Paul Kangas' Stocks In The News
Tuesday, July 25, 2006
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PAUL KANGAS: There are new signs tonight that America`s housing market is continuing to slow down. Sales of existing homes in June fell 1.3 percent, the eighth drop in the past 10 months. The report from the National Association of Realtors also shows home prices edged up in June at their slowest pace in more than a decade -- just .9 of a percent from June of 2005. The median pricing of an existing home sold last month was $231,000.
That housing market news put Wall Street on the defensive this morning, as did profit-taking from yesterday`s rally and an earnings shortfall from UPS. Cushioning the sell off however was an unexpected up- tick in July consumer confidence and good results, as we just told you, from four of those Dow stocks. At noon, the Dow itself was off a modest 38 points; NASDAQ down five. The market`s resilience and a sharp drop in oil triggered a late comeback resulting in a positive close. The Dow Industrial Average ended up 52.66 at 11,103.71. The NASDAQ Composite rose 12.06 at 2,073.90, while the Standard & Poor`s 500 Index gained 7.97 to 1,268.88. Over in the bond market, the 10-year note fell 6/32 to par and 13/32 putting the yield at 5.07 percent.
New York exchange volume leader on 26.3 million shares, AT&T (T) up $1.17. As you heard, second quarter earnings, $0.58. That was $0.05 above the Wall Street estimate.
Then the big casualty of the day, United Parcel Service (UPS) plunging $8.20, traded as low as $67.25. Those second quarter earnings were higher, $0.97 versus $0.88, but $0.03 below the Street estimate. And what really hurt the stock was the estimate by the company, third quarter earnings will drop to $0.87 to $0.91. On top of that, Merrill Lynch issued a "sell" recommendation.
Let`s have a look at some of the other stocks in the Dow transport sector. Fedex (FDX) down $1.13, traded as low as $104.62.
Burlington Northern Santa Fe (BNI) and CSX (CSX) and Norfolk Southern (NSC) all on the downside on the news from UPS. And the Dow transport index incidentally off 80 1/2 points.
Let`s get back to the active list. We see Lucent Tech (LU) down $0.02.
Followed by Pfizer (PFE) with a $0.17 gain.
Avaya (AV) down $1.44 on sharply lower third quarter earnings of $0.10 versus $0.40 a year ago and that was $0.02 below the Street estimate. Merrill Lynch downgraded the stock to a "neutral" rating.
Ford Motor (F) was up $0.23. Followed by Motorola (MOT), $0.48 gain there.
Advanced Micro Devices (AMD) up $0.42.
General Electric (GE) an $0.08 gain.
And Texas Instruments (TXN) moved up $1.11. After the close yesterday, as we reported, TXN had second quarter earnings of $0.47, up from last year`s $0.35 and today, Citigroup repeated a "buy" recommendation on the stock.
3M (MMM) down $3.58. Second quarter earnings as you saw a bit lower, $1.05 down from $1.06 and $0.02 below the Street estimate.
And let`s have a look at the other three Dow stocks that had earnings out today, all better than expected. The stocks had a little mixed result though. Fractional gains in Altria Group (MO) and Dupont (DD).
McDonald`s (MCD) down $0.08. Of course, McDonald`s had quite a nice run up recently.
Hewlett-Packard (HPQ) a $0.26 gain on the close, but it dropped a bit after hours when the company said it plans to acquire Mercury Interactive for $52 a share. The stock dropped about $1 in after hours trading on that news.
Kraft Foods (KFT) up $2.06. Second quarter earnings, $0.51, up from $0.47 a year ago and the company boosted its 2006 earnings guidance.
Colgate Palmolive (CL) down $1.44. It had higher earnings second quarter, $0.74, up from last year`s $0.67, $0.02 above the Street consensus, but Morgan Stanley noted the company had weakness in its European sales and that`s apparently what hurt the stock.
Agere Systems (AGR) up $2.90, one of the best percentage gainers of the day. Third quarter earnings excluding one-time items, $0.22, $0.06 above the Street estimate. On top of that, the company gave a positive outlook and the Kaufman Brothers brokerage upgraded the stock from "neutral" to a "buy" recommendation.
Then Energizer Holdings (ENR), the battery company, up $5.02. Third quarter earnings, $0.83, up from $0.71 last year.
Then we see a nice gain in Alcon (ACL). This is the eye products company. Second quarter earnings jumped to $1.50 from only $1.04 the year before, a real eye opener there to be sure. Lexmark Intl (LXK), the printing, the printer company, down $2.26. Second quarter earnings $0.74. That was up from last year`s $0.64 but revenues dropped 4 percent and investors didn`t like that apparently.
Champion Enterprises (CHB) which builds those factory-built homes, second quarter earnings jumped to $1.55 from only $0.17 a year ago, but the company said its backlog at the end of the second quarter is the lowest since the first quarter of 2003.
Google (GOOG) topped the NASDAQ actives, down $1.54.
ATI Technologies (ATYT) $0.04 gain.
$0.22 rise in Microsoft (MSFT).
Apple Computer (AAPL) was up $0.51.
And Sandisk (SNDK) did well, up $5.91. After the close yesterday, the company reported higher second quarter earnings, $0.47 versus last year`s $0.37. Revenues soared 40 percent and those earnings incidentally, $0.03 better than the Street expected.
Intel (INTC) $0.06 gain.
$0.96 rise in Amgen (AMGN).
Nutrisystem (NTRI) plunging $13.38 on news its president and chief operating officer resigned due to family health problems.
Dell (DELL) $0.16 gain.
Cisco Systems (CSCO), tenth in volume, was up $0.12.
Then Amazon.com (AMZN) closed down $0.72, but in after hours trading, it dropped another $3. After the close, it reported second quarter earnings only $0.05, down from $0.12 last year, a 58 percent drop.
And those are the stocks in the news tonight.
