Feb 26, 2010

Daily Markets - Financial News And Opinions

Daily Markets - Financial News And Opinions

How “Hot Money” Is Destroying The U.S. Banking System

Posted: 26 Feb 2010 05:50 PM PST

When the Federal Deposit Insurance Corp. (FDIC) released its list of “problem banks” this week, 702 institutions holding $402.8 billion in assets were found to be in trouble.

That’s the longest list in 17 years, and it’s only going to get worse. In fact, regulators are expecting the number of troubled lenders to grow at an accelerating rate this year. They claim that an uptick in commercial-real-estate losses will serve as the key culprit.

But the real culprit - the one that … [visit site to read more]


Another Biggest Drop Since The Depression

Posted: 26 Feb 2010 04:21 PM PST

Today, another biggest drop since the Great Depression… and this time the barometer of economic weakness comes in the form of hotel rates.
From the San Francisco Chronicle:
"San Francisco's year over year room price drop was worse than the Northern California average decline of 13 percent, but consistent with other big tourist cities on the nation's coasts, according to Tom Callahan, CEO of PKF Consulting.
"Callahan said the steep declines from a year ago are the worst since his … [visit site to read more]

5 ETFs To Play The New Retail Trends

Posted: 26 Feb 2010 04:01 PM PST

This retail landscape is not your parents’ retail landscape. Gone are the days of fierce brand loyalty and believing that higher cost means higher quality. Today’s shopper is happily snapping up store brands and always bargain-hunting. This shift means looking at your retail exchange traded funds (ETFs) a little differently.

Three trends in particular are revealing themselves to be forces in the world of retail:

Tepid Spending. Target Corp. (NYSE:TGT), Home Depot Inc. (NYSE:HD) and Macy’s Inc. … [visit site to read more]

Canadian Dollar More Than Just A Commodity Currency

Posted: 26 Feb 2010 04:00 PM PST

I like the Canadian dollar (CAD) more and more. It has some fundamentals that are definitely improving, and some other aspects that are definitely worth considering. Here's why…
Traditionally, the loonie has been linked with the Australian (AUD) and New Zealand dollars (NZD). Now in the current market, currencies are often linked together by at least one of three elements: They either produce a high yield, they are commodity-based or they are funding currencies for a carry trade.
However, … [visit site to read more]

Abbott’s Estimates On The Rise

Posted: 26 Feb 2010 03:12 PM PST

Earnings estimates for Abbott Laboratories (NYSE:ABT) are on the rise following the release of strong fourth quarter and full year 2009 results. Abbott exited 2009 on a strong note with fourth-quarter earnings increasing 11.3% from the year-ago period to $1.18. Full-year earnings increased 12% to $3.72.
Fourth-quarter revenues grew 10.6% to $8,790 million. Revenues were positively impacted by foreign exchange (FX) fluctuations (2.4%). Full-year revenues were $30.8 billion, up 4.2%.
All the … [visit site to read more]

Cartoon: Job Creation’s Questionable Success

Posted: 26 Feb 2010 03:01 PM PST

Source: Chuck Asay, Slate.com, February 25, … [visit site to read more]

True Fiscal Insanity: Creating Money To Buy Government Debt

Posted: 26 Feb 2010 03:00 PM PST

I knew that something was amiss when I woke up and the house was quiet. Having the benefit of seeing a lot of movies where things were "too quiet", I instantly knew that things being "too quiet!" meant that Indians were going to be attacking, or the Japanese attacking, or the Germans attacking, sometimes government goons rushing the place, or zombies, or the police. I dunno who, but you get the point.
Grabbing the bare necessities (a couple of pistols, a few Uzi submachine guns, a … [visit site to read more]

Aegon Returns To Profit

Posted: 26 Feb 2010 02:50 PM PST

Dutch insurer Aegon NV (NYSE:AEG) reported fourth quarter net income of €393 million (US$533 million), which came in substantially ahead of the net loss of €1.18 billion (US$1.60 billion) recorded in the year-ago quarter. The momentous swing was primarily due to improved earnings, realized gains on investments and lower impairments.
Aegon's underlying earnings before tax amounted to €427 million for the reported quarter. These increased year-over-year with growth witnessed across the U.S., … [visit site to read more]

Coming Soon: Two More Futures-Based Commodity ETFs

Posted: 26 Feb 2010 02:46 PM PST

Jefferies, an up-and-coming player in the commodity ETF space, has applied for SEC approval on two new commodity ETFs. The Jefferies TR/J CRB Commodity Index ETF (CRB) and the Jefferies Commodity Real Return ETF (RRET) will focus on similar commodities, but would be far from identical. CRB's underlying index tracks the prices of near-month rolling futures on a diversified basket of commodities, while RRET will invest in futures contracts of commodities included in the CRB 3-Month Forward … [visit site to read more]

