marlboro delivered year-over-year and sequential retail share growth in the third quarter of 2009. It also narrowed its full year adjusted earnings guidance: $1.74 to $1.77 EPS versus a prior forecast of $1.72 to $1.77 EPS.
SanDisk (SNDK) soared last night after blowing through earnings. The flash memory leader posted $0.75 EPS vs. $0.26 estimates and revenues were close to $200 million more than expected. Shares traded over $240.00 last night, yet shares are up 8% frm yesterday's close around $23.45 this morning.
Changyou.com (CYOU) is indicated higher after a boutique upgrade. The fairly recent IPO was raised to Buy at Roth Capital based on valuation and a strong prospect for growth.
BEARISH EVENTS
Microsoft (MSFT) could be lower after Dell said that it does not expect a large bump up from Windows 7 until mid-2010. That would mean a six-month lag before big sales come into play for Microsoft and its new software release due in a couple weeks.
Elan (ELN) reported earnings that actually beat estimates, but the company is still losing money. The Irish drug delivery company posted -$0.06 EPS, better than the -$0.13 estimates. To illustrate how bad it has been of late, revenues were down over 19% to $399M from estimates of $382M.
Continental (CAL) beat earnings, but the airline still posted a loss for the quarter on a net earnings basis. Its Q3 earnings report came in at $0.02 EPS vs. -$0.06 estimates. Revenue also fell 20% to $3.32 billion, in-line with estimates. The net loss after items was $18 million. The news is not awful, but outlines that troubles are not entirely behind it.
Boeing Co. (BA) is deep in the soup still with Dreamliner delays if its earnings are any barometer. The aerospace and defense company posted earnings at -$2.23 EPS vs -$2.12 estimates and revenues were light at $16.7 billion vs. $17.16 billion estimates.
ZST Digital Networks, Inc. (NASDAQ: ZSTN) was a low-float IPO which priced at $8.00 yesterday and already went down to a busted deal status after closing at $7.52 yesterday. Shares have not yet traded but that will go down as just another bad IPO to traders now that so many IPO deals are falling under their IPO prices.
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