Apr 1, 2010

Daily Markets - Financial News And Opinions

Daily Markets - Financial News And Opinions

Forex Trading: GBP/USD Targets Double Bottom Peak

Posted: 01 Apr 2010 06:02 PM PDT

Price action on GBP/USD, a daily chart of which is shown, has displayed five consecutive days of significantly bullish price bars following the double-test bounce off support just below 1.4800 late last week. In the process of this bullishness, price currently appears to be targeting resistance around the peak of the potential double-bottom formation, which resides in the 1.5380 price region.

A strong breakout above that peak would confirm the double-bottom formation (a classic reversal … [visit site to read more]


Three Ways To Profit From An Insurance-Sector Rebound

Posted: 01 Apr 2010 05:01 PM PDT

Regional banks, investment bankers and insurance companies will be key winners in the next phase of an advance that will be characterized by very lukewarm participation by the average private investor.

Most investors will be surprised by this turnabout - and especially by the insurance-sector rebound.

Let me show you three ways to profit.

Handicapping the Credit Market Rebound

Brian F. Reynolds, chief market strategist for WJB Capital Group Inc. - and easily the best independent … [visit site to read more]

Feds Scrutinizing Derivatives In ETFs

Posted: 01 Apr 2010 04:01 PM PDT

Last week I told you about political risk in exchange traded funds (ETFs). Almost as if on cue, later that very day, the Securities & Exchange Commission (SEC) announced it is conducting a “review” of ETFs that use derivatives.

What? Derivatives in ETFs? Yes, and it’s nothing new. In fact, the SEC made clear it is also looking into mutual funds for the same thing!

To understand what is happening here, we need to look under the hood of the fund engine for a minute …

“Derivative” … [visit site to read more]

AutoNation Sees Improved Quarter

Posted: 01 Apr 2010 03:17 PM PDT

AutoNation Inc. (NYSE:AN) has projected an improvement in results for the first quarter of 2010 due to a gradual recovery in the industry. The automotive retailer expects to earn 29–32 cents per share from continuing operations in the first quarter of 2010. This is an improvement from 22 cents per share earned in the same quarter a year ago.

AutoNation also expects new vehicle sales to increase 18% to 45,000 units, and used vehicle sales to rise 12% to 38,000 units during the quarter. … [visit site to read more]

HP Ends Patent Dispute With Chinese Co.

Posted: 01 Apr 2010 03:04 PM PDT

Hewlett-Packard Corporation (NYSE:HPQ) has declared that it has reached a settlement with Hong Kong-based Print-Rite Holdings Ltd.

In accordance with the terms of the settlement, Print-Rite will accept HP's patent related to HP 02 inkjet cartridges. To give effect to this decision, Print-Rite has issued an order for the removal of all those Print-Rite products products that were involved in the dispute from the United States and other countries having corresponding patent filings.

The … [visit site to read more]

Economics And Canadian Economic Policy With Kevin Carmichael Of The Globe And Mail

Posted: 01 Apr 2010 03:01 PM PDT

Kevin Carmichael writes about economics and economic policy for the Globe and Mail

Q: Mr. Carmichael, given the plethora of statistics and opinions that you are privy to, what is your take on the Canadian economy going forward? Are there any areas of the economy that are showing signs of unexpected weakness or are there any areas of the economy that are showing signs of unexpected strength?

A: I’d like to say off the top that I’m more of a spender than an investor, so nothing I … [visit site to read more]

National Income Decline: Time To Put Your Kids To Work?

Posted: 01 Apr 2010 03:00 PM PDT

The fact is that Social Security is seemingly doomed, as, for the first time, this year more money will be paid out to beneficiaries than will be collected from workers.
I am trying not to laugh as I tell you this, but a lot of people are idiotically-unaware that this is a lot of bad news for many reasons, one of which being that the federal government has always spent all those excess Social Security contributions of the last half century or so, by simply taking the money and exchanging some … [visit site to read more]

A Swell In Risk Appetite And Strong Manufacturing Data Drive Crude To New 17-Month Highs

Posted: 01 Apr 2010 02:51 PM PDT

Having spent so much time posturing and threatening to forge ahead and break to new highs, crude oil finally overwhelmed its psychological barriers with a rally that drove the market to levels not seen in 17 months. While this drive was clearly driven by a consistent drive in risk appetite, sentiment was itself backed by a promising turn in event risk.
North American Commodity Update

Commodities - Energy

Crude Oil (LS NYMEX) -  $85.04 //  $1.28 //  1.53%
 
Having spent so … [visit site to read more]

Cypress Q4 Loss Narrows

Posted: 01 Apr 2010 02:44 PM PDT

Cypress Bioscience, Inc. (NASDAQ:CYPB) reported a net loss of 13 cents per share in the fourth quarter, including the impact of a $1.1 million goodwill impairment charge associated with the company's personalized medicine services business. Excluding this charge, net loss came in at 10 cents, much better than the year-ago loss of 19 cents and the Zacks Consensus Estimate of -13 cents.

