Today was all about financial bailout packages being on and off, and on and off, and on and off. Financial stocks were most of the news, but you've heard enough about that you will only hear about non-financial companies today. Q2 GDP was revised lower than original projections, but that number is older than dirt now. The funny thing today was that they started ringing the closing bell on NYSE a minute early on accident.
Below are the unofficial closing bell levels: DJIA 11,160.49 +138.43 +1.26% S&P500 1,214.56 +5.38 +0.44% NASDAQ 2,185.56 -1.01 -0.05% 10YR T-Note 3.827% (-0.035%) TOP ANALYST CALLS 52-Week Lows
KB Home (NYSE: KBH) posted really ugly numbers with its losses growing four-fold and sales down over 50%. Yet somehow, traders are hoping a bailout will drive the future. Shares were actually up 1.2% at $21.42 immediately before the close.
Research In Motion Ltd. (NASDAQ: RIMM) was downgraded across the board after its earnings disappointment. Shares were down 26%, or $21.50, right before today's close.
Marvell Technology Group Ltd. (NASDAQ: MRVL) was crushed on R-I-M's disappointing numbers. Shares hit a new 52-week low and were down 10.4% at $9.64 in the final minutes of the day.
Potash Corp. of Saskatchewan (NYSE: POT) was down over 7% in today's final minutes at $146.57. An analyst downgrade from RBC and a cautious sector call from Citi is to blame. The concern here is easy. Farmers are having their credit cut and they can't afford to pay endless increases in agriculture prices.
Royal Bank of Scotland (NYSE: RBS) made an anticipated announcement that it would raise $12 billion because of losses. According toReuters,the money is "to cover a potential 5.9 billion pound writedown on the value of toxic assets and help rebuild a stretched balance sheet."
The fact that one of Europe's largest money center banks has to raise so much capital is probably not a good sign for large U.S. banks like Citigroup (NYSE:.C) and Bank of America (NYSE:.BAC). The asset mix at RBS is likely not terribly different from most other huge financial institutions.
There have been concerns that if the housing market continues to fall and credit problems move to consumer debt and car loans that the writeoffs at banks could spike up again. Those who hoped that the worst was behind U.S. banks may well be wrong.
Douglas A. McIntyre is an editor at 247wallst.com.
Its abundance of resources and location on the Great Lakes have made Ontario an economic powerhouse. Canada's capital, Ottawa can be found there, as well as its largest city, Toronto, which is also Canada's financial hub. Seven of Ontario's eight largest companies are financial institutions, and Toronto is also the home of one of the largest stock exchanges in the world. When the Motley Fool took a look at stock investment opportunities in Ontario this past June, three of the companies they focused on were financial institutions: Royal Bank of Canada (NYSE: RY), Manulife Financial Corp. (NYSE: MFC) and Toronto-Dominion Bank (NYSE: TD). Considering the credit crunch and the weakness of the U.S. dollar, I thought it might be interesting to see how those companies are faring now.
The Royal Bank of Canada, also known as RBC Financial Group, is Canada's largest financial institution. It has 1,300 domestic locations and offices in 30 countries. In September, RBC's Gord Nixon won Canada's Outstanding CEO of the Year award for 2007. More recently, RBC announced the acquisition of a Caribbean bank, and it was one of four Canadian banks affected by restructuring at VISA. With RBC's five-year earnings per share growth rate of 26.5% (better than the S&P 500), the consensus recommendation of analysts surveyed by Thomson Financial is to buy RBC, despite missing earnings expectations for the past two quarters. RBC's share price is near an all-time high on the NYSE, closing Thursday at $57.09 on the NYSE. RBC will release its next quarterly report on November 30.
Wisconsin does lead the nation in cheese production. Heck, two of those three items -- cheese, corn, and beer -- even appear on the Wisconsin design state quarter. Despite Wisconsin's reputation as an agricultural state, though, agriculture isn't the largest part of the state economy. Tourism is also an important industry in Wisconsin, with such destinations as the Wisconsin Dells, Circus World and the House on the Rock, but that's not the leading sector either. Manufacturing makes up the largest part of the Wisconsin economy, as the companies on Fortune's list indicate.
At number 21 on the list of the fastest growing companies was aerospace components maker Ladish, which is headquartered in Cudahy, Wisconsin. Ladish's three-year annual revenue growth rate was 28% and its five-year earnings per share growth was 104%. Back in July, Ladish reported a strong second quarter, beating expectations, and a solid outlook for rest of the year. Then, in August, the company announced that it would expand its operations in Poland. Analysts surveyed by Thomson Financial consider Ladish a buy. The share price reached a 52-week high of $60.00 on Tuesday. It was trading in the mid $20s a year ago.
MOST NOTEWORTHY: The process control sector, R.H. Donnelley, Vonage, Coca-Cola Enterprises and Transocean were today's noteworthy downgrades:
Baird reduced estimates across the board in the process control sector due to lower expectations for North American industrial and residential construction. The firm downgraded Roper Industries (NYSE: ROP), Regal-Beloit Corp (NYSE: RBC) and Baldor Electric (NYSE: BEZ) to Neutral from Outperform and AO Smith Corporation (NYSE: AOS) to Underperform from Neutral.
Goldman downgraded shares of R.H. Donnelley Corporation (NYSE: RHD) to Neutral from Buy after the company updated its 2007 guidance to reflect deteriorating trends in local advertising.
