MOST NOTEWORTHY: Motorola, Williams-Sonoma and Synchronoss were today's noteworthy downgrades:
Thomas Weisel downgraded Motorola Inc (NYSE: MOT) to Market Weight from Overweight based on the general uncertainty in the company's core markets and the likelihood that the spin off may not occur for several quarters.
Piper believes Williams-Sonoma Inc (NYSE: WSM) faces a challenging environment, and their checks reveal weakness at Pottery Barn. Shares were cut to Neutral from Buy.
ThinkPanmure downgraded Synchronoss Technologies Inc (NASDAQ: SNCR) to Accumulate from Buy. The firm expects a strong Q1 report but expects shares to sell-off following the Q1 conference call due to modest guidance and the lack of a major customer win announcement.
Goldman Sachs affirmed its "neutral" rating on Sysco (NYSE: SYY), saying "shares have been trading lower on concerns related to whether softening consumer spending is affecting casual dining and upper-end restaurants," according to the AP.
Thomas Weisel downgraded Motorola (NYSE:MOT) to "market weight" from "overweight" according toBriefing.com. The news service also reports that Morgan Stanley intiated Visa (NYSE:V) with a rating of "equal weight".
Credit Suisse (NYSE:CS) was raised to "peer perform" at Bear Stearns according to a report at 24/7 Wall St. The financial website also writes that Goodyear Tire & Rubber (NYSE:GT) was cut to "neutral " at JP Morgan.
During its first quarter last year, the company posted a $174 million dollar loss, or -94 cents a share, and going into today's earnings report Wall Street had been looking to see the company show Q1 earnings of 47 cents. So with the actual numbers, Goodyear is looking for a good day in today's action. Excluding one-time items, the company stated that it had earned 67 cents per share.
Currently the stock has moved up 4.5% in premarket trading following its earnings release.
PC World quoted on Thursday analysts claiming Apple Inc. (NASDAQ: AAPL)'s 3G iPhone will be announced June 9, the likely date of Apple CEO Steve Jobs' keynote at the company's Worldwide Developers Conference scheduled for June 9-13 in San Francisco. Other products announced then may include an updated Mac laptop and new iPod lines. The price of the 2.5G iPhone could then drop. Apple needs the 3G phone to help it reach the 10 million phone target for 2008 it has set.
According to Goodyear Tire & Rubber Co. (NYSE: GT), it has swung to a profit on higher revenue in the first quarter, reversing last year's loss by focusing on higher-priced tires and international markets. The company reported earnings of 67 cents per shares excluding items, handily beating estimates of 47 cents per share. GT shares are up 2.75% in premarket trading.
There are some boring businesses out there, and for me, selling tires is one of them. But Goodyear Tire & Rubber (NYSE: GT) is having an exciting day today while the major indexes wallow in another bearish posture, at least at the time of this writing.
For the fourth quarter, Goodyear increased its top line by 11% to $5.2 billion (in the previous year's quarter, a three-month strike affected sales to the tune of over $300 million). Net income from continuing operations came in at $0.27 per diluted share, a vast improvement over the $1.74 per-share loss observed in the year-ago period. For the full year, net sales increased 5% to $19.6 billion; net income from continuing operations was $0.65 per diluted share, against a loss in 2006 of $2.11 per diluted share.
Things seem to be going well for Goodyear. The company's cost-savings initiatives are on track, gross margin for the quarter was up, long-term debt and capital leases are down, and cash/equivalents stand at $3.5 billion. The stock is up 5.5% as I write this -- so, what's not to love?
I certainly don't want to rain on a parade here, but Goodyear just isn't my kind of company since it doesn't have a dividend yield at the moment. There are better old-economy ideas out there for me, ones that pay a dividend and seem like better bets. General Electric (NYSE: GE) comes to mind (it should, because I own it!). So, bravo to Goodyear for a well-executed period, but I won't be allocating investing dollars toward it; I know it's Valentine's Day and all, but I just don't feel the love.
Disclosure: I own shares of GE, and may buy more after this post.
U.S. stock futures were lower this morning, indicating a lower start for U.S. stocks ahead of the Federal Reserve's policy meeting and as investors grow more concerned about the Fed's decision and worry it may not deliver the much anticipated rate cut businesses wish for.
