RBC downgraded Canadian Pacific (NYSE: CP) to "sector perform" from "outperform," according toBriefing.com. The news service also reports Morgan Stanley downgraded LDK Solar (NYSE: LDK) to "equal weight" from "overweight."
Novartis (NYSE: NVS) was started as "overweight" at JPMorgan, according to24/7 Wall St. The financial site also reports that Weyerhaeuser (NYSE: WY) was cut to "hold " at Deutsche Bank.
Suntech Power Holdings Co. (NYSE: STP), which saw its stock surge some 150% in 2007, didn't have such a good 2008 so far with its stock plunging about 44% year-to-date. But since setting a 52-week low of $28.19 on March 22, the stock has rebounded nicely, up over 55%. Roller coaster or what?!
Well, today, the maker of photovoltaic cells and modules said first-quarter earnings more than doubled on 76% higher revenue. Earnings reached $55.8 million, or 33 cents an American depositary share, beating analysts estimates of 28 cents. Revenue reached $434.5 million. Gross margins also expanded nicely and Suntech reiterated revenue estimates for 2008.
Early in the morning, STP shares jumped over 7% in premarket trading in response to the report but have not kept this up. Shares are now trading at $45.73, down over 1%, probably declining with the rest of the sector following Goldman Sachs's downgrade of Solarfun (NASDAQ: SOLF) to Sell from Neutral. SOLF shares are down over 18% taking LDK Solar (NYSE: LDK), Trina Solar (NYSE: TSL) and Canadian Solar (NASDAQ: CSIQ) down with it -- 5%, 8% and 13% respectively, to name but a few.
Experience has taught me to respect the price action the day after earnings. So when I see LDK trying to break out of a now 5-month old range, pretty much between $30 and $40 -- yes it was up to $50 in January and $20 in March, but those are outliers -- this is a very bearish sign. It's so bearish that I suspect that unless solar plays really heat up again, this stock will need many more weeks or months to break $40, and even then, it's got a ton of resistance all over the place due to bitter buyers in at much higher prices who will be looking to cut their losses.
Staples (NASDAQ: SPLS) stepped up its hostile campaign to acquire Dutch office supplies group Corporate Express (NYSE: CXP), lifting its offer to 8 euros ($12.43) a share, up from 7.25 euros previously and taking its bid directly to shareholders. CXP shares were 6% higher.
In its attempt to shore up its balance sheet, American International Group Inc. (NYSE: AIG) priced an offering of 171.1 million common shares at $38, valuing the deal at $6.5 billion. On Monday AIG also said it priced an offering of 72 million equity units at $75 each, a deal value of $5.4 billion.
LDK Solar Co. Ltd. (NYSE: LDK) shares are down over 6% in premarket trading after the Chinese solar energy company reported first-quarter results late Monday. While earnings topped forecasts and the company raised its revenue outlook for the year, raw material costs caused it to cut its gross margin forecast.
Sirius Satellite Radio Inc. (NASDAQ: SIRI) also reported results after closing bell Monday. While the results are important, they don't have the weight they would had the Street not expected Sirius to complete the purchase of larger rival XM Satellite Radio Holdings Inc. (NASDAQ: XMSR). Both companies reported more losses, although Sirius narrowed its loss, while at XM, the loss increased. This may be the reason why StreetInsider says that Merrill Lynch upgraded Sirius from Sell to Neutral. Interestingly, though, XM shares climbed Monday following its results, while SIRI shares are down in premarket trading following its.
Morgan Stanley (NYSE: MS) raised $4 billion for a fund that invests in infrastructure projects, far exceeding the $2.5 billion target it has set. Other than ports, roads and parking lots, governments are spending more and more on infrastructure, especially water, electricity and telecommunications, and funds for such undertakings are greatly required.
Research In Motion (NASDAQ: RIMM) today introduced the BlackBerry Bold smartphone. While it was hailed an iPhone killer by some, the company continues to position the BlackBerry as a smartphone for business and heavy users, rather than try to cut into Apple's consumer market. According to RIM's statement, "the BlackBerry Bold is designed to give business professionals and power users unprecedented functionality and performance in an intuitive BlackBerry smartphone. It is the first BlackBerry smartphone to support tri-band HSDPA high-speed networks around the world and comes with integrated GPS and Wi-Fi, as well as a rich set of multimedia capabilities." If you wondered, the QWERTY keyboard is still there, but its most amazing feature is apparently the display. While RIMM is up 1.6% in premarket trading, some think it's in for a bruising.
And meanwhile, of course, Apple Inc. (NASDAQ: AAPL) is continuing its push to bring the iPhone worldwide. Singapore Telecommunications Ltd said it and its mobile associates -- Bharti Airtel Ltd, Globe Telecom Inc and Australian unit Optus -- will bring the iPhone to Singapore, India, Australia and the Philippines later this year as they had signed the agreement with Apple. As for the 3G iPhone, it may launch when Steve Jobs gives his keynote address on June 9, the first day of the 2008 World Wide Developers conference. While no announcement was made, Fortune has confirmed the date of the keynote with Apple public relations.
D. R. Horton (NYSE: DHI) shares are down over 6% in premarket trading after the homebuilder has swung to a loss for its fiscal second quarter of $1.31 billion, or $4.14 per share. With the continued housing slump, the company took hefty charges to write down the value of its inventory. Revenue plunged to $1.62 billion from $2.62 billion a year ago.
