If you were looking for help from the economic front or from the oil patch today to help out the market, that wasn't in the cards. Home prices plunged by a record 15.3% from may 2007 to May 2008. Consumer confidence also came in at a 16-year low. From bottom to top to bottom we had more than a 150 point trading range in the DJIA today. These are the unofficial closing levels:
Eastman Kodak Co. (NYSE: EK) saw a sharp rise with shares up 15% at $4.20 late in the day after the company announced a large IRS refund and a $1 billion buyback to retire close to half of its stock.
Eli Lilly & Co. (NYSE: LLY) hit the 52-week low list and a multi-year low earlier today before recovering list after the FDA delayed a decision on its anti-clot blood thinning drug, with shares down some 1.5% at $46.87 in the final minutes today.
Kroger Co. (NYSE: KR) saw shares rise a sharp 7% with shares at $27.88 in the final minutes today after the company raised guidance.
Reliance Steel (NYSE: RS) saw shares up after the company raised its own guidance again. Its shares were only up 0.5% at $73.85 in the final minutes of the trading day. Shares were up over 5% at the start.
United Parcel Service Inc. (NYSE: UPS) saw a drop after the company came clean and fessed up that high fuel prices and low demand for premium delivery services were hurting business domestically and abroad. Shares were down 6% at $62.26 late in the day.
MOST NOTEWORTHY: BJ's Wholesale, Affiliated Managers and Yahoo! were today's noteworthy downgrades:
Citigroup downgraded shares of BJ's Wholesale (NYSE: BJ) to Hold from Buy on valuation and views a takeout as less likely given the current credit market conditions.
Wachovia downgraded shares of Affiliated Managers (NYSE: AMG) to Market Perform from Outperform as they believe credit quality concerns and record commodity prices will hinder the company's recovery in equity flows.
Thomas Weisel downgraded Yahoo! (NASDAQ: YHOO) to Underweight from Market Weight based on visibility into fundamentals and another potential reorganization that will likely be met with skepticism.
OTHER DOWNGRADES:
Third Wave (NASDAQ: TWTI) was cut to Neutral from Outperform at Baird.
United Parcel Service (NYSE: UPS) lowered its earnings outlook because of rising fuel costs and a slowing U.S. economy.
Morgan Keegan says "the current economic environment and unprecedented fuel prices, there is little opportunity for multiple expansion, and it is likely multiples will contract in the near term."
UPS July option implied volatility of 27 is above its 26-week average of 24 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
U.S. stock futures were lower early Tuesday ahead of the two-day Federal Reserve policy meeting. Meanwhile, oil climbed on supply concerns following further Nigeria unrest and new Iran sanctions and steadied above $137 a barrel. UPS (NYSE: UPS) also gave a profit warning.
U.S. stocks ended almost flat Monday as the market digested some deal activity but remained concerned over oil prices with many investors staying on the sidelines ahead of the Fed meeting. Both the Dow industrials and the S&P 500 ended nearly the same as Friday with the Nasdaq Composite dropping 20 points, or 0.85%.
Economic releases today include June consumer confidence to be reported at 10:00 a.m. EDT. Consumer confidence probably fell this month to the lowest level in more than 15 years, meaning many will try to economize on their spending. The Case-Shiller report on April home prices also is on tap.
Mostly, though, investors will be concerned with the Fed's decision and statement Wednesday. While most on Wall Street believe the Fed will hold rates unchanged this time, many think the Fed will discuss a shift -- to some extent -- to focus more on inflation than the slowdown as well as hint at future rate hikes. The Fed's balancing act between trying to stimulate the economy while keeping inflation under check is becoming a more difficult task by the day.
When UPS (NYSE: UPS) warned on earnings, no one should have been surprised, but it was something of a death of hope. Rival Fedex (NYSE: FDX) has already said it would be a bad year. UPS waited a week. Then, it admitted higher fuel prices and slowing customer orders were doing it substantial harm.
According toMarketWatch, "The package-delivery giant cut its second-quarter profit forecast to a range of 83 cents to 88 cents a share. In late April, UPS had expected to earn between 97 cents and $1.04 a share." At least the company will make money.
Perhaps that is the key. At least it will make money.
Even with skyrocketing oil prices, many large US companies have done such a good job driving up productivity over the last year that they can do relatively well as inflation undermines their gross margins. It is that productivity which may save some large American firms from disaster and keep stronger companies in a relatively good position.
The Bureau of Labor Statistics revised Q1 productivity upwards to 2.4%. This makes it less necessary for business to raise worker compensation. That, in turn, keeps costs down.
And, companies like UPS can still make money.
Douglas A. McIntyre is an editor at 247wallst.com.
Recently, I was shopping for a couple of books on half.com. However, having spent about a half hour in my search, I decided, at the last minute, to forego my purchases. While the sellers were offering great prices, the shipping raised the books' costs to above what I would pay in a local bookstore. In the end, it just wasn't worth it.