Despite a significant increase in full year 2009 revenues, net loss for the full year increased to 74 cents, … [visit site to read more]

Daily ETF Roundup: HYG Slides, GDX Continues Surge

Posted: 01 Apr 2010 02:34 PM PDT

The second quarter got off to a good start on Thursday, as most equity markets headed higher on strong manufacturing data and signs that economies of the U.S., Europe, and China continue to show strength. Volume was surprisingly heavy ahead of a highly-anticipated government jobs report due out Friday morning. Expectations have soared, with investors expecting the first monthly gain in payrolls in more than two years. Elsewhere, weak earnings from Research in Motion held the technology sector … [visit site to read more]

Video: Transportation Dept. Proposes Nationwide Ban Commercial Vehicle Text Messaging Ban

Posted: 01 Apr 2010 02:24 PM PDT

The Transportation Department announced that it is proposing a nationwide ban on text messaging while being behind the wheel of interstae commericial trucks and buses. … [visit site to read more]

MBT Hit By Hefty Write-offs

Posted: 01 Apr 2010 02:20 PM PDT

Mobile TeleSystems (NYSE:MBT), Eastern Europe's largest cellular operator, reported disappointing results for fourth-quarter 2009. The carrier reported a net loss of $26.1 million (or 7 cents per ADS) versus a net profit of $171.2 million in the year-ago quarter. The prior-year quarter's figures were restated by the carrier to include the results of its subsidiary Comstar-UTS, a leading telecom solutions provider in Russia and the CIS (Commonwealth of Independent States).

Fourth quarter … [visit site to read more]

Video: NYSE Closing Bell Market Monitor: F, BGP, PRI, XOM

Posted: 01 Apr 2010 02:18 PM PDT

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]

Video: Crude Prices Reach 2010 Highs

Posted: 01 Apr 2010 02:05 PM PDT

Front month crude prices traded at their highest levels for the year on positive US jobs and manufacturing data. … [visit site to read more]

Health Reforms Impact Eaton

Posted: 01 Apr 2010 02:01 PM PDT

Eaton Corporation (NYSE:ETN) announced the addition of a $25 million charge to its first quarter results due to the recently passed health care legislation. The charge in the form of a one-time income tax expense relates to the retiree drug coverage subsidy.

The new Health Care and Education Reconciliation Act of 2010 was passed by the Obama administration to fix the loopholes in previous health care legislation. The new law prohibits the businesses from writing off of deferred income tax assets … [visit site to read more]

Stock Trading: Using RSI To Time Entry And Exit Points

Posted: 01 Apr 2010 02:01 PM PDT

Over the past few weeks I’ve written more and more about technical analysis methods here in Small Cap Investor Daily. I feel it’s incredibly important for independent investors to have a solid set of tools to help evaluate potential investments. Otherwise we’re just following what other people are saying without using our own brains, a sure-fire way to lose money. Independent investors need to think for themselves, and act according to their own research.

So today I want to talk about … [visit site to read more]

AT&T Expands U-verse Internet

Posted: 01 Apr 2010 01:40 PM PDT

AT&T (NYSE:T) has reportedly expanded the footprint of its U-verse high-speed Internet access services to cover all its U-verse markets. The carrier's "Max Turbo” high-speed Internet services are now available in 120 markets across 22 states.

AT&T broadened its U-verse Internet services with the launch of Max Turbo in late 2009. The service offers peak downlink and uplink speeds of 24 megabits per second (Mbps) and 3 Mbps, respectively. Max Turbo was initially launched for residential … [visit site to read more]

UBS Launches Alerian MLP Infrastructure Index (MLPI)

Posted: 01 Apr 2010 01:29 PM PDT

The first quarter of 2010 was one of the most active periods in recent memory for the ETF industry. Approximately 60 new funds hit the market during this three month period, continuing the impressive expansion and innovation that has become standard in a space that has huge potential (see the March ETF Roundup). This trend looks to continue in the second quarter of the year, as UBS announced today the launch of the E-TRACS Alerian MLP Infrastructure Index (MLPI).
MLPI is designed to track the … [visit site to read more]

GM Recalls Heavy-Duty Vans

Posted: 01 Apr 2010 01:20 PM PDT

General Motors ("GM”) will recall about 5,000 heavy-duty vans due to their faulty alternators. Alternators are used in automobiles to charge the battery and to power a car’s electric system when its engine is running. The models under recall include Chevrolet Express and GMC Savana.