FTI Consulting Misses Estimate

Posted: 26 Feb 2010 02:34 PM PST

FTI Consulting Inc.'s (NYSE:FCN) fourth quarter operating earnings of 71 cents per share fell marginally short of the Zacks Consensus Estimate of 73 cents, but were significantly higher than the 56 cents per share in the prior-year quarter.
Net income increased 21.3% year-over-year to $36.6 million. Non-GAAP EBITDA was $80.8 million or 23.6% of revenues, compared to $70.6 million or 21.9% of revenues in the prior-year quarter.
Results benefited primarily from a disciplined expense management and … [visit site to read more]

Daily ETF Roundup: VXX Sinks, JJC Rises

Posted: 26 Feb 2010 02:21 PM PST

U.S. markets remained choppy to finish the week, as the S&P 500 finished the day up slightly. This came after AIG reported an $8.9 billion loss for the quarter and the EU told Greece that its plan to cut spending and raise taxes was not going to be enough to satisfy other members of the currency bloc. However, Chicago PMI numbers increased again, and following hopeful statements from Britain and Japan, markets rose to finish the month in the green. While many investors have been forecasting … [visit site to read more]

Century Aluminum Narrows Loss

Posted: 26 Feb 2010 02:15 PM PST

Century Aluminum (NASDAQ:CENX) reported lower-than-expected results for the fourth quarter of 2009. The aluminum producer posted a fourth-quarter loss of $24.4 million, or 28 cents per share, compared with a loss of $693.5 million, or $14.14 per share, in the same quarter of 2008.
Adjusted earnings matched the Zacks Consensus Estimate and the market estimate. For the full year 2009, the company reported a net loss of $206.0 million or $2.73 per share, compared with a net loss of $895.2 million or … [visit site to read more]

Video: NYSE Closing Bell Market Monitor: AIG, BAC

Posted: 26 Feb 2010 02:08 PM PST

The latest in news, commentary, and information on what’s moving the US equities markets. Watch this broadcast LIVE at 4:00 pm EST daily @ “http://www.nyx.com/marketmonitor” … [visit site to read more]

Moody’s Sees Foreclosure Bubble

Posted: 26 Feb 2010 02:05 PM PST

Great minds think alike. On the heels of my initial morning commentary regarding my belief that housing will remain under pressure, my friends at 12th Street Capital shared a recently released report from Moody’s on the residential mortgage market.

What does Moody’s see? A foreclosure bubble. Ouch!!

Moody’s writes:
HAMP, Moratoriums, and Court Delays Expand Foreclosure Bubble: >>>>>

The backlog of seriously delinquent mortgage loan inventories continues to grow as … [visit site to read more]

Video: Coney Island To Get A Face Lift

Posted: 26 Feb 2010 02:00 PM PST

New York City mayor Michael Bloomberg unveiled plans for the new, revamped Coney Island which is due to open Memorial Day weekend. … [visit site to read more]

FICO Is Shocked By Default Data

Posted: 26 Feb 2010 02:00 PM PST

FICO, the outfit that computes your vaunted "credit score," has just noticed that consumers with high scores are more likely to default on their mortgages than their credit cards.
Last year, the firm says, folks with FICO scores of 760 or higher defaulted on real estate loans at three times the pace they defaulted on plastic.
This shouldn't be any surprise to FICO. We noticed a few days ago that the number of consumers current on their cards but delinquent on their mortgages exploded by … [visit site to read more]

TDS Beats By A Penny

Posted: 26 Feb 2010 01:57 PM PST

Telephone and Data Systems (NYSE:TDS) announced fourth-quarter 2009 results with earnings per share (EPS) of 15 cents beating the Zacks Consensus Estimate of 14 cents.
Net income (attributable to TDS) for the quarter was $16.5 million as against a net loss of $168.9 million ($1.49 per share) reported a year ago, which was hit by heavy impairment charges. For full year 2009, EPS of $1.77 missed the Zacks Consensus Estimate of $1.84 while exceeding the year-ago EPS of 80 cents.
The Chicago-based … [visit site to read more]

Steady Growth For Lubrizol

Posted: 26 Feb 2010 01:41 PM PST

The Lubrizol Corporation (NYSE:LZ) has projected steady earnings growth during the next several years and has established a 2012 goal for earnings of $10.00 per share, an increase of 32% compared with 2009 results.
The 2012 goal of $10.00 earnings per share reflects improved contribution from the company’s base business, a more favorable product mix, as well as potential returns from value-adding acquisitions. Lubrizol plans to sustain operating margins in the Additives business. The company is … [visit site to read more]