As the price of gas goes up, so does the price of postage. While this hasn't been much of a concern with the U.S. Postal Service, private carriers like DHL, UPS (NYSE: UPS), and FedEx (NYSE: FDX) all pass the cost of fuel on to their customers. For example, at the end of 2007, UPS was tacking on a 4.75% gas surcharge for ground deliveries. Right now, it's 8.5%, with an even higher price for express shipping.
Some retailers are fighting back with free shipping or a flat fee for unlimited shipping. Unfortunately, while these deals may draw in customers, they chip away at the sellers' bottom line. As many online sellers have built their client base by offering better-than-store prices, the added costs may make it impossible for them to generate sufficient profit. This is likely to be particularly devastating for companies like Amazon.com (NASDAQ: AMZN), who are completely reliant upon their internet sales. At the very least, we're likely to see a major surge in companies that use U.S. Postal Service!
MOST NOTEWORTHY: Alaska Communications, Royal Bank of Scotland and Frontier Oil were today's noteworthy upgrades:
Banc of America upgraded shares of Alaska Communications (NASDAQ: ALSK) to Buy from Neutral as they believe the company will return to a dividend growth focus after completing its strategic initiatives.
Credit Suisse raised Royal Bank of Scotland (NYSE: RBS) to Neutral from Underperform as they believe the company has already taken "prudent" write-downs.
Bear upgraded Frontier Oil (NYSE: FTO) to Peer Perform from Underperform as they believe the company is better positioned to withstand this period of margin weakness.
OTHER UPGRADES:
Jefferies upgraded Adobe Systems (NASDAQ: ADBE) to Hold from Underperform.
RBC Capital lifted Medarex Inc. (NASDAQ: MEDX) to Sector Perform from Underperform.
Exxon Mobil (NYSE: XOM) is set to face disgruntled shareholders, including members of the Rockefeller family at its annual meeting today. They want to split split Exxon's chairman and chief executive positions. Other proposals include seven about the company's environmental policies.
The Wall Street Journalreported that Bear Stearns (NYSE: BSC) plans to hand over documents to the Securities and Exchange Commission showing that several Wall Street firms, including Goldman Sachs (NYSE: GS), Citadel Investment Group and Paulson & Co., cut their exposure to Bear in the weeks leading up to its collapse.
United Parcel Service Inc (NYSE: UPS) shares rose in Europe after Merrill Lynch upgraded the company's stock from Neutral to Buy.
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.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
When you need to ship a package, which company first comes to mind? According to last year's Battle of the Brands non-scientific poll, an overwhelming majority said they favored United Parcel Service Inc. (NYSE: UPS) over FedEx Corp. (NYSE: FDX). Higher fuel surcharges, a weak economy, reduced domestic package volume, and a recent push from the U.S. Postal Service have impacted both of these international shipping companies in the past year, but Americans still want the same quality service at a discount price.
Let's take a look at a few changes since last year:
The US Postal Service Tries To Gain Ground
The largest player in the U.S. overnight package delivery business is attempting to increase its market share in the fast-delivery business next month. USPS is barely holding on to its 32% market share in the business, as FedEx and UPS continue to push the envelope at 31% and 25% market share, respectively. For the first time, shippers using Express Mail, Priority Mail, and several other parcel services will be able to get lower rates for large- and medium-volume contracts, according to the agency. Will UPS and FedEx need to cut their prices further to compete with the USPS?
Stock futures indicated a higher start earlier this morning following solid results from internet bellwether Yahoo late Tuesday. As earnings reports have started coming out this morning, though, stock futures have started to reverse direction.
Other than many earnings reports on tap today, investors may look at U.S. oil inventories when out later today after reaching nearly $120 a barrel (10 cents shy) Tuesday. Analysts expect supplies declined in the past week. So far oil has moved somewhat lower today, but remained near $118 a barrel.
U.S. stocks tumbled Tuesday following some disappointing results from several tech and consumer stocks. The Dow industrials dropped 104 points, or 0.82%, the S&P 500 fell 12 points, or 0.88%, and the Nasdaq Composite lost 31 points, or 1.29%.
Despite many upcoming earnings reports, investors will likely continue to focus on Yahoo! (NASDAQ: YHOO), which has reported strong results, beating analyst estimates on both the top line and bottom line. Still, the results weren't phenomenal, or uncovered any surprising issue that might show it could fare better on its own. Yahoo! has until Saturday to accept Microsoft (NASDAQ: MSFT)'s takeover offer of $31 a share or face a proxy fight. Microsoft has already said it wouldn't raise its offer, but of course, nothing is certain at the moment. YHOO shares are down about 0.8% in premarket trading.
.gif){kind=logo}
United Parcel Service
U.S. stock futures were lower early Tuesday ahead of the two-day Federal Reserve policy meeting. Meanwhile, 
.gif){kind=logo}
This post is part of our .gif){kind=logo}
Starbucks: The next McDonald's
Wal-Mart's launch of $20 slimming jeans will be a huge success
Why I spent some of my stimulus check on GE