Yesterday, U.S. stocks continued their advance heading into the Fed's next rate decision. The Dow industrials rose 63 points, or 0.46%, the Nasdaq Composite added 13 points, or 0.47%, and the S&P 500 rose 5 points, or 0.37%.
Not much economic data is due out today except for October consumer confidence to be released at 10 a.m. EDT. Oil prices dropped to below $93 a barrel today from the record set overnight as the disruption of a fifth of the oil production by Mexico's state oil company is now seen as only temporary.
What will be at the center of attention the next two days is the Fed's two day policy meeting starting today. Policy makers will discuss interest rates and the economic outlook and will announce their decision tomorrow. While many in the market expect the central bank to lower rates by a quarter- to half a percentage point, the Wall Street Journal reported that the Fed is considering [subscription] a quarter-point rate and no cut at all.
The dollar continued to decline and hit a 26-year low against the British pound as the Bank of England keeps interest rates at a six-year high, while the Fed may cut rates tomorrow. The dollar's weakness may be a consideration in the Fed's decision. Other considerations would no doubt be problems in the mortgage markets and the slump in the housing market. The S&P releases its August Case-Schiller home price index this morning. Yet another consideration would be possible financial markets turmoil and the risks involved that could lead to a recession as some economists say. The debt crisis is far from over according to them.
Overseas, Asian markets closed mostly lower, but Hong Kong and Shanghai gained. European markets were also lower.
Reporting today are Dow component Procter & Gamble (NYSE: PG), as well as Liz Claiborne (NYSE: LIZ) and Goodyear Tire (NYSE: GT).
Update: Procter & Gamble (NYSE: PG) reported that first-quarter profit rose 14% on strong sales growth across nearly all regions. Sales rose 8% to $20.2 billion. Excluding a German tax benefit of 2 cents per share, the company earned 90 cents per share in the latest period. Analysts were expecting a profit of 89 cents per share on revenue of $20.23 billion.
The Wall Street Journal reported Google (NASDAQ: GOOG) plans to unveil within the next two weeks a proposal to finally bring the Google-powered cell phones to market by the middle of 2008.
Although they spent most of the day in the green the indexes gave up ground through most of the session to close just in the red.
The NYSE had volume of 3.6 billion shares with 1,612 shares advancing while 1,706 declined for a loss of 6.18 points to close at 9,428.86. On the NASDAQ, 2.2 billion shares traded, 1,426 advanced and 1,685 declined for a loss of -2.65 to 2,542.24.
EMC Corporation (NYSE: EMC) rose $1.33 (8%) to $19.05; ahead of it's subsidiary VMware making its debut on the NYSE tomorrow in an IPO that analysts are predicting will be big. EMC will retain 90% of the shares. This is likely the reason for the active calls as EMC Corp. (NYSE: EMC) saw heavy volume on the August 19 calls (EMCHT) with over 56,000 options trading.
In options there were 5.4 million puts and 5.8 million calls traded for a put/call open interest ratio of 0.92. The CBOE Volatility Index has been high closing today at 26.57. This is the fear indicator of the market. Not only is the index up, but options on the index are high with the CBOE S&P 500 Volatility Index (NASDAQ: $VIX) moving volume on the August 25 calls (VIXHE) with over 35,000 contracts.
Other stocks with active options include State Street Boston (NYSE: STT) saw heavy volume on the November 75 calls (STTKO) with over 60,000 options trading. Most of the active puts were on the indexes and the iShares Russell 2000 ETF (NYSE: IWM) had volume on the August 78 puts (IOWTZ) with over 86,000 options trading.
Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.
MOST NOTEWORTHY: RadioShack (RSH), Weyerhauser (WY), Goodyear Tire (GT), Hot Topic (HOTT) and Unilever (UL, UN) were today's noteworthy downgrades:
Citigroup downgraded RadioShack (NYSE: RSH) to Sell from Hold on valuation as they believe shares have priced in a more aggressive top-line recovery than the company can deliver over the next 12 months and that margin improvement is likely to slow.
Merrill downgraded Weyerhauser (NYSE: WY) to Neutral from Buy based on the tighter credit environment and the impact on a potential containerboard divestiture or merger.
Matrix downgraded shares of Goodyear Tire (NYSE: GT) to Sell from Hold to reflect rising oil prices and negative fundamental trends.
