Today ended up being another one of those days that almost could have been special. Despite futures being lower all morning after the Asian markets slid into oblivion with Japan at 26-year lows, U.S. markets recovered on less-bad housing sale data and an S&P report that said the Christmas of 2008 shopping season may only be flat compared to 2008. Both were bad, but very acceptable for the current poor sentiment. Unfortunately, late day selling from redemptions and the "re-emergence of fears" took hold.
Dillard's Inc. (NYSE: DDS) was up over 30% at $4.48 in today's final minutes of trading. Management bought shares and insiders want new management.
Humana (NYSE: HUM) almost didn't make sense as far as the trader reaction to earnings is concerned. The health insurer posted earnings at $1.49 EPS vs. estimates of $1.47 and gave guidance of $1.00 to $1.10 after a $0.10 item vs. $1.20 estimates. For 2009, it sees earnings at $5.90 to $6.10 vs. $5.85 EPS estimates. That gives a forward P/E ratio of under 7, yet shares were down 14% at $31.12 right before the close of trading.
Coventry Health (NYSE: CVH) shares were down nearly 17% in after-hours trading Wednesday after the managed-care provider lowered estimates for second-quarter and full-year earnings due to disappointing April and May results. Wachovia downgraded CVH to Market Perform from Outperform. Other healthcare stocks felt the pressure and were down in after-hours or premarket trading: UnitedHealth (NYSE: UNH) -7%, Aetna (NYSE: AET) -9.9%, WellPoint (NYSE: WLP) -6%, Humana (NYSE: HUM) -5% and Cigna (NYSE: CI) -5%.
Carnival (NYSE: CCL) is due to report second-quarter financial results. Circuit City Stores Inc. (NYSE: CC) is due to release first-quarter financial results.
Hewlett-Packard (NYSE: HPQ) is reorganizing its printer unit in the face of declining growth of the business, The Wall Street Journal reported. Basically, as consumers print less, H-P is trying to adapt and is reducing five business unitsto three.
It has been a tough year for investors. We have been dealing with recession fears, housing market worries, high gasoline prices and a very weak U.S dollar. As much as we would love to say that the worst is behind us, we still could be in for some more rocky times ahead. So its best to try to figure out which stocks would be best to avoid for the time being.
Richard Gibbons wrote up a nice piece over on The Motley Fool that looks at some of the stocks that we would be wise to stay away from at this time. Regardless good or bad times, he is convinced there are always ways to make money, but in order to find the winners, it is also necessary to pull out the losers.
So how can we separate out the winners from the losers?
Gibbons seems to have a simple answer for this. He believes there is really no use in wasting our time trying to separate the winners from the losers as there are so many great cheap stocks that could offer us a chance to make money. Gibbons' advice is to not choose ugly and risky companies that could put our hard earned money at risk. To makes this clear, he uses a baseball analogy, expressing his options for the curve balls instead of the fastballs.
If you wanted two situations to describe today's rally, first you can thank S&P and second you can thank Barney Frank. S&P and Moody's have had the markets by the you-know-whats, but today they issued a report calling "the end in sight" on write downs.
Congressman Barney Frank was out calling for the FHA to get involved as a mortgage backstop to help one or two million mortgage holders. It is pretty impressive that the market rallied when we simultaneously saw gold hit $1,000/ounce and oil hit $110/barrel. Below are the unofficial closing levels for the markets.
UBS has upgraded AstraZeneca (NYSE:AZN) to "neutral" with a short-term "sell" rating, according toMarketWatch.
Morgan Stanley downgraded AIG (NYSE:AIG) to "equal weight" from "overweight," according toBriefing.com. The news service also said that UBS upgraded Humana (NYSE:HUM) to "neutral" from "sell".
JA Solar (NASDAQ:JASO) was raised to "overweight "at Lehman Brothers according to 24/7 Wall St.
The stock market was up earlier today on hopes of a continue follow-on from yesterday's monster gains, but closed weak at the end of the day. The good news is that we didn't give back most of yesterday's gains. The bad news is that bears can claim there isn't enough positive mojo to keep the market surging a second day. That's what makes a ballgame. Seeing oil hit $110 per barrel probably didn't help matters for those hoping for an ease in gas prices and a break for retail. Below are the unofficial market closing levels:
Southwest Air (NYSE: LUV) was one of the standout stocks with a 7% price drop down to $11.49 after it grounded 41 planes and canceled flights. The airline will recover from this incident, but what is odd is that if you look it up and down it isn't rewarding shareholders even when it cheats.
