What a difference a few hours makes. Earlier today, we were in the process of seeing the stock market take out the lows of October. At that point the buyers ignored the 516,000 jobless claims from this morning and they started hitting their "buy" buttons on their keyboards. The gains came on strong in the afternoon, and most of them late in the afternoon. Here are the unofficial closing bell levels: DJIA: 8,835.25 (+6.67%) NASDAQ: 1,596.70 (+6.50%) S&P 500: 911.28 (+6.92%)
General Electric Co. (NYSE: GE) had been down all day on rumors and fears about the dividend status, but shares came back and ended up 4.3% at $16.87.
Intel Corp. (NASDAQ: INTC) closed up 6.7% at $14.43 despite the company's warning last night. While warnings are somewhat expected, this was a severe drop of about 15% to revenues.
Sprint Nextel Corp. (NYSE: S) rose over 14% to $2.24 after the company announced that it was going to pursue employee buyouts for certain back office peronnel. Cutting costs seems to be popular in hard times, and buyouts do not create the unpleasantries inside an office like layoffs do.
Wal-Mart Stores Inc. (NYSE: WMT) managed to beat earnings, but the company said that currency issues were making it take guidance slightly under the mid-point for next quarter. Shares closed up over 4% at $54.39.
Urban Outfitters Inc. (NASDAQ: URBN) was up 9.5% at $16.66 right at the close today. Shares were down earlier after the company met earnings expectations, but strange options trades may have helped lift the stock.
Baird upgraded Optimer Pharm (NASDAQ: OPTR) to Outperform from Neutral and raised its target to $13 from $8 citing the decidedly positive data from the OPT-80 trial.
Banc of America upgraded Quest Diagnostics (NYSE: DGX) to Buy from Neutral on valuation and believes management has set expectations well.
Credit Suisse views Jacobs Engineering (NYSE: JEC) as a high quality name given the quality of management, execution track record, and relationship business model. Shares were upgraded to Outperform from Neutral.
Horizon Lines (NYSE: HRZ) was upgraded to Overweight from Equal Weight at Stephens.
Merriman upgraded Smith & Wesson (NASDAQ:SWHC) to Buy from Neutral on valuation after channel checks indicated an increase in gun sales in October after an Obama win became apparent. The firm believes shares can trade up into the $4 to $5 range.
Credit Suisse upgraded Wells Fargo (NYSE:WFC) to Outperform from Neutral citing the company's improved balance and potential earnings power following its $11B equity offering.
JP Morgan upgraded Coca-Cola Enerprises (NYSE:CCE) to Overweight from Neutral on valuation and easing commodity and labor costs.
Manulife (NYSE:MFC) was raised to Outperform from Sector Perform at RBC Capital.
Molina Healthcare (NYSE:MOH) was upgraded to Equal Weight from Underweight at Barclays.
Analyst downgrades:
Barclays downgraded General Motors (NYSE:GM) to Underweight from Equal Weight on cash concerns and believes any assistance from the government would substantially dilute equity holders. Barclays set a $1 target on GM shares.
Stephens cut LandAmerica (NYSE:LFG) to Underweight from Equal Weight following the Fidelity National (NYSE:FNF) takeover as they expect no other bidders to emerge and believe shares could go back to under $5 if Fidelity National walks away.
Deutsche Bank downgraded solar companies to reflect deteriorating fundamentals in the sector, an adequate supply of c-Si modules, the strengthening dollar and restricted access to capital. First Solar (NASDAQ:FSLR), Canadian Solar (NASDAQ:CSIQ), Energy Conversion (NASDAQ:ENER) and Sunpower (NASDAQ:SPWRA) were downgraded to Hold from Buy.
FMC Technologies (NYSE:FTI) was lowered to Underweight from Neutral at JP Morgan.
Analyst initiations:
Freeport McMoRan, HLS Systems, and Kimberly Clark were today's noteworthy initiations:
Banc of America expects Freeport McMoRan's (NYSE:FCX) earnings will decline sharply in 2009 and thinks the dividend could be at risk. Shares were initiated with a Neutral rating and $29 target.