AG Edwards downgraded Hot Topic (NASDAQ: HOTT) to Sell from Hold to reflect negative performance momentum and a lack of back-to-school prospects.
Credit Suisse downgraded Unilever (NYSE: UN, UL) to Underperform from Neutral as their analysis suggests the company continues to lose market share...
While the market plummeted 311 points today on loan worries; it is easy for people to forget the market is still up. Last week when the Dow broke 14,000; it was up 12.3% for the year. Now the market is up 8.1%. But are we really in a crisis? Market corrections are a normal part of the action and we will live through it. People celebrate when their favorite retail stores have a sale and drop prices; but when the stock market has a sale they panic.
The NYSE had volume of 4.2 billion shares with 313 shares advancing while 3,036 declined for a loss of 275.98 points to close at 9,654.38. On the NASDAQ, 3.5 billion shares traded, 553 advanced and 2,583 declined for a loss of 48.83 to 2599.34.
The options market saw about two and have time normal activity with 11.3 million puts and 8.6 million calls for a put call ratio of 1.3. A lot of this volume was on the indexes we usually ignore index option volume because it isn't that interesting by the PowerShares QQQ Trust ETF (NASDAQ: QQQQ) saw heavy volume on the August 50 calls (QQQHX) with over 109,815 options trading and the 49 calls (QQQHW) moved over 84,000 contracts. On the put side of things there were a lot of people buying insurance with the August 48 puts (QQQTV) moving 147,000 options trading and the August 49 puts (QQQTW) counted over 122,000 options traded. Apple Computer (NASDAQ: AAPL) saw heavy volume on the August 150 calls (APVHJ) with over 74,816 options trading as the stock moved up 6% today. General Motors (NYSE: GM) saw heavy volume on the January 40 calls (GMAH) with over 33,000 options trading.
Kevin Kersten is an Options Analyst with InvestorsObserver.com. Mr. Kersten does own Office Depot Stock.
MOST NOTEWORTHY: Arthur J. Gallagher (AJG), Akamai Technologies (AKAM) and three railcar companies were today's noteworthy initiations:
Citigroup believes Arthur J. Gallagher (NYSE: AJG) is at a disadvantage to smaller rivals who accept contingent commissions and lacks the global presence of larger competitors, and started shares with a Sell rating and $25 target.
Friedman Billings believes Akamai (NASDAQ: AKAM) can leverage its broad product portfolio, global network deep pockets and extensive track record to remain the leader in the content delivery market, starting shares with an Outperform.
When you are in the industrial supply business, the competition is ubiquitous and differentiating yourself presents a particular challenge. There is a firm in in Melville, New York that solves the problem by stocking over a half a million products and guaranteeing same day shipment.
MSC Industrial Direct Co. (NYSE: MSM) markets a range of industrial products that includes cutting tools, measuring instruments, tooling components, fasteners, plumbing supplies, electrical supplies, flat stock, raw materials, abrasives, hand tools and power tools. Suppliers include 3M (NYSE: MMM), Black & Decker (NYSE: BDK), Dow Chemical (NYSE: DOW), Eaton Corporation (NYSE: ETN), Goodyear Tire & Rubber (NYSE: GT), Honeywell International (NYSE: HON) and Kimberly-Clark (NYSE: KMB). The company serves nearly 350,000 customers, via a master catalog, supplemental publications, telemarketing and the internet.
The firm surprised the Street late last month, when it reported solid Q3 numbers and guided Q4 estimates above consensus Street views. The share price popped on the news and has since been consolidating the gain in a bullish "pennant" pattern. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the issue with four "strong buys," three "buys," one "hold" and one "sell." Analysts see an 18% average annual growth rate, through the next five years. The MSM Sales Growth rate (32.27%), EPS Growth rate (26.00%), Return on Assets (17.72%), Return on Investment (20.86%) and Return on Equity (15.57%) compare favorably with industry, sector and S&P 500 averages. Institutions own about 69% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $37.23 and $56.91. A stop-loss of $49.75 looks good here.
Stock futures are indicating that markets might start the trading session lower, after good earnings from Microsoft, but ahead of the much anticipated GDP report.
