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Are stocks about to get routed?

Bloomberg News took a recent poll of its subscribers. Here are some highlights of the survey:

  • Only 31% of investors saw investment opportunities in the stock market, down from 35% in the July survey.
  • Worldwide, investors see the U.S. as the weakest link in the world economy. Twenty five percent of respondents see an unemployment rate of 11% in the U.S. next year.
  • Respondents see China and India as the most promising markets and commodities are the asset of choice.
  • Real Estate and bonds are out of favor, with 40% saying that bonds will have the worst returns over the next year.

Continue reading Are stocks about to get routed?

AIG recoups billions in collateral payments

A report in Thursday's The Wall Street Journal [subscription required] reveals that American International Group (NYSE: AIG) is actually reaping the benefits of its risky bets in the credit-default swap market.

AIG was forced to shell out billions to Wall Street banks amid last year's credit crisis, as the assets backed by the credit-default swaps plummeted in value. However, the market's reversal of fortune means that banking heavyweights, such as Goldman Sachs Group (NYSE: GS), are now returning collateral to the infamous insurance giant.

Continue reading AIG recoups billions in collateral payments

Earnings preview: Shorts seem nervous ahead of PepsiCo's 3Q

Snacks-and-soda stalwart PepsiCo, Inc. (NYSE: PEP) is scheduled to unveil its third-quarter results before the market opens this Thursday, Oct. 8. Heading into the report, analysts are expecting PEP to bank a profit of $1.02 per share, according to Thomson Reuters, fractionally lower than its year-ago earnings of $1.06 per share.

PepsiCo has a healthy history in the earnings spotlight, having exceeded Wall Street's consensus expectations in each of the previous three quarters. Judging by recent option activity, traders are speculating on another upside surprise from the Frito-Lay firm.

Continue reading Earnings preview: Shorts seem nervous ahead of PepsiCo's 3Q

Cypress Semiconductor hits multi-year high after earnings

Cypress Semiconductor Corporation (NYSE: CY) joined the parade of companies reporting their latest quarterly results today. The firm swallowed a second-quarter loss of $45.3 million, or 32 cents per share. Excluding items, CY recorded a net loss of just 3 cents per share, besting analysts' consensus expectations for a loss of 9 cents per share. Revenue also came in better than expected, arriving at $155.8 million, compared to Wall Street's forecast of $152.0 million.

In the wake of this upside surprise, CY surged to a new multi-decade high of $9.83 early in today's session. It seems that bearish bettors were caught off-guard by the stronger-than-expected results; during the 10 days leading up to the report, option traders on the International Securities Exchange (ISE) bought to open 6.75 times more puts than calls on CY. Speculative investors on the ISE have purchased the stock's puts over calls at faster pace just 3% of the time.

Continue reading Cypress Semiconductor hits multi-year high after earnings

PNC Financial raises $600 million in capital; investors yawn

PNC Financial Services (NYSE: PNC) reported this morning it raised more than $600 million through an at-the-market offering of 15 million shares launched May 14.

Additionally, PNC said it has no plans to convert its preferred shares, and it expects to redeem the U.S. Treasury's $7.6-billion investment in its preferred shares "as soon as appropriate."

Continue reading PNC Financial raises $600 million in capital; investors yawn

Earnings preview: Low expectations for Autodesk's first quarter

Autodesk, Inc. (NASDAQ: ADSK) is scheduled to release its first-quarter earnings results after the closing bell today. Analysts, on average, are expecting the company to report a profit of 8 cents per share, down sharply from ADSK's profit of 50 cents per share in the year-ago period. Sales for the period are expected to arrive at $419 million.

Thomson First Call reports that the software concern has exceeded Wall Street's consensus earnings estimates in each of the previous four reporting periods, but pessimism is nevertheless running high ahead of tonight's announcement. On Wednesday, traders on the International Securities Exchange (ISE) bought to open 3,607 puts on ADSK, compared to just 84 calls. In other words, bearish bets were nearly 43 times more popular than their bullish counterparts.

The day's skeptically skewed option volume was simply the extension of a recent trend; ADSK boasts a hefty 10-day ISE put/call volume ratio of 9.56, indicating that traders have consistently preferred puts over calls during the two weeks preceding the earnings release. This ratio ranks in the 99th percentile, revealing that pessimistic options on the equity have rarely been in greater demand.

Continue reading Earnings preview: Low expectations for Autodesk's first quarter

DuPont to swallow 2Q charge after cutting 2,000 additional jobs

Dow component DuPont (NYSE: DD) said today that it will eliminate another 2,000 jobs as part of its ongoing plan to cut costs. Previously, the blue chip slashed 2,500 employees and 4,000 contractor positions from its payroll back in December.

The company will take a second-quarter pre-tax restructuring charge of $340 million to $390 million as a result of the job cuts, though DuPont said it will save $225 million by the end of 2010.

The news pressured DD to a loss of 3% within the first hour of today's trading. The stock's pullback could potentially find a floor near its 20-day moving average; in collaboration with its 10-day counterpart, this trendline has guided the shares higher since early March.

Continue reading DuPont to swallow 2Q charge after cutting 2,000 additional jobs

Quarterly profit plummets 98% at Archer Daniels Midland

Agricultural issue Archer Daniels Midland Company (NYSE: ADM) is sharply lower in today's trading after falling short of Wall Street's earnings expectations. The company confessed to a 98% slide in third-quarter net income, thanks to hefty investment losses and a weak pricing environment.

ADM reported a profit of $8 million, or 1 penny per share, compared to its year-ago results of $517 million, or 80 cents per share. Investment losses for the period totaled 36 cents per share. Revenue for the quarter tumbled 21% to $14.8 billion, impacted by strength in the U.S. dollar and softer commodity prices. As a result, gross margin contracted from 6.2% to 4.4%.