Roth Capital initiated HLS Systems (NASDAQ:HOLI) with a Buy rating and $5 target. The firm is positive on the company's management team and the company's outlook for EPS growth.
Citigroup thinks Kimberly Clark's (NYSE:KMB) margins have bottomed and that the current valuation is too low. Shares were assumed with a Buy rating and $65 target.
U.S. stock futures were higher Monday morning, indicating stocks could rise at the open after China Sunday announced a $585 billion stimulus package, which includes tax cuts and infrastructure spending. This cause world markets to climb as well as commodities. Oil followed stock markets and jumped above $64 a barrel. Another boost to stocks was further aid from the government to AIG.
[Update 8:25: Circuit City Stores Inc. (NYSE: CC)filed for bankruptcy. Shares are down 52% in premarket trading to 12 cents.]
American International Group (NYSE: AIG) -- The government on Monday provided new financial assistance to the troubled insurance giant, including pouring $40 billion into the company in return for partial ownership. Altogether, AIG got around $150 billion. AIG shares are shooting up over 21% in premarket trading.
General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F) and Chrysler are also moving closer to a bailout as Obama's chief of staff, Rahm Emanuel, called the industry an "essential" part of the U.S. economy. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid said that the administration should consider expanding the $700 billion financial industry bailout to include car companies. With this kind of support, still undecided is the size and timing of any aid. GM shares are up 2.3% (it was hit by a downgrade from Barclays) and Ford shares are up nearly 5% in premarket trade. [Update 9:10: as expected, with the GM downgrade, it is down over 10% in premarket trading, Ford is only slightly down thought]
NRG Energy Inc. (NYSE: NRG) on Sunday rejected an unsolicited $6.1 billion all-stock bid from nuclear power giant and utility operator Exelon Corp. (NYSE: EXC), calling it too low. NRG shares jumped 6.8% in premarket trading.
This week, some apparel and accessory producers and retailers offer a look at how they've been doing between early summer's economic stimulus spending and the coming holiday season. While Polo Ralph Lauren Corp. (NYSE: RL) reported higher earnings last week, Coldwater Creek Inc. (NASDAQ: CWTR), Eddie Bauer Holdings Inc. (NASDAQ: EBHI), Kenneth Cole Productions Inc. (NYSE: KCP), and K-Swiss Inc. (NASDAQ: KSWS) all reported net losses as consumers pulled back on spending over the summer due to higher fuel prices and other economic worries. The expectations of analysts surveyed by Thomson Financial for such companies scheduled to report this week don't look much different; i.e., a bright spot or two among lower expectations overall.
Hip retailer Urban Outfitters Inc. (NASDAQ: URBN) is expected to post earnings 22.9% higher than a year ago, to $0.35 per share, on revenue of $475.9 million (+26.4%). The Philadelphia-based company already said that same-store sales in the quarter were 10% higher. Urban Outfitters has beat expectations in recent quarters, by 11.5% in the previous quarter, and analysts on average recommend buying URBN. Shares fell to a 52-week low of $16.61 per share on Friday, and are down 29.5% from a year ago. Other companies expected to report more modest earnings growth in the coming week include watch and accessory maker Fossil Inc. (NASDAQ: FOSL), retail giant Wal-Mart Stores Inc. (NYSE: WMT), and TJX Companies Inc. (NYSE: TJX), parent of such discount retail chains as T.J. Maxx and Marshalls. These three companies have tended to top analysts estimates in recent quarters, and Fossil and TJX ended the week near their 52-week lows.
