If you were looking for help from the economic front or from the oil patch today to help out the market, that wasn't in the cards. Home prices plunged by a record 15.3% from may 2007 to May 2008. Consumer confidence also came in at a 16-year low. From bottom to top to bottom we had more than a 150 point trading range in the DJIA today. These are the unofficial closing levels:
Eastman Kodak Co. (NYSE: EK) saw a sharp rise with shares up 15% at $4.20 late in the day after the company announced a large IRS refund and a $1 billion buyback to retire close to half of its stock.
Eli Lilly & Co. (NYSE: LLY) hit the 52-week low list and a multi-year low earlier today before recovering list after the FDA delayed a decision on its anti-clot blood thinning drug, with shares down some 1.5% at $46.87 in the final minutes today.
Kroger Co. (NYSE: KR) saw shares rise a sharp 7% with shares at $27.88 in the final minutes today after the company raised guidance.
Reliance Steel (NYSE: RS) saw shares up after the company raised its own guidance again. Its shares were only up 0.5% at $73.85 in the final minutes of the trading day. Shares were up over 5% at the start.
United Parcel Service Inc. (NYSE: UPS) saw a drop after the company came clean and fessed up that high fuel prices and low demand for premium delivery services were hurting business domestically and abroad. Shares were down 6% at $62.26 late in the day.
EK's Board of Directors authorized a stock repurchase of as much as $1 billion, representing 25% of the shares outstanding. EK also announced it received a tax refund from the U.S. Internal Revenue Service of $581 million.
EK call option volume of 29,104 contracts compares to put volume of 2,712 contracts. EK July option implied volatility of 50 is above its 26-week average of 45 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Shares of the top maker of photographic film, Eastman Kodak Co. (NYSE: EK), have been tumbling in morning trading after putting up less than impressive earnings.
The company was not able to come in above analyst estimates, despite the fact that its loss narrowed to $115 million, or 40 cents a share in the first-quarter. Compared to its first period last year, its quarterly numbers showed a nice rebound, as the company reported a much higher loss of 53 cents a share last year.The photography products maker improved its performance on digital photography products and services, but this was not enough to offset higher silver and aluminum cost and increased spending on its inkjet printer business.
Going into today's earnings report Wall Street had been looking to see the company show Q1 loss of 3 cents a share. Excluding one-time items, the company stated that it loss came in at 39 cents a share, far more than the loss that analysts predicted. So with the actual numbers, Eastman Kodak is looking for a pretty bad day in today's session.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
Rochester, New York-based Eastman Kodak Co. (NYSE: EK) was founded in 1892, and is well known for its wide range of photographic film products; it remains to this day the largest supplier of photographic films in the world. The company played a vital role in the invention and development of the motion picture industry, setting the standard of 35 mm film.
But times change. In 1999, Kodak entered into the consumer inkjet photo printers market in a joint venture with manufacturer Lexmark (NYSE: LXK). In 2004, Kodak announced it would stop producing traditional film cameras, beginning a multiyear struggle to refocus on digital photography and printing. Some of the results of that effort include the Kodak Smart Picture Frame, into which digital files are downloadable via a network connection. The Kodak Gallery is a website where users can upload photos into albums, print them out, and create mouse pads, calendars, and the like. And in 2006 Kodak announced that Flextronics (NASDAQ: FLEX) would manufacture and help design its digital cameras. Kodak also has long-term plans to sell ink jet printers and flat-panel displays.
After hitting a one-year high of $30.20 in June, the stock hit a one-year low of $16.66 last week. This morning, EK opened at $20.54. So far today the stock has hit a low of $19.85 and a high of $20.91. As of 11:05, EK is trading at $19.88, down $0.57 (-2.8%). The chart for EK looks bearish but improving slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bearish hedged play on this stock, I would consider a March bear-call credit spread above the $22.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in 2 months as long as EK is below 22.50 at March expiration. Kodak would have to rise by more than 15% before we would start to lose money.
