Paul Kangas' Stocks In The News
Thursday, August 03, 2006
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PAUL KANGAS: Stocks opened lower on weaker than expected earnings from Sprint Nextel and Prudential Financial, plus an earnings warning from Medtronic. Hardly helping was an unexpected rate hike by the Bank of England. The Dow fell 35 points at the outset of trading. The NASDAQ lost 13. The market recovered as the day wore on, led by the chip and Internet stocks. Also helping was optimism that tomorrow`s employment report will convince the Fed to stop hiking rates. The Dow Industrial Average closed up 42.66 points at 11,242.59. The NASDAQ Composite was up 13.53 at 2092.34. Standard & Poor`s 500 Index rose 1.72 ending at 1280.27. Over in the bond market, the 10-year note gained 1/32 to 101 7/32, putting the yield at 4.97 percent.
The volume leader on the New York Stock Exchange on 65.2 or 4 million shares was Sprint Nextel (S) down $2.38, traded as low as $16.88 after reporting sharply lower second quarter earnings this morning, $0.12, down from $0.40 last year. Those earnings did include merger charges which were considerable. The company did temper its 2006 forecast for wireless revenue. However, it plans to buy back up to $6 billion of its own stock.
Medtronic (MDT), another major casualty, down $6.61. The company forecast lower than expected first quarter revenue of $2.9 billion. It cited very tough conditions in the heart defibrillator market. Standard & Poor`s downgraded Medtronic stock from "buy" to just a "hold" rating.
Lucent Tech (LU) dropped a penny.
Qwest Communications (Q) moving up a dime.
EMC Corp (EMC) a $0.07 gain. That was fifth in big board volume.
Boston Scientific (BSX) off $1.35. That`s down in sympathy with the news coming from Medtronic, which was not very encouraging.
Pfizer (PFE), $0.10 loss. And same story with Ford Motor Co (F). Ford says incidentally its second quarter loss is going to be double its prior forecast.
And then Transocean (RIG), the offshore driller, down $6.88. It had lower second quarter earnings, $0.75, down from $0.90 a year ago. Revenues were up only 4 percent.
Cendant (CD), tenth in big board volume, was up $0.02.
Visteon (VC), formerly it was a unit of Ford. The auto parts maker hired Citigroup and JPMorgan to explore the sale of the company. Meanwhile, Caleon (ph) Securities issued a "buy" on Visteon stock today.
Marsh & McLennan Cos (MMC), the big insurance firm, down $0.87, traded as low as $24.20 after reporting second quarter earnings flat, $0.31, same as last year on flat revenues and it also noted European revenues were below expectations.
Prudential Financial (PRU) losing $4.62. Second quarter operating earnings came in at $1.40. That`s up from $1.12 last year, but $0.04 below the Wall Street estimate.
CVS Corp (CVS), the nation`s second largest drug store chain, in with a 23 percent rise in second quarter earnings, $0.40, up from last year`s $0.33. Those earnings $0.03 above the Street consensus.
Big loser, Leap Frog Enterprises (LF) off $1.53. The company`s in the educational toy business and it had a second quarter loss of $0.41, $0.16 worse than expected and much bigger than last year`s loss of $0.16. Citigroup downgraded the stock from "hold" to a "sell."
Then DRS Technologies (DRS), which provides defense products, $0.52 in first quarter earnings, up from $0.49, but the company also sees second quarter the same, $0.52 and it tempered its fiscal 2007 earnings and revenue guidance.
Guess? (GES), this is the casual apparel retailer, up $4.35. What a turnaround. Second quarter earnings of $0.30, way up from $0.09 last year and $0.08 above the Street estimate. July same store sales up 10 percent.
Officemax (OMX) did well, up $5.10. Second quarter turnaround $0.29 in earnings versus a loss of $0.14 last year. Those earnings $0.15 above the Street consensus.
MGM Mirage (MGM) down $2.69. Second quarter earnings $0.50, up from $0.48 last year. But it sees third quarter earnings falling to only $0.40. That`s $0.04 below the Street estimate. Google (GOOG) up $8.16 doing well.
Apple Computer (AAPL) up $1.43. Apple is in talks with the big three auto makers to link iPods with new cars.
Starbucks (SBUX) down $2.66. After the close yesterday, third quarter earnings $0.18, up from last year`s $0.16, but the company`s July same store sales had the slowest growth in four years, up only 4 percent.
Microsoft (MSFT) $0.09 loss there.
And Cisco Systems (CSCO) an $0.08 gainer. That was fifth in dollar volume.
Intel (INTC) down $0.16.
Amgen (AMGN) $0.15 gain.
Ebay (EBAY) up $1.08.
Garmin Ltd (GRMN) was up $0.15.
And Qualcomm (QCOM), tenth in volume, up $0.49 a share.
Eclipsys (ECLP) in the health care information business, cut its 2006 earnings guidance. It did earlier report second quarter earnings of $0.11 versus a loss of $0.04, but the downward guidance really hurt the stock today.
And those are the stocks in the news tonight.
