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Closing Bell: Investors gear down earnings expectations (AIG, HNSN, MRVL, MYL, UNH)

This was an interesting day in the markets. The market opened higher because of yesterday's recovery, but slid from the open. And it slid lower most of the day. Commodities fell again on worries that the economy isn't far enough along to support higher prices, and possible regulation on the size of speculators continued to hamper prices.

T. Boone Pickens gave bullish oil forecasting today, but compared to the past it wasn't that bullish. There was no major economic data for the markets to chew today, just a continued paring down of expectations ahead of earnings season. Here were the unofficial closing bell levels:

Dow 8,162.39 -162.48 (-1.95%)
S&P 500 880.96 -17.76 (-1.98%)
Nasdaq 1,746.17 -41.23 (-2.31%)

Top Analyst Calls

Continue reading Closing Bell: Investors gear down earnings expectations (AIG, HNSN, MRVL, MYL, UNH)

Cramer on BloggingStocks: No worries at JPMorgan

TheStreet.com's Jim Cramer says the bank has the least to worry about and can gain from new federal regulation.

Sometimes you just have to step back from the small-picture hubbub and make some assumptions about the new landscape if legislation passes.

If you look at the health care legislation you know that it is going to cut out some profitability for companies that have relied on the government for big profits, which means the companies that have the most Medicare exposure. So you go with the health maintenance company with the least Medicare exposure -- WellPoint (NYSE: WLP) (Cramer's Take). It simply can't get hit as badly as a Humana (NYSE: HUM) (Cramer's Take) or a UnitedHealth (NYSE: UNH) (Cramer's Take) because it doesn't have the exposure.

Continue reading Cramer on BloggingStocks: No worries at JPMorgan

Analyst upgrades, downgrades and initiations: BAC, ERIC, UNH, WRC

Analyst upgrades:
  • Keefe Bruyette upgraded Bank of America (NYSE:BAC) to Outperform from Market Perform due to valuation and the company's better balance sheet following capital raises. The firm raised its target on shares to $16.50.
  • Merriman upgraded Blue Coat Systems (NASDAQ:BCSI) to Buy from Neutral to reflect stabilizing demand and merger synergies from the Packeteer acquisition.
  • Thomas Weisel upgraded Genomic Health (NASDAQ:GHDX) to Overweight from Market Weight based on valuation, a new colon cancer assay expected in 2010, and upside from new sales hires.
  • Plexus (NASDAQ:PLXS) was upgraded to Outperform from Neutral at Baird.
  • Great Plains Energy (NYSE:GXP) was raised to Buy from Neutral at Goldman.
  • Ericsson (nASDAQ:ERIC) was upgraded at Societe Generale to Buy from Hold.

Continue reading Analyst upgrades, downgrades and initiations: BAC, ERIC, UNH, WRC

UnitedHealth (UNH) sinks on insider selling

UNH logoUnitedHealth Group (NYSE: UNH - option chain) stock is falling today after Chairman of the Board Richard T. Burke sold 100,000 shares of the stock on the open market last Friday. That equates to $2.9M of selling against no insider buying in the past two months. 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 UNH.

This morning, UNH opened at $27.06. So far today the stock has hit a low of $26.37 and a high of $27.80. As of 11:30, UNH is trading at $26.98, down $0.61 (-2.2%). The chart for UNH looks bullish and S&P gives UNH a positive 4 STARS (out of 5) buy ranking.

Continue reading UnitedHealth (UNH) sinks on insider selling

Analyst upgrades, downgrades and initiations: HD, HBC, GS, MS, BAC, JPM, C ...

Analyst upgrades:
  • Jefferies upgraded Home Depot (NYSE: HD) to Buy from Hold as they expect significant multiple expansion as earnings revisions start to bottom out and the market starts to factor in a recovery. The firm raised its price target to $24 from $18-$20.
  • Goldman upgraded HSBC (NYSE: HBC) to Neutral from Sell and removed the stock from their Asia Pacific Sell List given the company's plans to stop making new loans at its U.S. unit.
  • Deutsche Bank upgraded Ensco International (NYSE: ESV) to Hold from Sell on valuation as it believes weakening shallow water demand is priced into shares at current levels. The firm raised its target price to $32 from $30.
  • Liberty Global (NASDAQ: LBTYA) was raised to Equal Weight from Underweight at Morgan Stanley.
  • UnitedHealth (NYSE: UNH) was lifted to Outperform from Market Perform at Bernstein.