While Los Angeles-based American Apparel Inc. (AMEX: APP) had a strong second quarter, the casual wear maker is expected to report $0.13 per share earnings for the third quarter, the same as in the year-ago period. And analysts anticipate that Kohl's Corp. (NYSE: KSS) will report that profits fell 16.4% to $0.51 per share on revenue of $3.9 billion (+1.9%). Though same-store sales for October fell 9%, the Menomonee Falls, Wis.-based company reaffirmed its third-quarter forecast. Kohl's has offered positive surprises in recent quarters, topping estimates by 5.6% in the previous quarter. The consensus recommendation remains to buy KSS. Shares have been climbing after reaching a 52-week low in late October, but are still down 32.8% from a year ago.
AutoZone (NYSE: AZO) was raised to Buy from Neutral at Merrill Lynch.
B. Riley upgraded S&T Bancorp (NASDAQ: STBA) to Buy from Neutral and lowered its target to $35 from $38 on valuation, as they believe the sell-off post-Q3 results is overdone.
Jefferies upgraded GSI Commerce (NASDAQ: GSIC) to Buy from Hold on valuation after Q4 revenue guidance was reset lower. The firm lowered their target to $13 from $18.
JP Morgan upgraded shares of DHT Maritime (NYSE: DHT) and General Maritime (NYSE: GMR) to Overweight from Neutral on the company's valuation and dividend stability.
Analyst downgrades:
HSBC cut Prudential (NYSE: PUK) to Neutral from Overweight as they believe capital has eroded and debt refinancing is increasingly difficult.
Merrill believes Assurant (NYSE: AIZ) is well-positioned to weather the turmoil in the capital markets environment and cites the company's defensive characteristics for the upgrade. The firm upgraded shares to Buy from Neutral.
Deutsche Bank upgraded R.H. Donnelly (NYSE: RHD) to Hold from Sell to reflect the company's cost cuts and its ability to buy back bonds at discounted prices.
Citigroup raised Consol Energy (NYSE: CNX) to Buy from Hold on valuation as they are seeing no fundamental deterioration in coal.
Research in Motion (NASDAQ: RIMM) was upgraded to Neutral from Underperform at Credit Suisse. Raymond James raised shares to Outperform from Market Perform.
ICF International (NASDAQ: ICFI) was lifted to Overweight from Equal Weight at Stephens.
Analyst downgrades:
Deutsche Bank downgraded Research in Motion (NASDAQ: RIMM) to Sell from Hold after the company reported Q2 results to reflect a deceleration in growth and margin pressures. RIMM's target was lowered to $70 from $120. RBC Capital downgraded Research in Motion to Sector Perform from Outperform citing reduced margin visibility and the slowing macroeconomic environment.
Stephens downgraded Vitran (NASDAQ: VTNC) and Saia (NASDAQ: SAIA) to Equal Weight from Overweight to reflect the companies' deteriorating demand and pricing environment. Vitran's target was cut to $15 from $22 and Saia's was lowered to $16 from $24.
Mentor (NYSE: MNT) was downgraded to hold from Buy at Jefferies to reflect continued weakness in the breast implant market and the potential for lowered guidance. Mentor's target was lowered to $31 from $36.
Merrill cut ING Group (NYSE: ING) to Underperform from Neutral.
CF Industries (NYSE: CF) was downgraded at Citigroup to Hold from Buy.
Suntrust initiated Idexx Laboratories (NASDAQ: IDXX) with a Neutral rating, citing slowing organic revenue growth, valuation and a slowing lab business.
Jefferies initiated Urban Outfitters (NASDAQ: URBN) with a Hold rating and $33 target. The firm prefers to stay on sidelines due to valuation and macro risks.
Hersha Hospitality (NYSE: HT) was assumed with a Market Perform rating and $7.50 target at Keefe Bruyette. The firm believes near-term demand trends in New York City could slow.
Ecolab (NYSE: ECL) was initiated at Baird with a Neutral rating and $54 target.
KeyBanc assumed ENGlobal (NASDAQ: ENG) with a Hold rating.
Piper initiated Pentair (NYSE: PNR) with a Neutral rating and $39 target.
TheStreet.com's Jim Cramer says with gas coming down further, the coming rally could be broad and fierce.