The automaker has suspended sales and production of the affected heavy-duty van models until the problem is fixed. It has also urged its customers to stop driving vehicles manufactured in February and … [visit site to read more]

KMP Downgraded

Posted: 01 Apr 2010 01:00 PM PDT

We have recently downgraded Kinder Morgan Energy Partners L.P. (NYSE:KMP) to Underperform from Neutral. Although the partnership's annualized distribution rate is higher than the industry rate ($4.20 vs. $3.47 per unit) and it expects a 4.8% growth for this year, we are concerned about the sustainability of this growth momentum in the long run.
 
This is because the partnership's above-average distribution growth profile is closely linked with a successful completion of organic growth … [visit site to read more]

BRE Offers Common Shares

Posted: 01 Apr 2010 12:45 PM PDT

BRE Properties (NYSE:BRE), a leading real estate investment trust (REIT), has recently announced plans to offer 5 million common shares to raise cash and repay debt. The company will also grant the underwriters a 30-day option to purchase an additional 750,000 shares to cover any over-allotments. BofA Merrill Lynch and Wells Fargo Securities are acting as joint book-running managers for the public offering. 

BRE Properties intends to utilize the proceeds from the offering to reduce debt … [visit site to read more]

China’s Search Engine Giant Baidu - A Timely Chinese Opportunity

Posted: 01 Apr 2010 12:31 PM PDT

The global economic expansion continues apace, albeit not without hiccups and setbacks focused around the PIIGS group of nations.  There, we recently saw trouble manifest in Fitch Ratings Agency’s downgrade of Portuguese sovereign debt (from AA to AA-), an event that brought European bourses under pressure for all of three minutes, after which they continued to climb as before.

So, too, with the latest round of negotiations in the ongoing saga of Greece and her (relatively) unhealthy BBB+ … [visit site to read more]

Macarthur Declines Peabody Bid

Posted: 01 Apr 2010 12:30 PM PDT

Australia's Macarthur Coal Limited declined Peabody Energy Corporation's (NYSE:BTU) takeover bid of $3.0 billion, saying it undervalues the company and its growth prospects. 

Macarthur holds 145 million tons of reserves of low-volatile pulverized coal injection (PCI) coal and 1.3 billion tons of resources. It has a current production capacity of more than 5 million tons per year. 

Peabody already owns nine coal operations in the Australian states of Queensland and New South Wales … [visit site to read more]

Tower’s 1Q10 Catastrophe Loss Ests

Posted: 01 Apr 2010 12:15 PM PDT

Property and casualty insurer Tower Group Inc (NASDAQ:TWGP) today announced its estimation for first quarter 2010 catastrophe loss. The company approximated a total after-tax catastrophe loss from the northeast storm in the range of $7.2 million to $9.1 million according to preliminary estimates. 

Prior to this, the company had suffered from Hurricane Ike that occurred in the third quarter of 2008, in the Gulf of Mexico area, causing $1.8 million in net losses. 

Catastrophe losses … [visit site to read more]

AngioDynamics Beats Zacks Estimate

Posted: 01 Apr 2010 12:00 PM PDT

AngioDynamics, Inc. (NASDAQ:ANGO) recently reported third quarter fiscal 2010 earnings per share of 13 cents that beat the Zacks Consensus Estimate of 12 cents and the year-ago earnings of 8 cents. 

Sales 

Total revenues in the third quarter increased 6% year over year to $52.2 million. Peripheral Vascular sales increased 8% year over year to $22.4 million. Growth was led by higher sales of VenaCure EVLT, Benephit targeted renal therapy systems, and Micro-Introducer … [visit site to read more]

End Of A QE Era

Posted: 01 Apr 2010 11:56 AM PDT

- Can you feel it? The world is in a different place this morning.
Yes, the sun is still shining, birds still chirp and the hype over Apple's iPad is still building beyond an already insufferable level. Your world may appear normal. But there's a qualitative difference to the economy today, brought on by the absence of "quantitative easing," or QE — our favorite acronym of 2010.
Under the program, the Federal Reserve graciously bought $1.25 trillion of mortgage-backed securities from … [visit site to read more]

Concur Raises Debt

Posted: 01 Apr 2010 11:45 AM PDT

Concur Technologies Inc (NASDAQ:CNQR) announced pricing of $250 million aggregate principal amount of 2.5% convertible senior notes due in 2015. 