Yesterday the Dow closed at another record high. The Nasdaq also closed higher, but the S&P 500 index was a little down. Earnings from Apple the day before helped lift tech stocks, while earnings from Exxon Mobil and 3M helped lift the Dow. After the close, Microsoft Corp. (NASDAQ: MSFT) reported earnings that beat analyst estimates that were boosted by Vista sales. MSFT share are up over 5% in pre-market trading.
Today, despite the strong results from Microsoft yesterday, investors are looking ahead at the economic data to be released this morning.
At 8:30, before the opening bell, the government will release first-quarter advanced gross domestic product, the broadest measure of economic activity. This could affect the market if results are too low or too high. Economists are expecting GDP growth to be at 1.8% in the quarter, compared to 2.5% in the previous quarter. Any number that is much below that, would indicate economic growth is slowing too much, any number much above it, could trigger a rate hike from the Fed with the intention to curb inflation. The Street prefers a slow, steady economic growth.
Other economic data released today include the Labor Department's price index and employment cost index for the first quarter due at 8:30, which are measures of inflation, and University of Michigan's revised index of consumer sentiment in April to be reported at 10:00.
Overseas, Asian markets closed lower and European stocks also fell for -- the first time in three days -- ahead of the U.S. GDP report.
In other corporate news, Citigroup Inc. (NYSE: C) won control of Japanese brokerage Nikko Cordial Corp. after shareholders have agree to the $7.7 billion buyout offer.
This morning's disappointing news on last month's sales of new homes has put the markets trading in the red on the day. However, there have been a couple of stocks that have managed to trade up to new 52-week highs in today's session.
Goodyear Tire & Rubber (NYSE: GT) has traded up very nicely to start off the week. The stock set a new 52-week high today at $32.16 and is currently trading up 4.9% to $31.78, up $1.49. Not only is this a new 52-week high for the stock, but also the highest the tire maker has traded in the last seven years. Last Friday the company announced that it was going to be selling its engineered products unit for $1.475 billion to the private equity firm Carlyle Group.
Abbott Laboratories (NYSE: ABT) has also seen some good upside in today's market. The stock has been on the run following a report that showed that its drug coated stents were superior at treating clogged heart arteries than its competitors, Boston Scientific (NYSE: BSX). The news sent shares of ABT soaring to a new 52-week high of $57.10 and the stock is still trading right around that price at $57.06 up $3.20 or 5.9%. Shares of BSX on the other hand have been punished in today's action. The stock is currently trading down 6.5% to $14.21 down $1.01. The stock set a new 52-week low earlier in the session of $13.88.
RadioShack Corp (NYSE: RSH) has seen its shares set a new 52- week high in today's market. Over the weekend the company received some praise from Barron's which said that it thought the company could climb by as much as 30% over the next 12 to 18 months. The stock has already managed to climb over 60% this year and Barron's thinks that there is still money to be made on the stock. Wall street seems to agree and has lifted the stock 0.3% on the day to $27.25 up $0.11. The stock set a new 52-week high earlier in the session at $27.88 before some profit taking came in to push shares down slightly.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
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MOST NOTEWORTHY: Motorola, Williams-Sonoma and Synchronoss were today's noteworthy downgrades: 
Here are some highlights from this past week's 
U.S. stock futures were lower this morning, indicating a lower start for U.S. stocks ahead of the Federal Reserve's policy meeting and as investors grow more concerned about the Fed's decision and worry it may not deliver the much anticipated rate cut businesses wish for.
Although they spent most of the day in the green the indexes gave up ground through most of the session to close just in the red. 
While the market plummeted 311 points today on loan worries; it is easy for people to forget the market is still up. Last week when the Dow broke 14,000; it was up 12.3% for the year. Now the market is up 8.1%. But are we really in a crisis? Market corrections are a normal part of the action and we will live through it. People celebrate when their favorite retail stores have a sale and drop prices; but when the stock market has a sale they panic. 
Street views. The share price popped on the news and has since been consolidating the gain in a bullish "pennant" pattern. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Stock futures are indicating that markets might start the trading session lower, after good earnings from Microsoft, but ahead of the much anticipated GDP report.
RadioShack Corp
The week in preview: New quarter earnings kick-off
Comfort Zone Investing: Keep your recovery expectations real
Will Americans have to slim down to fit into their cars?