Humana Inc. (NYSE: HUM) was the news disaster of the day for large cap stocks with a 13.7% drop to $40.88 after noting higher pharmacy charges were going to nearly chop first quarter earnings in half. The stock put in another 52-week low under the $42.85 prior low despite a Merrill Lynch upgrade late in the day defending the stock.
A biotech called Progenics Pharmaceuticals, Inc. (NASDAQ: PGNX) acted as the biotech implosion of the day with a monster drop of 63% to $5.31 (close to perceived cash balance) after its bowel drug failed in Phase II tests. It looks like the placebo was even better.
Thornburg Mortgage (NYSE: TMA) was the monster gainer today with shares up 82% to $2.86, after its coverage was raised to Peer Perform at Bear Stearns. KLA-Tencor (NASDAQ: KLAC) saw shares fall more than 9% to $37.80 on a downgrade today. (Top 10 pre-market calls).
Tomorrow we have the weekly jobless claims, and while weekly numbers are less watched they may be more front and center as everyone is hoping the job market doesn't head as far south as the economy. We also have February import prices, so we'll get to see more evidence of the inflation we know is there.
Yesterday was a difficult trading session for the managed healthcare group, with industry giant WellPoint Inc. (NYSE: WLP) cutting its 2008 profit forecast, blaming higher claims expense and the weak market conditions. Today is another tough day, with health care companies taking another hit on pressure from Humana Inc. (NYSE: HUM), which warned about lower-than-expected first quarter and full year earnings results.
Blaming increased prescription expenses, the second largest seller of Medicare drugs cut its first-quarter earnings outlook to a range of 44 to 46 cents a share against its previous prior guidance of 80 to 85 cents a share. Analysts, on average, expected the health insurer show higher first-quarter earnings of 78 cents, according to Thomson Financial.
The company also projected full-year earnings between $4.00 and $4.25 per share, down from a previous forecast of $5.35 to $5.55. Humana's estimates were below analysts' expectations for full-year earnings of $5.47per share.
Coventry Health Net (NYSE: CVH), a managed healthcare organization, is recently trading at $39 in pre-open trading, below its close of $43.
Humana (NYSE: HUM) lowered Q1 and 2008 guidance this morning and Wellpoint (NYSE: WLP), a health benefits company, lowered its full-year financial outlook on March 11.
CVH overall option implied volatility of 40 is above its 26-week average of 30 according to Track Data, suggesting larger price movement.
Health Net (NYSE: HNT), a managed care organization, is recently trading at $31.43 in pre-open trading, below its close of $34.58.
HNT overall option implied volatility of 45 is above its 26-week average of according to Track Data, suggesting larger price risk.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Outfits that manage health care plans bring an amazing array of business and technical specialists together to deal with a service that can be as complex socially as it is medically. One of the most successful U.S. practitioners of the art is headquartered in Louisville, Kentucky.
Humana (NYSE: HUM) provides health insurance coverage and related services through various employer groups and government-sponsored programs. It offers Medicare Advantage health plans and prescription drug coverage to members throughout the United States and administers managed care plans for other government agencies and the military. It also offers health plans and specialty products to commercial employers and individuals. In all of its programs, Humana serves more than 13 million members. Aetna (NYSE: AET) and Cigna (NYSE: CI) are major competitors.
The company pleased investors last week, when it affirmed its in-line FY08 EPS guidance of $5.30 to $5.50. It also reiterated its forecast for a net 2008 membership gain of 200,000-250,000 in Medicare Advantage enrollment.
MOST NOTEWORTHY: Amazon.com, PG & E and Centerplate were today's noteworthy upgrades:
Citigroup upgraded shares of Amazon.com (NASDAQ: AMZN) to Buy from Hold and raised their target to $119 from $95 as they believe the recent weakness has created an attractive entry point and that Amazon has one of best Fundamental outlooks for 2008 among all U.S. internet stocks.
The firm also upgraded PG & E (NYSE: PCG) to Buy from Hold on valuation, as they believe skepticism around the company's 8% EPS growth target is alredy priced into the stock.
Centerplate Inc. (AMEX: CVP) was raised to Buy from Neutral at Piper on valuation following the recent weakness.
OTHER UPGRADES:
CIBC upgraded Humana Inc. (NYSE: HUM) to Sector Outperformer from Sector Performer.
Today ended up being another one of those days that almost could have been special. Despite futures being lower all morning after the Asian markets slid into oblivion with Japan at 26-year lows, U.S. markets recovered on less-bad housing sale data and an S&P report that said the Christmas of 2008 shopping season may only be flat compared to 2008. Both were bad, but very acceptable for the current poor sentiment. Unfortunately, late day selling from redemptions and the "re-emergence of fears" took hold.
Here are some highlights from this past week's 
Yesterday was a difficult trading session for the 
Coventry Health Net
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