Today was another one of those days where one could feel like the Duke Brothers from Trading Places. It was just another down day, yet the pain seemed to capture everything and everyone. The reasons markets are hurting are all the same as they have been, but such is life and expanding the TARP bailout money isn't helping.
American Express Co. (NYSE: AXP) fell again after negative headlines that it supposedly wants $3.5 billion in TARP funds. Although these are much of the same concerns as yesterday since becoming a bank holding company. Shares were down over 10% at $19.99 right before the close.
Las Vegas Sands (NYSE: LVS) got to see insult added to injury. Moody's cut its debt ratings further into junk status. Shares were down more than another 5% at $5.03 right before the close.
Baird upgraded Bank of America (NYSE: BAC) to Outperform from Neutral citing valuation and long-term earnings power.
Keefe Bruyette upgraded shares of Nationwide Financial (NYSE: NFS) to Outperform from Market Perform as it believes the deal is not at risk and will close at the agreed upon $52.25 price.
Friedman Billings upgraded American Eagle (NYSE: AEO) to Outperform from Market Perform citing valuation.
Eli Lilly (NYSE: LLY) was upgraded to Hold from Sell at Natixis.
W.W. Grainger (NYSE: GWW) was upgraded to Outperform from Neutral at RW Baird.
Fidelity National (NYSE: FIS) was upgraded to Buy from Neutral at SunTrust.
Analyst downgrades:
Credit Suisse downgraded Eli Lilly NYSE:(LLY) to Neutral from Outperform citing the increased risk profile from the ImClone (IMCL) deal.
Soleil downgraded Google (NASDAQ:GOOG) to Hold from Buy as it believes Google's cost management may lag revenue weakness and that the falling stock price implies employee defections. The firm lowered its target to $350 from $580.
Piper downgraded shares of Orbitz (NYSE:OWW) to Sell from Neutral to reflect deteriorating travel industry fundamentals and the company's levered balance sheet.
US Steel (NYSE:X) was downgraded to Neutral from Buy at Goldman.
Bidz.com (NASDAQ:BIDZ) was initiated with a Hold at Stamford, as the firm does not want to recommend a company that has never been tested during difficult economic times, but is positive on BIDZ's growth potential.
American Superconductor (NASDAQ:AMSC) was initiated with a Hold at Stanford, as the firm believes the Euro decline and global market turmoil are near-term risks.
Union Bankshares (NASDAQ:UBSH) was initiated with an Underperform at RBC Capital, as the firm views shares as overvalued.
Regis Corp (NYSE:RGS) was initiated with a Neutral at RW Baird.
CommVault's (NASDAQ:CVLT) coverage was resumed with a Neutral at Merrill Lynch.
The shares of Orbitz Worldwide, Inc. (NYSE: OWW) are skidding all over the charts today following the company's second-quarter earnings release. Orbitz confessed to a net loss of $5 million, or six cents per share, much improved from its year-ago loss of $32 million. Revenue for the recently concluded quarter inched 1% higher to $231 million.
While the results were better than the same quarter in 2007, analysts were looking for an even smaller loss of three cents per share on more robust revenue of $234 million.
Gross bookings increased 4% to $3 billion, thanks to a little help from overseas -- international bookings rocketed 41% higher, compared to a 1% slump in domestic bookings. Orbitz's international business now accounts for 23% of its revenue, up three percentage points from the year prior.
Despite the challenges facing Orbitz, president and CEO Steven Barnhart professed his enthusiasm about some new initiatives to drive growth. Specifically, the travel firm is launching a new "Price Assurance" functionality, and the company just entered a multi-year partnership with Microsoft (NASDAQ: MSFT) to serve as the online provider for MSN.com's travel portals. Barnhart said these initiatives "will accelerate our domestic growth in the second half of the year and help offset any impact from current economic and travel industry uncertainty."
Oppenheimer downgraded shares of Chelsea Therapeutics (NASDAQ:CHTP) to Perform from Outperform after their survey suggested physicians believe currently available generic treatments are adequate in neurogenic orthostatic hypotension, which could impact the company's lead drug Droxidopa.
Clearwire (NASDAQ:CLWR) was cut to Sell from Hold at Citigroup on valuation, as they estimate fair value at $13.
OTHER DOWNGRADES:
Goldman downgraded Kellogg (NYSE:K) to Neutral from Buy and Hershey Foods (NYSE:HSY) to Sell from Neutral.