Continue reading Analyst upgrades, downgrades and initiations: HD, HBC, GS, MS, BAC, JPM, C ...

Cramer on BloggingStocks: Don't need stocks? Don't own 'em

TheStreet.com's Jim Cramer says if you need money for anything important in the near future, get it out of the stock market.

Fall back. Fall back to basic principles. What do people have to do whether they want to do it or not? What do governments have to pay for whether they want something or not? What must be used whether you like it or not?

That's where we are right now in the helter-skelter pell-mell race to take all stocks to single digits as the notion of a worldwide global depression sinks in.

Continue reading Cramer on BloggingStocks: Don't need stocks? Don't own 'em

Humana (HUM) plummets on Medicare warning

HUM logoHumana (NYSE: HUM - option chain) stock is declining today after the company said preliminary 2010 Medicare Advantage payment rates could cause reduced profits in 2010. These comments from HUM are dragging down the entire group, including industry stalwart UnitedHealth Group (NYSE: UNH), which is off by upwards of 15%. 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 HUM.

This morning, HUM opened at $36.70. So far today the stock has hit a low of $30.57 and a high of $36.86. As of 11:55, HUM is trading at $31.41, down $9.13 (-22.5%). Prior to today, the chart for HUM looked bullish, while S&P gives HUM a positive 4 STARS (out of 5) buy ranking.

Continue reading Humana (HUM) plummets on Medicare warning

Cramer on BloggingStocks: This time around, bad is just bad

TheStreet.com's Jim Cramer says picking stocks -- or worse, picking a bottom -- remains a dangerous activity.

Sometimes it is so bad that it is BAD! Don't laugh at that seeming bit of counterintuitive logic. Every investment professional knows that because of the way economic cycles and central banks work, you are often looking for signs of such stress and negativity that it is so bad it is GOOD because of what the banks can do and what a bottom looks like.

This time it hasn't worked out that way. This time, what's bad is bad and getting worse. This weekend, David Carr in The New York Times wrote an excellent piece about the mistake of looking for a silver lining, something that news media does.

Continue reading Cramer on BloggingStocks: This time around, bad is just bad

Analyst upgrades, downgrades and initiations: CS, CI, UNH, AMAT, NFLX

Analyst upgrades:
  • Jefferies upgraded MSC Industrial (NYSE:MSM) to Buy from Hold after meeting with management as they believe shares are attractive at current levels. The firm raised their target price to $44 from $32.
  • UBS upgraded DuPont Fabros (NYSE:DFT) to Buy from Neutral and raised their target to $7 from $2. The firm believes DuPont Fabros will receive a waiver on its CH1 Construction loan for at least a year.
  • Royal Bank of Scotland upgraded Credit Suisse (NYSE:CS) to Buy from Hold to reflect the company's derisking of its trading book.
  • Smith & Nephew (NYSE:SNN) was upgraded to Buy from Neutral at Goldman and added to the Conviction Buy List; Cigna (NYSE:CI) was also added to the Conviction Buy List.
  • Affymetrix (NASDAQ:AFFX) was raised to Equal Weight from Underweight at Morgan Stanley.
  • Airtran Holdings (NYSE:AAI) was upgraded to Buy from Hold at Jesup & Lamont.

Continue reading Analyst upgrades, downgrades and initiations: CS, CI, UNH, AMAT, NFLX

Options Update: Volatility decreases as shares rally

Honeywell (NYSE: HON) closed at $34.71. HON is scheduled to report Q4 EPS on January 30. HON January option implied volatility of 41 is below its 26-week average of 49, according to Track Data, suggesting decreasing price movement.

Nvidia (NASDAQ: NVDA) closed at $8.79. NVDA is scheduled to report Q4 EPS on February 10. NVDA is scheduled to introduce new notebook chips in late spring. NVDA February option implied volatility is at 74; June is at 69; near its 26-week average according to Track Data, suggesting non-directional price movement.

Continue reading Options Update: Volatility decreases as shares rally

Earnings highlights: Apple, Microsoft, GE, Johnson & Johnson, Harley Davidson and others

Here are some highlights from this past week's earnings coverage from BloggingStocks:

For more highlights from this week, see eBay, Google, IBM, Southwest, UAL, AMR, Northern Trust and others

Continue reading Earnings highlights: Apple, Microsoft, GE, Johnson & Johnson, Harley Davidson and others

UnitedHealth Group (UNH) lifted by Q4 earnings, reaffirmed forecast

UNH logoUnitedHealth Group (NYSE: UNH - option chain) shares have moved higher today after the company reported a fourth-quarter profit of $726 million, or 60 cents per share. UNH's adjusted profit of 78 cents per share matched analysts' projections. The company also reaffirmed its 2009 earnings forecast of $2.90 to $3.15 per share. If you think that the stock 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 UNH.