The great hurricane fakeout leaves us with oil much lower than it began, having launched itself from $112. Now that the $110 level's been breached and natural gas has gone as low as $7.50, we can begin to put together a holiday scenario that might -- just might -- explain the incredible run in retail that's been going on.
The presumption in retail, if you use Wal-Mart (NYSE: WMT) (Cramer's Take) as retail, was that once the stimulus wore off, presumably last month, the stocks would get hammered. On Aug. 7, Wal-Mart as much as told you that, and the stock dropped to $57 from $60.90.
Ever since then, it has been creeping up. Kohl's (NYSE: KSS) (Cramer's Take) dropped a point from that warning, going from $45 to $44. It is now at $49. Macy's (NYSE: M) (Cramer's Take) went from $19.80 to $18.90 before bouncing to $20.82. Jones (NYSE: JNY) (Cramer's Take) went from $17.40 to $17.20 before roaring to $19.80. Ralph Lauren (NYSE: RL) (Cramer's Take), because of a great quarter, didn't even get hurt, rallying from $67 to $75.
Even with the stimulus checks, retail sales numbers for June and July have been nothing to cheer about. And this coming week should provide another look at how things have been shaping up in the apparel and accessories arena. A number of companies are scheduled to release quarterly numbers, from upscale retailer Nordstrom to the parent of discounter TJ Maxx, from hipster Urban Outfitters to global giant Wal-Mart. Here's a look at what Wall Street is anticipating.
Analysts surveyed by Thomson Financial expect the following to report strong earnings growth when compared to the same period of the previous year.
The Street.com's Jim Cramer says people have more money in their wallets again, and that can only be positive.
One-time stimulus? Or multi-time pump break? Last night when I was filling up for $3.67 a gallon -- a month after paying $4.10 at the same pump -- I found myself thinking that I didn't have to go to the ATM after the fill-up. I had something left. I didn't feel that way about the stimulus check, which came and went.
When Wal-Mart (NYSE: WMT) (Cramer's Take) said yesterday the effect of the stimulus check was over, people freaked out and trashed the stock well beyond reason. (I will buy more of it today if I can for Action Alerts PLUS.) But Wal-Mart was reacting to the end of that one-time stimulus.
If oil keeps going as I think it will, we are going to see gasoline well below $3.50 -- we have it at $3.60 now with oil at $110 -- and that part of the tax, a real tax that impacts all Americans, will be gone. The oil decline and, more important, the nat gas decline, still haven't registered in peoples' minds. The idea that it is possible that gasoline might go to, say, $3.00, is in no one's model. That your heating bill could be the same or less doesn't matter to the bears, either.
Citigroup upgraded shares of Amgen Inc. (NASDAQ: AMGN) to Buy from Hold and raised the target price to $70 from $50 following AMGN's better-than-expected Q2 results and positive Dmab results.
Credit Suisse upgraded Electronic Data Systems (NYSE: EDS) to Neutral from Underperform and expects the Hewlett-Packard (NYSE: HPQ) transaction to close at the $25/share price.
Analyst downgrades:
JP Morgan downgraded OmniVision (NASDAQ: OVTI) to Neutral from Overweight citing slowing growth and increased competition, as well as the impact on margins.
KeyBanc said Visa's (NYSE: V) strengths are its recurring revenue model, significant pricing power, no consumer credit risk, operating leverage, expense flexibility, and considerable free cash flow, among other reasons. The firm initiated shares with a Buy rating and $94 target.
Regal Entertainment (NYSE: RGC) was assumed at Caris with an Average rating and $18 target. The firm sees tough comps ahead for the company and does not expect any meaningful price increases.
Caris also initiated Marvel Entertainment (NYSE: MVL), as they are positive on the company's new financing vehicle. Shares were initiated with a Buy rating and $45 target.
The earnings season continues to roll on, and next week's results offer a peek at the state of fashion retailing, as a variety of companies -- from the discount to the upscale, from the hip to the pedestrian -- are scheduled to report earnings.