MOST NOTEWORTHY: U.S. Auto Parts, DealerTrack and AspenBio Pharma were today's noteworthy downgrades:
Piper downgraded shares of U.S. Auto Parts (NASDAQ: PRTS) to Neutral from Buy following the company's Q4 results.
JMP Securities cut DealerTrack (NASDAQ: TRAK) to Market Perform from Strong Buy as they believe future market share losses to RouteOne are more significant than previously believed.
Oppenheimer has concerns that most of AspenBio Pharma's (NASDAQ: APPY) market value is tied to the AppyScore test for appendicitis, while available clinical data may not be sufficient to drive adoption. The firm lowered APPY to Perform from Outperform.
OTHER DOWNGRADES:
Wachovia cut Reddy Ice (NYSE: FRZ) to Market Perform from Outperform.
Deutsche Bank lowered its rating on Valspar (NYSE: VAL) and Airgas (NYSE: ARG) to Hold from Buy.
Bear upgraded American Eagle Outfitters (NYSE: AEO) to Outperform from Peer Perform, citing positive risk/reward given its favorable positioning relative to the teen sub-sector, sustainable margins, and healthy balance sheet.
OTHER UPGRADES:
Kroger Co. (NYSE: KR) was upgraded to Outperform from Neutral at Credit Suisse.
MOST NOTEWORTHY: Orbitz Worldwide (OWW), Agilent (A), National Instruments (NATI) and Ametek (AME) were today's noteworthy initiations:
Orbitz Worldwide (NYSE: OWW) was initiated by a host of firms today:
Thomas Weisel and Morgan Stanley started Orbitz with an Overweight rating.
Pacific Crest and Piper Jaffray started shares with Overweight ratings, and $18 and $16 targets, respectively.
Stifel initiated Orbitz with a Buy rating and $16 target, while JP Morgan started shares with a Neutral rating.
Citigroup finds the valuation of Agilent (NYSE: A) attractive at current levels and started shares with a Buy rating, They expect a recovery in the company's Electronic Measurement business to drive shares to $43.
Citigroup initiated National Instruments (NASDAQ: NATI) with a Hold rating and $40 target, saying that shares could suffer if PMI decelerates in 3Q07 or negatively inflects in 1Q08.
Ametek (NYSE: AME) is is CIBC's top pick in the mid-cap Industrial Diversified area, due to the company's attractive asset portfolio and growth opportunities. CIBC initiated Ametek with a Sector Outperformer rating and $45 target...
OTHER INITIATIONS:
Jefferies initiated WNS Holdings (NYSE: WNS) with a Hold rating.
Five Orbitz insiders bought close to $600,000 worth of Orbitz Worldwide Inc's (NYSE: OWW) stock between $9.55 to $10.10 last week. This is another sign that better days could be ahead for the online travel business.
Expedia Inc (NASDAQ: EXPE) earlier this summer announced plans to repurchase 42% of its stock through a tender offer, before the collapse of the high-yield market caused the company to reduce its share buyback.
Collapsed share buyback or not, the executives at the top online travel companies are becoming increasingly bullish. Barry Diller, Expedia's chairman, said in the most recent earnings call that this is a business that can handle leverage, suggesting pricing in this industry is improving. Additionally, Priceline.com Inc (NASDAQ: PCLN) also reported very strong results.
After having a severe industry downturn in 2006, the industry is beginning a nice upcycle. The trend is your friend in the online travel business.
Five insiders bought $592.7K in Orbitz Worldwide Inc's (NYSE: OWW) stock at per-share prices ranging from $9.55 to $10.10, reported Barron's Online's (subscription required) "Inside Scoop" column.
The Financial Times (subscription required) reported that General Electric Company (NYSE: GE) is believed to be considering the sale of Lake, its Japanese consumer finance subsidiary.
According to security company Symantec Corporation's (NASDAQ: SYMC) blog, there is a new Trojan called "infostealer.monstres" which is attacking online recruitment site Monster.com (NASDAQ: MNST).
MOST NOTEWORTHY: CACI Int'l (CAI), Abercrombie & Fitch (ANF), Kohl's (KSS) and the software sector were today's most noteworthy upgrades:
JP Morgan upgraded CACI Int'l (NASDAQ: CAI) to Overweight from Underweight, considering the company an attractive, defensive stock and a "safe haven" based on the government exposure.
Friedman Billings upgraded Abercrombie & Fitch (NYSE: ANF) to Outperform from Market Perform citing ongoing cost-cutting and MG&A lines.
Deutsche Bank upgraded Kohl's (NYSE: KSS) to Buy from Neutral citing valuation and successful execution of its marketing, merchandising and store expansion plans.
