MARKET UPDATE
Equities
are taking another breather after yesterday's sell-off, but on a much
smaller scale. In early trading DJIA futures are off about 10 points
while S&P futures are not even down 2 points. Asian equities
markets fell, but none of the majors from Japan, Hong Kong, and
Shanghai were off by even 1%. Europe is trading the worst of all major
markets with the DAX, CAC, and FTSE down over 1% in their late-morning
trading. Traders should be paying close attention to oil after it
neared $82, although NYMEX WTI crude is back closer to $80 this morning
than yesterday's closing prices.
ECONOMIC & MACRO EVENTS
These are today’s top economic data:
8:30 AM EST Weekly Jobless Claims
10:30 Weekly EIA Natural Gas Inventory
Major earnings reports are from MCD MMM MRK DOW MO BG XRX JCG SGP CHKP STI NVS TMO TRV HOT BDK GR
ANALYST UPGRADES & DOWNGRADES
F5 Networks (NASDAQ: FFIV( Raised to Neutral at UBS; Raised to Buy at Canaccord Adams.
Motorola (NYSE: MOT) Raised to Overweight at Thomas Weisel.
Chesapeake Energy (NYSE: CHK) Cut to Neutral at UBS.
EOG Resources (NYSE: EOG) Cut to Neutral at UBS.
BULLISH EVENTS
Travelers (TRV) beat earnings and raised its dividend 10% to $0.33 per
quarter and approved a $6 billion buyback in additional shares on top
of its prior buybacks. The financial giant posted non GAAP earnings of
$1.61 EPS and $1.65 headline EPS on revenues of $6.327 billion versus
estimates of $1.31 EPS and $6 billion in revenues. Travelers is also
hiking guidance for 2009 to $5.30 to $5.50 EPS vs. a prior range of
$4.80 to $5.05. Net income here was $935 million vs. $214 million a
year ago.
Microsoft (MSFT) is out with its big dog and pony show today. The
software giant is releasing Windows 7 today in what many are hoping
will be a fresh operating start for the company. Windows 7 is supposed
to make up for the disaster that Windows Vista was.
Merck (MRK) posted $0.90 EPS vs. $0.82 estimates and sales were $6.05
billion (up from $5.944 billion a year ago) versus estimates of $6.0
billion. Merck now sees 2009 earnings in a range of $3.69 to $3.89,
but non-GAAP range is $3.20 to $3.30. Estimates for 2009 are $3.23
EPS.
AT&T Inc. (NYSE: T) beat its expectations. Earnings were $0.54 EPS
vs. $0.55 EPS a year ago and estimates were $0.50 EPS. Revenues are
down about 2% from a year ago to $30.86 billion vs. $30.86 billion
estimates. Wireless subscriber additions were 2 million to 81.6
million, including some 3.2 million iPhone activations. It added
240,000 uVerse customers.
3M Co. (NYSE: MMM) posted earnings a 4.3% decline to $1.35 EPS on a
5.5% drop in revenues of $6.2 billion versus estimates of $1.17 EPS and
$5.77 billion in revenues. 3M is also raising guidance to $4.50 to
$4.55 EPS for 2009, up from a prior range of $4.10 to $4.30 EPS. Shares
are indicated up about 1%.
BEARISH EVENTS
Potash Corp. of Saskatchewan (POT) posted Q3 earnings of $0.82 EPS vs.
$0.81 estimates; on a 64% revenue drop to $1.1 billion. The fertilizer
and potash giant is lowering guidance: Q4 EPS of $0.65 to $0.85 EPS vs.
$1.18 EPS estimates. The company noted that the uncertainty among
fertilizer buyers has lasted far longer than the company anticipated.
It did note that these conditions cannot go indefinitely, but shares
are lower as a result of guidance.
eBay (EBAY) did beat earnings last night, although not by enough. And
guidance was only in-line. As shares had recovered a sharp 150%+, we
saw an immediate round of selling. We saw it down as much as 8% last
night, but eBay is down about 4.5% in early indications.
Bunge (BG) posted Q3 earnings of $1.62 EPS vs. $1.47 estimates as
revenue fell 23% to $11.3 billion vs. $12 billion estimates. The soy
bean giant sees full-year EPS of $3.10 to $3.50, well under the
estimates of $.69 EPS. The company noted that its business continues to
be pressured by higher costs in its inventories and that the business
has a weak pricing environment.
Xerox (XRX) posted Q3 earnings of $0.14 EPS vs. $0.12 estimates on a
15% drop in revenue of $3.67 Billion versus, in-line with revenue
estimates. The copy and imaging giant now sees full-year earnings in a
range of $0.55 to $0.57 EPS vs. consensus of $0.53 EPS.
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