Paul Kangas' Stocks in the News
Wednesday, May 20, 2009
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DARREN GERSH: Stocks started off strong following Bank of America's successful efforts to raise private money to bolster its capital levels. Then the market went sideways through midday, but stocks headed decidedly lower after the afternoon release of the minutes from the Fed's April 29th policy meeting. The Fed thinks housing may be nearing the bottom, but central bank governors lowered their forecast for the economy this year and see a weaker recovery in 2010. So stocks ended the day with a modest selloff. The Dow fell 52 to 8422. The NASDAQ lost six to 1727 and the S&P 500 lost almost five points to close at 903. Those Fed minutes also showed Ben Bernanke and company are discussing buying more bonds, including government bonds and that helped drive down interest rates. The yield on the 10-year note falling to 3.19 percent which sounds like what the Fed is hoping for.
No surprise here, Bank of America (BAC) topping the big board actives, once again closing up $0.24. The bank is raising more private capital, but analysts tell me it's important to keep in mind that this is the additional money the government thinks the banks need to withstand a deeper recession, not necessarily money the bank can use to lend and make more money.
Citigroup (C) down $0.08.
Ford Motor (F) revs up $0.22. A fair amount of volume on some optimism Ford sales are stabilizing.
General Electric (GE) up $0.07.
Wells Fargo (WFC) slid $0.94.
JPMorgan (JPM) down $1.26.
And Amer Intl Group (AIG) loses $0.03.
Regions Financial (RF) down $0.35. It's raising $1.25 billion in new capital, but still not as much as the government wants it to.
Invesco (IVZ) added $0.63. It's also trying to raise capital through a $400 million stock offering at $14 each.
And General Motors (GM) rounding out the actives, closing up $0.18 and frankly, I don't understand this, because many bankruptcy lawyers and analysts tell me the stock is going to be wiped out soon. GM has plans to sell up to 60 billion shares to pay off its government loans and if that happens, the current shares would be worth about a penny. GM says a bankruptcy filing is probable. Standard & Poor's Brian Levy calls the trading here irrational and says people are buying the stock like a lottery ticket.
Target (TGT) up $1, several stocks fitting the theme of not as bad as people thought. Same store sales down at Target almost 4 percent. Target says its fastest growing business is in basic needs. Those are low market products people have to buy.
Deere (DE) added $0.51. Again, fiscal second quarter sales not as bad as expected, but the company still thinks sales will be down 19 percent on the year.
Analog Devices (ADI) up $3.22 or almost 16 percent, again, not as bad as feared, earnings of $0.21 a share. Analysts were looking for $0.09, but revenues were flat and the outlook for the current quarter is flat, but that's better than earlier hints the business would be down.
Visa (V) rose $0.16. Interesting given the legislation Congress just passed curbing credit card abuses. In a new report, Wachovia expects the credit card market to be stagnant for a while but says Visa will do well because of increased use of debit cards.
And we told you about the coffee wars yesterday. Today Deutsche Bank upgraded McDonalds (MCD) based in part on its McCafe (ph) coffee drinks, now Hitting 10,000 locations, the market loving it. McDonald's up $2.38.
And Hertz (HTZ), the big loser on the day, down $1.38 or almost 17 percent. The company is issuing up to 46 million common shares to shore up its finances and pay off debt. The car rental industry has been under a lot of pressure. Consumers just aren't traveling.
NASDAQ, Apple (AAPL) loses $1.58. Mark your calendar. On June 8th, the company is coming out with a new operating system, Snow Leopard and people are speculating we'll see a new iPhone too.
First Solar (FSLR) up $12.70.
Research in Motion (RIMM) rose $0.56.
Microsoft (MSFT) up $0.07.
Intel (INTC) slid $0.07.
Cisco Systems (CSCO) down $0.28.
Google (GOOG) down $1.70.
Qualcomm (QCOM) a $0.23 gain.
Amazon (AMZN) up $0.10.
And Oracle (ORCL) losing $0.03.
And finally, there you see Palm (PALM). It's off $1.03 today. There are very high hopes for the new pre smart phone which launches June 6th, but so far, we've seen few independent stress tests of that phone which is why Needham Brokerage analyst Charlie Wolfe (ph) has my favorite quote of the day. He says Palm shares are priced as if quote, the company could walk on water but Wolfe doesn't think it can.