Vonage Holdings Corp (NYSE: VG) was downgraded to Sell from Hold at Soleil due to liquidity concerns.
Coca-Cola Enterprises (NYSE: CCE) was downgraded to Hold from Buy at Deutsche Bank on valuation and mixed near-term trends.
Transocean Inc (NYSE: RIG) was downgraded to Hold from Buy at Gabelli. Even though the deepwater market continues to be strong, the firm is concerned regarding the continuing weakness in the jackup market as well as the limited upside potential due to the company's ships being in use through 2009.
Ciena Corporation (NASDAQ: CIEN), the optical components maker, has gotten hit pretty hard during this correction. The stock has dropped from $32 in late February and is trading around $26 today, almost a 20% drop.
This morning, RBC Capital Markets upgraded the stock to Outperform and set a $33 target price. The reasoning for the upgrade is expected stronger demand for its products due to high video and data traffic. The RBC report cited industry growth is expected to jump to $14.5 billion by 2009 up from $10.9 billion in 2006. If Ciena continues to grow faster than the market, that is good news for Ciena and its shareholders.
At Verizon Communications Inc (NYSE: VZ), a large customer, business is expected to be down, but growth from British Telecom, AT&T Inc (NYSE: T) and MCI may offset the decline, the report suggested.
Ciena's sell off is too much too fast. I'd suggest using the stock weakness to pick up some shares.
RBC Capital Markets initiated three Chinese Internet companies this morning: Baidu.com Inc (NASDAQ: BIDU) with a Sector Perform and a $124 price target, SINA Corporation (NASDAQ: SINA) with a Sector Perform and a $39 price target, and Sohu.com Inc (NASDAQ: SOHU) with an Outperform and a $33 price target. RBC believes Sohu.com is well positioned to benefit from secular growth in online advertising and is the most direct beneficiary of the 2008 Beijing Olympics, as it hosts the official site.
OTHER INITIATIONS:
Citigroup Inc (NYSE: C) was initiated by JP Morgan with an Overweight. The firm sees performance in international, corporate and investment banking improving.
Callaway Golf Company (NYSE: ELY) was initiated by Morgan Joseph with a Buy and $19 price target.
L-3 Communications Holdings Inc (NYSE: LLL) was downgraded by Bank of America to Neutral from Buy based on valuation, as they see limited upside from current levels. The firm's target for L-3 is $92.
NewMont Mining Corp (NYSE: NEM) was downgraded by RBC Capital Markets to Underperform from Sector Perform based on Newmont's weak production profile and declining financial forecasts. The firm lowered its price target for Newmont to $48 from $52.
OTHER DOWNGRADES:
K Swiss Inc (NASDAQ: KSWS) was downgraded by Susquehanna to Neutral from Positive. The firm does not believe domestic sales will stabilize until 2008 and sees European growth being less robust over the next several quarters.
Alltel Corporation (NYSE: AT) was downgraded at Deutsche Bank to Hold from Buy on valuation. The firm's target for Alltel is $63.
News Corporation (NYSE:NWS) is a prime example of how traditional media companies can leverage New Media. The formula is: buy a hot Internet property. And then leave it alone. Allow it to keep growing.
It has been magical for MySpace, which is the most trafficked site on the Web. And, despite intense competition, MySpace is still dominant.
So, an analyst at RBC, Jordan Rohan, looked into the following: What is MySpace really worth?
Well, valuation is not really a science – especially when trying to figure what a company is worth when it is a part of a large, sprawling organization.
But, there are some tried-and-true techniques that help. In fact, one approach is known as comparable valuation. It's basically what appraisers use to value houses. That is, the value of a house is probably related to similar houses that have sold recently.
Despite good news from Wall Street analysts today: Rochdale Securities upgraded eBay to buy from hold with a $35 target price, and RBC initiated coverage at hold, with the same price target, eBay slipped nearly 1.5% today to close at $30.28.
Concerns are mounting among investors especially after a local research firm in Taipei released its data. The analyst claims eBay has been losing ground in China to one of its competitors, especially in the C2C (consumer to consumer) sales.
Somewhat different were the words of Martin Wu, chief executive at eBay China. He claimed only a few weeks ago that revenue increased more than 10 per cent in the first quarter and that revenue of its competitor Taobao, remained unchanged.
The attempt to consolidate the difference between the analyst's data and the chairman data were unfruitful.
eBay was the leader in the Chinese auction market but in January had to drop transaction fees from basic C2C services. This is due to the introduction of a free auction service by rival Taobao in 2004 that caused a massive flight of consumers in its direction.
Today was all about financial bailout packages being on and off, and on and off, and on and off. Financial stocks were most of the news, but you've heard enough about that you will only hear about non-financial companies today. Q2 GDP was revised lower than original projections, but that number is older than dirt now. The funny thing today was that they started ringing the closing bell on NYSE a minute early on accident. 
Its abundance of resources and location on the Great Lakes have made 
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News Corporation (NYSE:NWS) is a prime example of how traditional media companies can leverage New Media. The formula is: buy a hot Internet property. And then leave it alone. Allow it to keep growing.
Despite good news from Wall Street analysts today: Rochdale Securities upgraded eBay to buy from hold with a $35 target price, and RBC initiated coverage at hold, with the same price target, eBay slipped nearly 1.5% today to close at $30.28.
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