Today is the day. Today Apple Inc.(NASDAQ: AAPL)'s new 3G iPhone went on sale. Many countries will now be able to join the iPhone mania, selling the handset to eagerly awaiting customers. Most notably, Japan,Australia and Hong Kong are part of the 22 nations rollout.
Anheuser-Busch (NYSE: BUD) shares are surging 4% in premarket trading after The New York Times reported deal with InBev is now near. Not only that, but it seems the talks are of a friendly deal. This is quite a change from the recent law suits between the two after A-B rejected the Belgian brewer's $46 billion, or $65-a-share, takeover offer.
Shares of MasterCard (NYSE: MA) are rising 3.5% in premarket trading on news that the company will be added to the S&P 500 Index on July 17 in place of ACE Ltd. (NYSE: ACE). Shares of ACE are down over 5%.
With a slowdown in the U.S. economy, the Las Vegas economic expansion has come to a halt. With people unable to pay for a gallon of gas, it comes as no surprise that they are not in the mood to go gamble. The Independent of the UK had a fascinating article about how Las Vegas is suffering with the slow economy.
According to the report: "With Americans cutting back on luxuries, and the price of transport rocketing, the so-called 'Vegas vacation' is facing the axe. This week, as the nation celebrated Independence Day, major hotels were taking stock of a fall in all-important room occupancy rates from their usually impressive 95 per cent levels to nearer 80 per cent."
Gambling revenues have also slipped 3%. Attendance at conventions, a big contributor to the city's coffers has dropped by more than 7%.
All an investor has to do to see how bad the carnage has been is to check some stocks related to the Las Vegas gambling and tourist industry. Las Vegas Sands (NYSE: LVS) has gone in the last 52 weeks from more than $148/share down to around $39, a drop of more than 70%. Ouch. MGM Mirage (NYSE: MGM) has dropped from more than $100/share to under $30.
As the economy continues to sputter, look for more trouble ahead for Las Vegas. On the other hand, contrarian investors may look at an uptick in the U.S. economy, whenever it happens, as a signal to potentially look at stocks that are associated with Las Vegas.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/6/08.
MOST NOTEWORTHY: Alcoa, Publicis Groupe and Fresenius were today's noteworthy downgrades:
JP Morgan downgraded shares of Alcoa (NYSE: AA) to Neutral from Overweight as they do not believe the company is a takeover target. The firm thinks investors could be disappointed with the new CEO's strategic direction as well as near-term earnings.
Societe Generale cut Publicis (OTC: PUBGY) to Sell from Buy on valuation following the recent rally and macroeconomic concerns.
UBS downgraded Fresenius (NYSE: FMS) to Neutral from Buy citing valuation, but added shares to its Short-Term Buy list citing potential upward EPS revisions when the company reports on July 3.
While many know that Bill Gates and Warren Buffet are the two wealthiest, Tony Sagami notes that few know the third: Sheldon Adelson. In his Asia Stock Alert, he explains, "Adelson is the founder and CEO of Las Vegas Sands (NYSE: LVS), our latest featured stock." Here, he looks at the gaming company and its bright prospects in Macau.
"Due to its strategic location in the South China Sea, Macau has a rich history as an Asian trading hub. To this day, it looks more European than Asian. And its popularity with tourists is absolutely exploding - an estimated 27 million visited Macau last year.
"The majority (55%) came from mainland China, but many more visited from Hong Kong (30%) and Taiwan (9%). These tourists are flocking to Macau not because of its history or picturesque seaside location. They're coming to gamble.
"And boy, did they gamble! On my last visit to Macau, I saw table after table filled with boisterous high rollers routinely making $100,000 bets. These 'whales' account for about 80% of Macau's gambling revenues.
"Today, Macau has become the Las Vegas of China. It is the only city in the region with fully legalized gambling. And gambling is deeply engrained in the Asian culture. Plus, Macau is within a five-hour flight of three billion people - nearly half the world's population.
Merrill Lynch downgraded Garmin (NASDAQ:GRMN) to "neutral" from "buy" according toBriefing.com. The news service also reports that Oppenheimer downgraded First Solar (NASDAQ:FSLR) to "perform" from "out perform."
Jefferies & Co reaffirmed its "buy" rating on Las Vegas Sands (NYSE:LVS) after the company posted earnings according to the AP.
Douglas A. McIntyre is an editor at 247wallst.com.
After hitting a one-year low of $85.53 in June, the stock hit a one-year high of $176.14 in October. WYNN opened this morning at $95.81. So far today the stock has hit a low of $95.60 and a high of $106.96. As of 12:15, WYNN is trading at $101.55, up $6.01 (6.3%). The chart for WYNN looks neutral and deteriorating, while S&P gives the stock a bearish 2 Stars (out of 5) Sell rating.
For a bullish hedged play on this stock, I would consider a June bull-put credit spread below the $75 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 9.9% return in just two months as long as WYNN is above $75 at June expiration. Wynn would have to fall by more than 26% before we would start to lose money. Learn more about this type of trade here.
The financial media -- envious of the fat profits generated by such entertainment-based businesses as World Wrestling Entertainment Inc (NYSE: WWE), Las Vegas Sands Corp. (NYSE: LVS) and Wynn Resorts (NASDAQ: WYNN) -- has brainwashed you into believing that in order to make money in the stock market, you must keep up to date with every single headline and development in the business world. Hogwash!