Bear Stearns upgraded the software sector to Market Weight from Underweight on valuation...
OTHER UPGRADES:
UBS upgraded Home Depot (NYSE: HD) to Neutral from Sell.
JP Morgan raised Blockbuster (NYSE: BBI) to Overweight from Neutral.
FTN Midwest upgraded to Seagate (NYSE: STX) to Buy from Neutral.
MOST NOTEWORTHY: Old Dominion Freight (ODFL), Jamba (JMBA), AMD (AMD), Orbitz Worldwide (OWW) and Quest Diagnostics (DGX) were today's notable initiations:
Baird is positive on Old Dominion's (NASDAQ: ODFL) growth opportunities, valuation, 2008 improving truck fundamentals, and a potentially seasonally stronger Q4, starting shares with an Overweight rating and $36 target.
Merriman initiated Jamba (NASDAQ: JMBA) with a Buy rating, as the company aggressively expands its store base beyond California.
BMO Capital believes AMD (NYSE: AMD) may lose the Intel platform integrated graphics market, and sizeable Intel platform discrete graphics market share. The firm initiated AMD shares with an Underperform rating and $10 target.
Soleil has concerns regarding Orbitz Worldwide's (NYSE: OWW) decelerating growth and poorer business mix vs. competitors and started shares with a Hold rating and $13 target.
Credit Suisse initiated Quest Diagnostics (NYSE: DGX) with a Neutral rating and $61 target, citing the recent UnitedHealth (UNH) contract loss, slowing growth, and valuation for its Neutral rating...
For internet company IPOs, the results were mixed this week. The online career site, Dice Holdings (NYSE: DHX), saw its share price increase about 4.2% (with the IPO priced at the top of its range). But there was also the meager performance of Orbitz Worldwide (NYSE: OWW), whose shares fell 3.3% on its debut. Despite this, we are still seeing filings from Net companies.
The latest filing: Internet Brands. In fact, back in 2000, the company filed for an IPO -- but it was too late (as the dot-coms turned into dot-bombs). But much has happened since then -- and the company looks a lot different. Through aggressive M&A, Internet Brands now has more than 40 principal websites -- focused on consumer categories. Examples include: CarsDirect.com, Wikitravel.org, FlyerTalk.com, ApartmentRatings.com, and DoItYourself.com.
As of June, the network attracted about 24.5 million unique visitors. This is up 161% from the same period a year ago. The business model is primarily driven by advertising. Last year, Internet Brands posted about $84.8 million in revenues. However, there is fierce competition. Just some of rivals include Google Inc. (NASDAQ: GOOG), Yahoo! Inc. (NASDAQ: YHOO), and Microsoft Corp. (NASDAQ: MSFT).
The lead underwriter on the IPO is Credit Suisse (NYSE: CS).
There's been lots of dealmaking with online travel portal, Orbitz Worldwide Inc. (NYSE: OWW). Back in 2003, the company went public, and then a year later sold out to Cendant. Cendant then meshed its online travel properties into a new unit, called Travelport, which was then sold to the Blackstone Group (NYSE: BX).
And the dealmaking continued this week as Orbtiz raised a cool $510 million in an IPO. Unfortunately, investors were not impressed. The IPO was priced at $15, which was below its $16-$18 range. The stock then fell 3.3% on its first day of trading.
But the IPO proceeds won't go to Orbtiz. Rather, the cash will flow back to the parent company, Travelport (in a special dividend). In other words, the IPO is really a cash-out -- not a way to help build Orbitz.
True, Orbitz has some nice brands – such as CheapTickets.com and eBookers.com. But the fact is that the online travel space is highly competitive, with players like Expedia Inc. (NASDAQ: EXPE) and Priceline.com Inc. (NASDAQ: PCLN).
Another big issue: the company has never posted net income. So, I can understand why Wall Street has some concerns.
Today was another one of those days where one could feel like the Duke Brothers from Trading Places. It was just another down day, yet the pain seemed to capture everything and everyone. The reasons markets are hurting are all the same as they have been, but such is life and expanding the TARP bailout money isn't helping. 
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Here are some highlights from this past week's 
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For internet company IPOs, the results were mixed this week. The online career site, 
There's been lots of dealmaking with online travel portal, 
Stock picks and pans for troubled times: RIMM, ED, ISRG, GLW, LEA, SLB, GOOG ...
Is Berkshire Hathaway better than S&P Index?
Closing Bell: Torch Passing on a Friday Rally