Leap Beats, But Loss Widens

Posted: 26 Feb 2010 01:25 PM PST

Leap Wireless (NASDAQ:LEAP) reported fourth-quarter 2009 results with a net loss per share of 82 cents exceeding the Zacks Consensus Estimate of 65 cents. Net loss increased 17.2% year-over-year to $64 million on account of higher operating expenses and lower subscriber growth. The carrier, which operates under the "Cricket” brand, posted a net loss of $54.6 million or 82 cents a year ago.
For full year 2009, net loss climbed 59% year-over-year to $239.5 million or $3.30 per share, exceeding the … [visit site to read more]

Wynn Misses, Narrows Loss

Posted: 26 Feb 2010 01:09 PM PST

Wynn Resorts Ltd.'s (NASDAQ:WYNN) fourth quarter earnings of 8 cents per share missed the Zacks Consensus Estimate of 12 cents. The company had earned 7 cents per share in the year-ago quarter.
For the quarter, net revenues were $809.3 million, up 31.7% from the prior-year period. The increase was driven by a solid performance of its Macau operations and a full-quarter contribution from its Encore property in Las Vegas.
However, the economic environment is still pressurizing the performance of its … [visit site to read more]

GATA’s Uphill Battle, And The Last Ones To The Party

Posted: 26 Feb 2010 01:01 PM PST

There’s a bone that needs to be picked with gold proponents the world over - something that has bothered me for a long time.

As a gold bug, and even as a free market economic student in general, it is your duty to hate central banking and everything it entails - even with gold backing a currency, gold bugs hate central banks because the price of gold is fixed and can’t “rocket to the moon” based on market forces.

With fiat currency, gold bugs should hate central banks even more, because … [visit site to read more]

Fun: The Congressional Reality TV Show

Posted: 26 Feb 2010 01:00 PM PST

It's pretty clear to see that Congress members like to ham it up for the camera, and put on a show while making meddling decisions about how to run the country and "rescue" the economy.
It makes it that much more gratifying to watch The Onion point out the extent of the absurdity with a reality TV show idea. Especially when Rep Cummings says what we know many Congress members must often be thinking… "You know how I am, a big diva, a blowhard, the representative everyone loves to … [visit site to read more]

An Olympian #1 Canadian Stock

Posted: 26 Feb 2010 12:53 PM PST

As we prepare to douse the flame on another Winter Olympics this weekend, we may choose to reflect fondly on them and their host country, Canada. Regardless what you may think about the sports of Ice Dancing or the Skeleton competition, stories of performance excellence and remarkable perseverance always accompany any Olympiad. Plus, more than a few of us would gladly switch fiscal positions with gold medalist Shaun White, aka “The Flying Tomato,” in 2010.
So let’s look beyond the Russian … [visit site to read more]

Video: Crude Surges On GDP Data

Posted: 26 Feb 2010 12:47 PM PST

Front month crude prices were well on the upside this session following a larger-than-expected rise in US 4Q GDP figures. … [visit site to read more]

Medco Beats Marginally

Posted: 26 Feb 2010 12:40 PM PST

Medco Health Solutions (NYSE:MHS) reported fourth quarter earnings of 76 cents per share, surpassing both the Zacks Consensus Estimate of 75 cents and the year-ago period results of 59 cents. For full year 2009, the company's earnings came in at $2.83, up 21.5% compared to $2.33 in 2008.
 
Medco, the largest pharmacy benefit manager (PBM) recorded an increase of 17.6% in revenues which came in at $15.2 billion primarily driven by contributions from significant new client wins as well as … [visit site to read more]

U.S. Auto Parts Shows Profit

Posted: 26 Feb 2010 12:27 PM PST

U.S. Auto Parts Network Inc. (NASDAQ:PRTS) has shown a profit of $586,000 or 2 cents per share in the fourth quarter of 2009 in sharp contrast to a loss of $3.5 million or 12 cents per share in the year-ago quarter. With this, the company has marginally exceeded the Zacks Consensus Estimate of 1 cent per share.
 
Net sales in the quarter went up 35.5% to $45.8 million. Online and offline sales increased 36% and 31%, respectively. The rise in online sales was attributable to a 28% improvement … [visit site to read more]

Lithia Motors Lags Estimates

Posted: 26 Feb 2010 12:13 PM PST

Lithia Motors (NYSE:LAD) has posted a profit of 1 cent per share for the fourth quarter of 2009 in sharp contrast to a loss of 16 cents per share in the year-ago quarter. However, the profit is significantly lower than the Zacks Consensus Estimate of 10 cents per share. The company's results were adversely impacted by weak new vehicle sales at its Chrysler stores.
 