Continue reading Quarterly profit plummets 98% at Archer Daniels Midland

Earnings preview: Buffalo Wild Wings could spark a short-squeeze rally

Casual restaurant chain Buffalo Wild Wings (NASDAQ: BWLD) has been on fire this year, with the stock up more than 63% year-to-date. The company could see its positive price action accelerate after its upcoming turn in the earnings spotlight; BWLD is slated to unveil its first-quarter results on Tuesday, April 28, after the close of trading.

Analysts, on average, are expecting BWLD to report a profit of 46 cents per share, up from 36 cents per share in the first quarter of 2008. The company has a mixed history in the earnings confessional: in its previous four reports, the chain has exceeded analysts' estimates twice, met them once, and fallen short on one other occasion.

Continue reading Earnings preview: Buffalo Wild Wings could spark a short-squeeze rally

Shorts hedge their bets on SunPower Corp. ahead of earnings

San Jose-based SunPower Corporation (NASDAQ: SPWRA) is scheduled to report its first-quarter earnings after the market closes this Thursday, April 23. Thomson First Call notes that analysts, on average, are expecting the solar issue to report a profit of 25 cents per share, down from 39 cents per share in the same quarter of 2008.

SPWRA has has an impressive history in the earnings spotlight, having exceeded the Street's profit expectations in each of the previous four reporting periods. Judging by option activity in recent weeks, some investors are betting on the stock to exceed earnings estimates yet again.

Continue reading Shorts hedge their bets on SunPower Corp. ahead of earnings

Will Yahoo! report fresh job cuts along with first-quarter earnings?

Late Tuesday, The New York Times reported that Yahoo! Inc. (NASDAQ: YHOO) is preparing a significant round of layoffs, according to sources close the matter. The sources indicate that several hundred employees could be affected by the upcoming job cuts, which would be YHOO's first under new CEO Carol Bartz.

A Yahoo spokesman declined to comment, but reports indicate that the payroll cuts could be announced next Tuesday, April 21, when the Internet portal is scheduled to release its first-quarter earnings results. Since she first joined the company in January, Ms. Bartz has made it clear that serious restructuring efforts would be necessary to repair Yahoo's struggling business.

Continue reading Will Yahoo! report fresh job cuts along with first-quarter earnings?

Skepticism rises on Excel Maritime Carriers ahead of earnings

Bermuda-based shipping company Excel Maritime Carriers Ltd. (NYSE: EXM) is scheduled to release its fourth-quarter earnings Thursday morning. Ahead of the report, Thomson First Call notes that analysts are expecting a profit of $1.04 per share, down from $1.71 per share in the year-ago quarter. Sales are expected to arrive at $124 million.

Judging by recent option activity, many investors are speculating on an earnings miss for EXM. On the International Securities Exchange (ISE), the stock carries a 10-day put/call volume ratio of 0.66, which ranks higher than 72% of other such readings taken during the past year. In other words, option traders have bought to open the stock's puts at a faster pace only 28% of the time.

Continue reading Skepticism rises on Excel Maritime Carriers ahead of earnings

General Motors announces new joint venture with ... Segway?

Picture this: You're General Motors Corp. (NYSE: GM), and you've fallen on tough times. You've been forced to seek alms from the U.S. government simply to make ends meet. Recently, the Obama administration gave a resounding thumbs-down to your viability plan, and a bankruptcy filing seems increasingly likely. So, how do you try to prove you're still a thriving, relevant corporation? Partner with Segway!

That's right -- in a move that's sure to leave even Steve Wozniak scratching his head, General Motors is teaming up with Segway, Inc., purveyors of the commercially unsuccessful two-wheeled scooter, to create the PUMA (shorthand for Personal Urban Mobility and Accessibility). A prototype of the battery-powered vehicle will hit the streets of Manhattan today, though the PUMA likely won't make its way to the consumer market until 2012.

Continue reading General Motors announces new joint venture with ... Segway?

VMware rallies on Goldman Sachs' bullish endorsement

Tech stock VMware, Inc. (NYSE: VMW) is broadly higher today on the heels of an upbeat note from Goldman Sachs. VMW was added to the brokerage firm's Conviction Buy list, with Goldman noting an expected boost in sales. The firm also thinks that VMW is better-positioned than many of its competitors to ride out the economic recession.

In addition to the Conviction Buy nod, Goldman also hiked its price target on VMW to $29, representing a premium of 22.8% to the equity's Tuesday closing price. The stock could attract additional price-target increases during the short term, as Thomson Reuters pegs its average 12-month target from analysts as $23.31 -- a modest discount to yesterday's close.

Continue reading VMware rallies on Goldman Sachs' bullish endorsement

Tiffany & Co. slips on Peltz's slashed stake

The shares of Tiffany & Co. (NYSE: TIF) are taking a beating today, down nearly 3% at last check. Traders are reacting to news that Trian Fund Management L.P., under the helm of billionaire investor Nelson Peltz, reduced its stake in TIF from 8.5% to 6.9%.

According to a filing with the Securities and Exchange Commission, Trian sold 2.25 million shares on Wednesday and Thursday at prices ranging from $22.58 to $22.61 per share. Now, the fund beneficially owns 8.49 million shares of TIF.

Continue reading Tiffany & Co. slips on Peltz's slashed stake

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Symbol Lookup
IndexesChangePrice
DJIA-38.7010,412.25
NASDAQ-11.482,164.53
S&P 500-2.851,103.39

Last updated: November 24, 2009: 12:13 PM

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