Analysts surveyed by Thomson Financial expect earnings growth, compared to the same period in the previous year, from Urban Outfitters (NASDAQ: URBN) to be 22.7% to 22 cents per share, from Wal-Mart Stores (NYSE: WMT) to be 9.3% to 75 cents per share, and from TJX Companies (NYSE: TJX) to be 7.5% to 40 cents per share.
Analysts expect earnings declines from the previous year from JC Penney (NYSE: JCP) by 52.9% to 49 cents per share, from Kohl's (NYSE: KSS) by 34.4% to 42 cents per share, and from Nordstrom (NYSE: JWN) by 18.3% to 49 cents per share.
In the case of Abercrombie & Fitch (NYSE: ANF), analysts expect earnings to remain flat, year over year, at 65 cents per share.
And then there's Macy's (NYSE: M), which is expected to swing to a loss of 2 cents per share, compared to a profit of 16 cents a year ago.
The sample size may be too small to define any significant trends, but the numbers do suggest that analysts expect profit declines to be deeper than profit growth, and that consumers may be more likely, given the current state of the economy, to buy clothes at Wal-Mart or TJ Maxx than at Nordstrom or Abercrombie.
The coming results will reveal if those expectations are correct.
MOST NOTEWORTHY: Southwest Gas, Hittite Microwave and Repsol SA were today's noteworthy upgrades:
Citigroup upgraded shares of Southwest Gas (NYSE: SWX) to Buy from Hold on valuation, as they believe the company's fundamentals have improved enormously over the last three years.
Thomas Weisel upgraded shares of Hittite Microwave (NASDAQ: HITT) to Overweight from Market Weight, as they believe the company is executing on its strategy of increasing new product introductions and growing its global sales efforts. They believe shares are undervalued and maintain a $43 target.
Repsol SA (NYSE: REP) was raised to Buy from Hold at Deutsche Bank as they expect good news to flow in 2008.
OTHER UPGRADES:
Goldman upgraded CNOOC (NYSE: CEO) to Buy from Neutral and added shares to their Conviction Buy List.
Urban Outfitters (NASDAQ: URBN) was raised to Equal Weight from Underweight at Morgan Stanley.
Urban Outfitters Inc. (NASDAQ: URBN) shares opened higher this morning but have slipped throughout the day after the company posted a fourth-quarter profit of $53.6 million, or 32 cents per share, helped by fewer markdowns and increased same-store sales. Analysts had been expecting URBN to post a profit of 29 cents per share. Today's weakness could be attributed to some bad retail reports from other companies, but comparatively, URBN's performance today is not too bad. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on URBN.
After hitting a one-year low of $19.20 in July, the stock hit a one-year high of $31.32 in just this past month. URBN opened this morning at $30.01. So far today the stock has hit a low of $28.94 and a high of $30.45. As of 12:30, URBN is trading at $29.01, down $0.33 (1.1%). The chart for URBN looks bullish and deteriorating slightly, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.
What a difference a few hours makes. Earlier today, we were in the process of seeing the stock market take out the lows of October. At that point the buyers ignored the 516,000 jobless claims from this morning and they started hitting their "buy" buttons on their keyboards. The gains came on strong in the afternoon, and most of them late in the afternoon. Here are the unofficial closing bell levels:.gif){kind=logo}
This week, some apparel and accessory producers and retailers offer a look at how they've been doing between early summer's economic stimulus spending and the coming holiday season. While .gif){kind=logo}
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Even with the stimulus checks, retail sales numbers for June and July have been 
The Street.com's Jim Cramer says people have more money in their wallets again, and that can only be positive..gif){kind=logo}
The earnings season continues to roll on, and next week's results offer a peek at the state of fashion retailing, as a variety of companies -- from the discount to the upscale, from the hip to the pedestrian -- are scheduled to report earnings..gif){kind=logo}
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