I have no problem with financial entertainment, but I do take issue with all these media outlets making their content out to be useful to investors. I've repeatedly echoed this theme in articles like this and I don't expect this industry to change anytime soon, but I am going to keep preaching so you will better understand how low your chances of success are if you bet on the most popular -- hence the most efficient -- topics du jour. Unless you are George Soros or Warren Buffett or a few other wealthy elderly men, there is always somebody better informed and more intelligent than you are. Hence, you are always at a disadvantage.
Las Vegas Sands Corp. (NYSE: LVS) stock is falling with the rest of the market this morning as investors, following the JP Morgan Chase (NYSE: JPM) buyout of Bear Stearns (NYSE: BSC) on the cheap, are fearing that other banks have sizable exposure to troubled credit markets, which poses a high amount of risk to an already lagging economy. A struggling US economy would cut into LVS revenues in their domestic properties. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on LVS.
After hitting a one-year high of $148.76 in October, the stock hit a one-year low of $70.70 in January. This morning, LVS opened at $72.00. So far today the stock has hit a low of $70.00 and a high of $73.50. As of 1:55, LVS is trading at $71.12, down $3.70 (-4.9%). The chart for LVS looks bearish and steady, while S&P gives the stock a negative 2 STARS (out of 5) sell rating.
For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $100 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 a 6.4% return in three months as long as LVS is below $100 at June expiration. LVS would have to rise by more than 40% before we would start to lose money. Learn more about this type of trade here.
LVS hasn't been above $100 since the New Year and has shown resistance around $80 recently. This trade could be risky if the US economy turns itself around, but even if that happens, this position could be protected by resistance LVS might find at its 200 day moving average, which is currently around $100. Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in LVS.
Las Vegas Sands Corp. (NYSE: LVS) shares are trading higher today, even though the company reported an adjusted fourth-quarter profit of $71.1 million, or 20 cents per share, well below analyst estimates of 35 cents per share. The company blamed high construction costs on multiple new resorts for the lower earnings. However, its Las Vegas Strip model of casino-resorts is paying off in Macau, as revenues at its Macau resort increased 46% over the previous year to $10.3 billion in 2007.
Due to the fact that LVS sank 7% yesterday on a profit warning from an industry analyst, investors see this morning's earnings as not so bad. Plus, they see something to be excited about in the Macau resort's performance, judging by this morning's jump in stock price. 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 LVS.
After hitting a one-year high of $148.76 in October, the stock hit a one-year low of $70.70 last month. LVS opened this morning at $84.74. So far today the stock has hit a low of $84.74 and a high of $90.19. As of 11:05, LVS is trading at $88.61, up $7.16 (8.8%). The chart for LVS looks bearish and steady, while S&P gives the stock a negative 2 STARS (out of 5) sell rating.
Las Vegas Sands (NYSE: LVS) opened the company's new $1.9 billion resort.
The Palazzo Las Vegas is the first hotel to open on the Las Vegas Strip in nearly three years.
LVS closed at $74.46. LVS February option implied volatility of 67 is above its 26-week average of 49 according to Track Data, suggesting larger price fluctuations.
Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Las Vegas Sands Corp. (NYSE: LVS) shares opened higher this morning on a New York Times story noting how gambling revenues for Las Vegas casinos are high this year, and "way up" in the past few weeks. The story cites casinos catering to affluent customers and foreign customers from countries with strong currencies as major reasons for the gambling boom this year. LVS stock is in the red now, but that move could be attributed to investors who bought the stock at its highs selling their positions to get the tax-loss this year. 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 LVS.
After hitting a one-year low of $71.24 in June, the stock hit a one-year high of $148.76 in October. LVS opened this morning at $107.85. So far today the stock has hit a low of $107.02 and a high of $110.45. As of 11:25, LVS is trading at $107.05, down $0.87 (-0.8%). The chart for LVS looks bearish and steady, while S&P gives the stock a negative 2 STARS (out of 5) sell rating.
MOST NOTEWORTHY: British American Tobacco, Covad Communications, Pacific Capital, Volcom and American Medical Systems were today's noteworthy downgrades:
Covad Communications (NYSE: DVW) was lowered to Hold from Buy at Jefferies. The firm downgraded shares after Platinum Equity Holdings agreed to acquire the company.
Keefe Bruyette downgraded Pacific Capital Bancorp (NASDAQ: PCBC) to Market Perform from Outperform following its Q3 credit loss pre-announcement.
ThinkEquity reduced Volcom (NASDAQ: VLCM) to Accumulate from Buy following its reduced guidance.
American Medical Systems (NASDAQ: AMMD) was downgraded to Market Perform from Outperform at Raymond James and at Piper Jaffray. Piper downgraded shares following the lower-than-expected Q3 results. Shares were also downgraded to Hold from Buy at Stifel following the weak Q3 report.
OTHER DOWNGRADES:
Citigroup downgraded Mechel OAO (NYSE: MTL) to Hold from Buy.
Las Vegas Sands (NYSE: LVS), a leading international developer of multi-use integrated resorts operated by Sheldon Adelson, is recently down $10.62 to $133.97.
Morgan Stanley said that preliminary Macau gaming revenues are up 55% YoY versus its estimate for 70% and below the Street's estimates.
LVS October option implied volatility of 57 is above its 26-week average of 41 according to Track Data, suggesting larger price fluctuations.
Before the bell: Futures lower on oil, Fannie and Freddie; GE meets
With a slowdown in the U.S. economy, the Las Vegas economic expansion has come to a halt. With people unable to pay for a gallon of gas, it comes as no surprise that they are not in the mood to go gamble. The Independent of the UK had a fascinating article about how 
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