Revenue in the quarter scaled up 5% to $419 million, driven by higher Used Vehicle sales. Same store New Vehicle sales inched … [visit site to read more]

Best Buy Bull Institutes Three-Legged Options Combination

Posted: 26 Feb 2010 12:01 PM PST

(NYSE:BBY) - Best Buy Co., Inc. - A three-legged bullish options combination took place on the retailer of consumer electronics today. The transaction was likely enacted by an investor expecting significant share price appreciation by expiration in April. Best Buy’s shares were up earlier in the session, but are down 0.50% to $36.69 as of midday on the East Coast. Perhaps shares rallied in morning trading because the firm was initiated as a new 'buy’ with a 12-month target share price of $45.00 … [visit site to read more]

A Propensity To Screw Up

Posted: 26 Feb 2010 12:00 PM PST

Poor Ms. Cosgrove. The Florida woman wrecked her car in 1976. While driving under the Brooklyn Bridge a tarp filled with rainwater fell on it. Then, she lost the $17,500 compensation check from the insurance company.
Her luck seemed to change last week – 33 years later. She found the check in a drawer. But now she discovers two disagreeable things at once – that her insurance company has gone out of business…and the check would be worth barely $5,000 – if she were able to cash it.
What … [visit site to read more]

AmSurg Reports In Line

Posted: 26 Feb 2010 11:57 AM PST

AmSurg Corp's (NASDAQ:AMSG) fourth quarter earnings per share (EPS) came in at 42 cents, meeting the Zacks Consensus Estimate and a penny higher than the year-ago period. For the full year 2009, the company reported an EPS of $1.71 compared to $1.55 in 2008.
 
Revenues for the reported quarter increased 10% to $168.6 million compared to $153.1 million in the year-ago period. The company reported a 1% rise in net earnings to $12.98 million compared to $12.88 million in the fourth quarter of … [visit site to read more]

Eaton Vance Meets View

Posted: 26 Feb 2010 11:43 AM PST

Asset manager Eaton Vance Corp.'s (NYSE:EV) fiscal 2010 first-quarter earnings surged to $46.2 million from $24.7 million in the year-ago quarter, primarily driven by higher fees on its funds amid an ongoing recovery in capital markets.
 
Excluding special items, earnings per share came in at 36 cents, matching the Zacks Consensus Estimate. The company now has either topped or met the Zacks Consensus Estimate in each of the last 4 quarters with an average positive surprise of 11.5%, or 4 … [visit site to read more]

Stone Beats On Higher Volumes

Posted: 26 Feb 2010 11:32 AM PST

Stone Energy Corporation (NYSE:SGY) reported fourth-quarter 2009 earnings of 89 cents per share, beating the Zacks Consensus Estimate of 83 cents and the year-earlier loss of 1 cent. The robust results were driven by increased production volumes and oil prices as well as reduced costs.
 
Estimate Revisions Trend
 
We did not notice any movements in the estimate revisions in the last 7 days and 30 days. The company's earnings surprise for the preceding four quarters varies between … [visit site to read more]

Tenet Downgraded To Neutral

Posted: 26 Feb 2010 11:17 AM PST

Recently, we downgraded Tenet Healthcare Corporation (NYSE:THC) to Neutral with a price target of $5. Our price target is based on 23.8x our 2010 earnings estimate of 21 cents.
 
Although we are pleased with the company's efforts to improve service quality, the competition in the industry is a concern. Furthermore, bad debt expense in the most recent quarter increased $12 million year-over-year on a same-hospital basis. The increase in bad debts could weaken Tenet. Furthermore, Tenet's … [visit site to read more]

The Greek Debt Fallout

Posted: 26 Feb 2010 10:30 AM PST

Greece, already laden with so much debt it can't afford, has delayed its latest bond sale roadshow for US and Asian investors with no rescheduled date offered. Their sovereign debt problem has yet to improve.
A long hopeless-feeling struggle could remind you of Homer's Trojan War. The Greeks spent ten long years failing to siege Troy before they decided to get creative. They erected a horse statue, pretended it was a gift, and used it to sneak enough soldiers inside to open the gates and … [visit site to read more]

Earnings Preview: Earnings Season Almost Complete

Posted: 25 Feb 2010 09:00 PM PST

Earnings Preview 2/26/10
Earnings season is winding down, but that does not mean it is over. Next week will bring 296 earnings reports, though just 11 members of the S&P 500. Some of the higher profile firms to report will be Progressive Insurance (NYSE:PGR), Costco (NASDAQ:COST) and Big Lots (NYSE:BIG).
While the earnings news will be lighter next week than it has been recently, there will be lots of economic data released, starting with data on personal income and spending, both ISM indexes and … [visit site to read more]
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