UNH opened this morning at $25.44. So far today the stock has hit a low of $25.25 and a high of $27.30. As of 12:00, UNH is trading at $26.52, up $1.47 (5.9%). The chart for UNH looks neutral and S&P gives UNH a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $20 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 an 8.7% return in just two months as long as UNH is above $20 at March expiration. UNH would have to fall by more than 24% before we would start to lose money. Learn more about this type of trade here.

UNH hasn't been below $20 since early in December and has shown support around $23.50 recently.

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 UNH
.

Options Update: Johnson & Johnson and Mentor volatility up into JNJ's buyout

Johnson & Johnson (NYSE: JNJ) will purchase Mentor (NYSE: MNT) for $31 per share. MNT, a supplier of medical products closed at $16.15 Friday. MNT December option implied volatility of 92 is above its 26-week average of 55 according to Track Data, suggesting larger price movement.

JNJ is recently trading at $58.24 in pre-open trading, below its close of $58.58. JNJ says: "the transaction is expected to have a dilutive impact to JNJ 2009 earnings per share of approximately $0.03 - $ $0.05." JNJ December option implied volatility of 41 is above its 26-week average of 25 according to Track Data, suggesting larger price movement.

UnitedHealth (NYSE: UNH) closed at $21.01 Friday. UNH affirmed its previous outlook for 2008 net earnings of $2.95 to $2.98 per share. UNH rolled out www.myoptumhealth.com for general public, the initiative will compete with WebMd, Mayo Clinic Revolution Health & other health-information portals. UNH December option implied volatility of 92 is above its 26-week average of 59 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Cramer on BloggingStocks: 'Cheap' is meaningless

TheStreet.com's Jim Cramer says tons of stocks look like good buys, and they go down all the time.

All weekend I heard it. Stocks have gotten too cheap. Put 'em away cheap. Don't worry about 'em cheap. To which I say, stocks are only cheap if the companies make it. Stocks are only cheap if the bondholders don't claim them.

Every day I see cheap stocks. Ford (NYSE: F) (Cramer's Take) reported this morning. Ridiculously cheap. How cheap is Sprint (NYSE: S) (Cramer's Take), for heaven's sake? Did you see the Sunrise Senior Living (NYSE: SRZ) (Cramer's Take) numbers? That stock should show up when you enter "cheap stock" in Google. Except Las Vegas Sands (NYSE: LVS) (Cramer's Take) comes up.

When Warren Buffett says stocks are cheap, or Jeremy Grantham or Steve Leuthold or Jeremy Siegel, it's very heartening. You just want to go out there and buy cheap stocks like CBS (NYSE: CBS) (Cramer's Take) and Williams-Sonoma (NYSE: WSM) (Cramer's Take) and Ann Taylor (NYSE: ANN) (Cramer's Take) and Talbots (NYSE: TLB) (Cramer's Take).

Continue reading Cramer on BloggingStocks: 'Cheap' is meaningless

Serious Money: More signs the market has bottomed

Some may view the sun as rising while others see it setting. Before you send me your rant that the pain has just begun and I am foolish to believe the recent market upswing is anything but a short term reprieve, let me share a few thoughts.

Today Wachovia Corp (NYSE: WB) reported a loss of $1.30 a share compared to the average analysts' guess of $1.27 a share. WB lost almost $9 billion, is cutting the dividend and will layoff 6,400 employees. All bad news -- and still the the stock and the DJIA are up!

At the same time, oil is trading down about $4 a barrel during the busiest driving time of the year because people are actually conserving gas. The market is working. It should also be noted that after the Bush administration spent over seven and a half years stating various preconditions to establishing relations with Iran, last week they decided to send an envoy and start a dialog. It may be good or bad politics depending on your view -- but it is only good for the stabilization of oil prices.

Continue reading Serious Money: More signs the market has bottomed

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Symbol Lookup
IndexesChangePrice
DJIA-36.658,146.52
NASDAQ+3.481,756.03
S&P 500-3.55879.13

Last updated: July 10, 2009: 10:23 PM

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