Merck & Co. (NYSE: MRK) shares are gaining 1% in premarket trading after it posted a $1.6 billion loss in the fourth quarter due to large charges for its Vioxx litigation settlement and other items dragged down results. While Net loss amounted to 75 cents per share, fourth-quarter charges totaled $3.4 billion, or $1.55 per share. Excluding the one-time earnings, net income would have been 80 cents per share, beating the expected 74 cents earnings per share. Revenues were up 3% to $6.24 billion, slightly less than the estimated $6.3 billion. Merck also lowered its full-year 2008 forecast.
Boeing Co. (NYSE: BA) reported a fourth-quarter profit rise of 4% $1.03 billion, or $1.36 per share on higher commercial airplane deliveries and strong growth in defense earnings, beating Wall Street's expectations of $1.32 per share despite ongoing concerns over delays in its 787 Dreamliner program. Boeing also increased its guidance for 2008 earnings, citing productivity improvements.
Also reporting today: Kraft Foods (NASDAQ: KFT) is expected to post earnings of 44 cents a share in the fourth quarter. United Parcel Service Inc. (NYSE: UPS) is expected to report fourth-quarter earnings of $1.13 a share. Eastman Kodak Co. (NYSE: EK) is expected to report earnings of 52 cents a share in the fourth quarter. Kellogg Co. (NYSE: K) is expected to post earnings of 44 cents a share in the fourth quarter.
Merrill Lynch & Co Inc (NYSE: MER), under intense pressure from billions of dollars of mortgage write-downs may get about a $5B capital investment from Temasek Holdings, a Singapore state-owned investment firm, the Wall Street Journal reported.
The WSJ also reported that the SEC is investigating how Washington Mutual Incorporated (NYSE: WM) handled and reported on mortgage loans which may have been based on inflated home appraisals.
WEB SITES:
BusinessWeek's "Inside Wall Street," Eastman Kodak Company (NYSE: EK) is looking to transform from a pariah on the Street into success. The number one photography company has been restructuring since 2003, and analysts expect to see strong profitability and cash flow in 2008.
Aldabra 2 Acquisition Corp (AMEX: AII) may be another success story, BusinessWeek's "Inside Wall Street" noted, particularly if it gets a boost in output and "possible listing on the Big Board."
Analysts are bullish on Inspire Pharmaceuticals Inc (NASDAQ: ISPH), BusinessWeek's "Inside Wall Street" reported, which has conjunctivitis drug AzaSite on the market and several drugs in its pipeline. AzaSite sales are expected to come in around $45M next year, but the company could grow further with its cystic fibrosis drug Denufosol, now in phase III trials.
In an effort to get some kind of public recognition of its Firedog installation and help-desk services, consumer electronics retailer Circuit City Stores, Inc. (NYSE: CC) and Eastman Kodak Co. (NYSE: EK) have partnered to find the most lovable pooch possible to star in the retailers' Firedog ads.
Firedog was basically a response to competitor Best Buy, Inc.'s (NYSE: BBY) Geek Squad services, which will perform all kinds of computer services in-store or on location at a customer's home.
In proper marketing fashion, Chief Marketing Officer for Circuit City, Peter Weedfald, stated that "We're looking for a dog that represents the personality of Firedog: fun, professional, loyal, quick and intelligent." Loyal, quick and intelligent are good qualities to look for in a canine. But professional?
While Circuit City searches high and low for the pooch in a business suit, Kodak is sharing the stage by pointing out that Americans who love to photograph their pets should consider using its EasyShare all-in-one printers.
Never mind that this dog and pony show says nothing about the quality, costs or types of services Circuit City's Firedog offerings will provide. Something about a smiling dog gets the American public all warm and fuzzy, and presumably more likely to rush out and buy new printers.
You too? Go ahead and bite. We know your dog is the cutest of them all. Visit this website and submit your doggy submissions until December 8, 2007. If your pet has that winning doggy style, Circuit City and Kokak will make a $50,000 donation to a local humane society of your choice.