Fannie Mae (NYSE: FNM) shares are slumping over 9% this morning after the mortgage lender said it lost $2.2 billion or $2.57 a share in the first quarter due to mounting home-loan delinquencies as the housing slump continued. The results were below, far below that of estimates.
Vodafone Group (NYSE: VOD) said Tuesday that it's signed an agreement with Apple Inc. (NASDAQ: AAPL) to sell the iPhone in ten of its markets including Australia, the Czech Republic, Italy and India.
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.
Tragically, America's publicly-traded companies are hardly bastions of transparency and good corporate governance, but the problem is even worse in China.
A study by RateFinancials reported in Barron's (subscription required) found that on measures like quality of earnings, accounting, and corporate governance, Chinese companies are lacking.
Many Chinese companies listed on U.S. exchanges are tightly-held and have complex structures -- two serious red flags. They also don't have to file proxy statements, and often have the roles of chairman and CEO are filled by one person. There are also questions about the independence of the boards, related-party transactions, and so on.
What can investors do? Few would dispute that most people should have some exposure to foreign companies, and your best is to either buy an index fund or hand your money to a reputable mutual fund manager who has the resources to kick the tires on prospective investments in faraway lands.
If you think you have access to enough information/knowledge to perform proper due diligence on a company like LDK Solar (NYSE: LDK), I think you're kidding yourself.
MOST NOTEWORTHY: Airline stocks, LDK Solar and AU Optronics were today's noteworthy upgrades:
UBS upgraded legacy airline stocks based on the recent pullback in the group. The firm upgraded Continental Airlines (NYSE: CAL) and Delta (NYSE: DAL) to Buy from Neutral and AMR Corp. (NYSE: AMR) to Neutral from Sell.
CIBC upgraded shares of LDK Solar (NYSE: LDK) to Sector Performer from Sector Underperformer following a meeting with management as they have greater visibility on polysilicon supply for 2008 as well as comfort that average sales price declines will be lower than previously expected in 2009.
Lehman upgraded shares of AU Optronics (NYSE: AUO) to Overweight from Equal Weight after raising the Asia Display industry to Positive from Neutral.
OTHER UPGRADES:
Repsol SA (NYSE: REP) was upgraded to Equal Weight from Underweight.
Jefferies raised its rating on Shutterfly (NASDAQ: SFLY) to Buy from Hold.
Baird upgraded Shire Plc (NASDAQ: SHPGY) to Outperform from Neutral.
UBS upgraded airliners including AMR Corp. (NYSE: AMR) from Sell to Neutral, Continental Air (NYSE: CAL), Delta Airlines (NYSE: DAL), UAL Corp. (NASDAQ: UAUA) and US Airways (NYSE: LCC) from Neutral to Buy. Delta was also upgraded by Bear Stearns from Peer Perform to Outperform. Most of these are gaining 3-5% in premarket trading.
Other notable calls include:
LDK Solar (NYSE: LDK) was upgraded from Sector Underperform to Sector Perform at CIBC World Marktes. Shares are up 5% in premarket trading.
Garmin (NASDAQ: GRMN) was downgraded by Deutsche Securities from Buy to Hold and the target price lowered from $125 to $90. Down 3% in premarket.
In addition to reaching an agreement with the EU today regarding its prices on iTunes downloads, Apple Inc. (NASDAQ: AAPL) Bloomberg reports that Apple will announce a new service on Jan 15 where iTunes users will now be able to rent movies for 24 hours for $3.99 as well as buy them. Apple will add News Corp. (NYSE: NWS) Fox and Time Warner (NYSE: TWX)'s Warner Bros. as suppliers, "according to people familiar with the agreements." Viacom Inc. (NYSE: VIA)'s Paramount, Walt Disney Co. (NYSE: DIS) and Lions Gate Entertainment Corp. (NYSE: LGF) will also be part of the agreement.
"I can't believe I won," cried Jordin Sparks, winner of last year's American Idol. Within seconds, industry and non-industry drones alike began formulating ways to attach themselves to her in some way, crazy in anticipation of the inevitable riches.
Months later, several Wall Street types were overheard saying, "I can't believe oil keeps going higher, alternative energy stocks are going to be hot, hot, hot," and thousands of investors went wild buying shares of the dozen or so solar stocks, crazy in anticipation of the inevitable riches.
Each industry has its stars: Kelly Clarkson, Carrie Underwood and Clay Aiken -- as determined by album sales -- for American Idol, First Solar (NASDAQ: FSLR), Sunpower (NASDAQ: SPWR) and MEMC Electronic Materials (NYSE: WFR) -- as determined by stock performance -- for the solar industry.
LDK Solar Co. (NYSE: LDK) is one strange solar stock. Yesterday, on a day when other solar companies like Solarfun Power Holdings (NASDAQ: SOLF), Canadian Solar Inc (NASDAQ: CSIQ), First Solar Inc (NASDAQ: FSLR) and JA Solar Holdings (NASDAQ: JASO) were all strong and despite earnings coming in at the high end of expectations and guidance solidly ahead of estimates, their stock was down. Not only was it down, but it also tried rebounding, only to fail. Not good at all for the bull case. 
Before the bell: Futures lower after WMT earnings, ahead of data
Before the bell: Futures higher as oil retreats, dollar strengthens
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MOST NOTEWORTHY: Airline stocks, LDK Solar and AU Optronics were today's noteworthy upgrades:
"I can't believe I won," cried Jordin Sparks, winner of last year's American Idol. Within seconds, industry and non-industry drones alike began formulating ways to attach themselves to her in some way, crazy in anticipation of the inevitable riches.
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