U.S. stock futures were lower, indicating a similar start for stocks as as surging oil prices took some of the optimism that coursed throughout the markets following yesterday's Federal Reserve's quarter point rate cut to 4.5%
Yesterday, U.S. stocks ended with big gains following the Fed's decision. Interestingly, stocks first declined following the policy statement announcement only to jump about an hour after it. The Dow industrials rose 137 points, or 1%, the S&P 500 18 points, or 1.2% and the Nasdaq Composite 42 points, or 1.5%.
Already yesterday in after-hours trading oil jumped above $95 a barrel and today rose to a new record above $96 a barrel. While the rate cut may have contributed to this surge in oil prices (through a lower dollar, which indeed reached yet another all-time low against the euro), many trader were also surprised by a drop in U.S. crude stockpiles which raised concerns about supplies for coming winter demand. Other energy futures also gained.
When a new technology is offered to investors, the cautious in the crowd tend to stand back and await developments. When established firms begin to use that technology, it's time to pay close attention. There is an outfit in Ewing, New Jersey, that has been a pioneer in the commercialization of a special kind of light emitting diode. Now, some of the big consumer electronics players are beginning to show a serious interest.
Universal Display Corporation (NASDAQ: PANL) develops and commercializes organic light emitting diode (OLED) technologies and materials for use in flat panel displays, solid-state lighting products, cellphones and other opto-electronic devices. OLED screens use organic semiconductor materials to sharpen image and color quality. The company licenses its technology to makers of televisions, computer screens, and consumer electronics devices. It has strategic relationships with such technology leaders as Sony Corporation (NYSE: SNE). Eastman Kodak (NYSE: EK) is a major competitor.
The stock has been a steady gainer over the past month, in response to such issues as word from Sony and Toshiba that they will begin commercial production of OLED televisions. Analysts remarked favorably on Universal Display's prospects in the matter. The company has been working with Sony to develop OLED sets since 2001, and customer LG. Philips LCD (NYSE: LPL) sells panels to Toshiba. Shares are advancing through a positive trading channel. The price is currently consolidating at the base of that channel, suggesting the potential for a turn back toward the top.
Brokers recommend the issue with three "strong buys," two "buys" and two "holds." Analysts see a 44 percent growth rate through the next year. The PANL Price to Tangible Book ratio (7.61) compares favorably with industry, sector and S&P 500 averages. Institutions hold about 48 percent of the outstanding shares. Over the past 52 weeks, the stock has traded between $11.00 and $19.66. A stop-loss of $15.75 looks good here. Note that the company is next expected to report quarterly results in early November.
As Brent Archer recently wrote, Eastman Kodak (NYSE: EK) has been one of the most visible sponsors of the Olympic games for years, but it's a partnership that's coming to an end. After the Beijing games in 2008, Kodak will no longer pay the $50 million plus per Olympiad to be the official film and imaging sponsor.
Shares of Kodak have been terrible performers over the past decade as the company faces increased competition in the digital age. The Street appears to approve of dropping the Olympics, and the stock was up more than 5% on the news.
And maybe it is a sensible cost-cutting move -- cost-cutting moves nearly always send a company's share price up. Movie Gallery (NASDAQ: MOVI) soared last month after the rental-chain announced it was closing 13% of its stores, only to tank when bankruptcy rumors emerged on Friday.
Eastman Kodak Co. (NYSE: EK) announced this morning that it will end its Olympic sponsorship following the 2008 Summer Games in Beijing, as they reassess their marketing and attempt to move in a new direction. EK is moving significantly higher today on this news and not much else, so it looks like investors are happy with this move. 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 EK.
After hitting a one-year high of $30.20 in June, the stock has up and down sharply within a $2-dollar range over the past three months. EK opened this morning at $27.24. So far today the stock has hit a low of $27.18 and a high of $28.44. As of 10:45, EK is trading at $28.20, up $1.16 (4.3%). The chart for EK looks neutral but improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $25 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in just 5 weeks as long as EK is above $25 at November expiration. Kodak would have to fall by more than 11% before we would start to lose money.
EK hasn't been below $25 since June and has shown support around $27 recently. This trade could be risky if the company's earnings (due out on 11/1) disappoint, but even if that happens, this position could be protected by strong support between $25 and $27, where EK has bottomed throughout the past three months. Brent Archer is an options analyst and writer at Investors Observer.
Hewlett-Packard (NYSE: HPQ) has introduced another technology that demonstrates why the company often out-flanks rivals. The new product, which is free, allows mobile PC users to print documents on almost any printer. According toThe New York Times, the system is called "Cloudprint".
The feature uses server-based software run on hardware owned and operated by HP. The Times writes that :"The service requires users to first "print" their documents to H.P. servers connected to the Internet. The system then assigns them a document code, and transmits that code to a cellphone, making it possible to retrieve and print the documents from any location." HP hopes the service will drive printer and ink sales.
HP's printing and imaging group is critical to the company's success. According to the HP 10-Q, the division represents 27% of the company's annual revenue and will do almost $30 billion this year. The operation competes with Lexmark (NYSE: LXK), Canon (NYSE: CAJ), and Kodak (NYSE: EK) for market share in the huge global printer market.
The HP initiative is an example of how the company's innovation prowess is keeping it ahead of its competition, but it is also a sign that server-based applications are growing in importance. Google (NASDAQ: GOOG) is offering several server-based products including its document and spreadsheet products. The move is seen as a challenge to Microsoft (NASDAQ: MSFT) which creates software the works primarily on individual PCs.
HPQ shares are up 80% over the last two years. but the company is not waiting for the competition to catch its breath.
It is almost impossible to call the market these days with its high volatility nature. Right now, however, stock futures are positive (already reversing direction once this morning), indicating a possible similar start for U.S. stocks.
Lingering concerns over the housing and credit market and their possible affect on the economy and corporate profits caused the choppy session we've seen yesterday. It seems though that in the final hour of trade buyers came looking for bargains and the Dow industrials rallied adding more than 150 points in the final hour. The S&P 500 rose 10.5 points or 0.7% and the Nasdaq Composite added 7.6 points or 0.3%.
Today, stocks are likely to remain turbulent without much economic data and few companies reporting earning on the docket to help change sentiment decisively one way or the other.
Already Nokia Corp.'s (NYSE: NOK) had boosted the market this morning after posting better-than-expected quarterly profits. Nokia reported that earnings per share rose to €0.32, easily topping analyst expectations of €0.25 on strong cellphone demand in emerging markets. NOK shares are gaining over 7% in premarket trading.
However, at 8:30 a.m., weekly reading of jobless claims could stir the market once again, but more so perhaps June factory orders data due out at 10:00 a.m. EDT. Economists expect a 1% gain after a 0.5% decline in May.
Overseas, Asian markets ended mostly higher and European stocks are also advancing with banks, especially Societe Generale leading the way. Once reported earnings, Nokia and Unilever also helped the rally. Both the European Central Bank and the Bank of England held rates today.
Other corporate news:
Mattel Inc (NYSE: MAT) said it expected the impact of recalls of Chinese-made toys due to lead to be about $30 million.
Reporting today are Viacom (NYSE: VIA) and Eastman Kodak (NYSE: EK).
Yesterday, Walt Disney Co. (NYSE: DIS) reported results that beat estimates as it showed strong performance at its TV networks and theme parks.
Starbucks Corp. (NASDAQ: SBUX) also reported after the close yesterday profits that rose less than 1% amidst plans to open another 1,700 new U.S. locations in the next year. Shares gaining 2.2% in premarket.
Kodak 
Shares of the top maker of photographic film, 
This post is part of our 
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In an effort to get some kind of public recognition of its Firedog installation and help-desk services, consumer electronics retailer 
that they will begin commercial production of OLED televisions. Analysts remarked favorably on Universal Display's prospects in the matter. The company has been working with Sony to develop OLED sets since 2001, and customer 
As Brent Archer 
It is almost impossible to call the market these days with its high volatility nature. Right now, however, stock futures are positive (already reversing direction once this morning), indicating a possible similar start for U.S. stocks.
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