The company also granted a green-shoe option to subscribers up to an additional $37.5 million aggregate principal amount of notes primarily to cover over-allotments.
 
The notes have an initial conversion rate of 19.10 shares of common stock for every $1,000 principal amount of notes. This represents an initial effective conversion price of … [visit site to read more]

The U.S. And The Risk Of Default: Where Is The Breaking Point?

Posted: 01 Apr 2010 11:40 AM PDT

In February 19, 2010 Wall Street Journal, Daniel Henninger included the following chart in his column.

Federal spending has grown seven times the real median household income over the last 40 years. At some point, the government will be unable to pay for all the new programs, stimulus, healthcare, rapid expansion in number of government employees, etc. The market will drive up the cost of debt to levels that lead to default. Many say it cannot happen to the U.S.

There is a lot of … [visit site to read more]

The New Abnormal

Posted: 01 Apr 2010 11:32 AM PDT

- You know that market sentiment has reached a euphoric extreme when nearly every presenter at a Grant's Conference is bullish. This conference is known for attracting speakers with a more bearish slant than you would normally find in mainstream finance.
Yet the mood in the ballroom at New York's Plaza Hotel last week was much more upbeat than the last time I was there, in October 2008. At that point, equity investors were convinced that there was no way the Federal Reserve stimulus efforts … [visit site to read more]

Flir Systems Gets Order

Posted: 01 Apr 2010 11:30 AM PDT

FLIR Systems Inc. (NASDAQ:FLIR) announced that it has obtained a $13.5 million order from Naval Surface Warfare Center (NSWC), Crane Division for its BRITE Star® II multi-sensor target designation systems.
 
The units delivered under this order will be used by the U.S. Marine Corps and U.S. Navy for various missions. 

The company produces invisible infrared cameras and night vision technology, which is used at all American airports. FLIR’s equipment is also used to protect nuclear … [visit site to read more]

Neutral On Int’l Game Tech

Posted: 01 Apr 2010 11:11 AM PDT

International Game Technology (NYSE:IGT) holds a leadership position in slot machines. In January, the company reported adjusted earnings of 23 cents per share in the first quarter of 2010, beating the Zacks Consensus Estimate of 20 cents a share. This was due to increased cost cutting and higher sales of replacement slots.
 
The quarter benefited from increased North American replacement units compared to the prior-year quarter, large-scale deployment of the sbX platform and … [visit site to read more]

The Diagnostics Industry: Why Healthcare Reform Should Help These Companies

Posted: 01 Apr 2010 11:07 AM PDT

Thursday, April 1, 2010: Issue #1229
America seems to be divided into two camps…

Not blue states versus red states.
Not Yankees fans versus Red Sox fans (although why you'd be the latter I'll never understand).
Not even people who support the new healthcare reform bill versus those who are opposed to it.

Rather, I'm talking about the difference between people who run to the doctor for every little ache and pain, compared with those who wouldn't go within 50 yards of a doctor's … [visit site to read more]

The Rise And Fall Of Hard Money

Posted: 01 Apr 2010 11:05 AM PDT

Now that nearly a century has elapsed, most current analysis of the Great Depression is predicated upon Keynesian and Monetarist intellectual perspectives, largely focusing upon what happened in the 1930s. By editorial omission, the turbulence of the First World War and its aftermath might even be imagined to be serene by students unfamiliar with it, in comparison to the hardship of the Roosevelt years. But what happened in the interwar period was extraordinary.
Certainly in the 19th century … [visit site to read more]

Bullish Options Traders Rev Their Engines After Ford Reports Surge In Q1 Sales In China

Posted: 01 Apr 2010 11:02 AM PDT

Ford Motor Co. (NYSE:F) - The Dearborn, MI-based automaker’s shares recovered a portion of the previous session’s 5.5% decline today after the company said its sales in China surged 84% in the first quarter on increased demand for passenger cars and commercial vehicles. Ford’s shares are currently trading 2.4% higher on the day to stand at $12.87 as of 11:55 am (ET). One bullish options player employed the use of a debit call spread in the May contract in order to position for continued share … [visit site to read more]

BHI-BJS Merger Approved

Posted: 01 Apr 2010 10:55 AM PDT

Shareholders of Baker Hughes Inc. (NYSE:BHI) and BJ Services Company (NYSE:BJS) approved the proposed merger between the two companies. Both the companies declared the news yesterday following their special meetings of shareholders. 
 
In August 2009, Baker Hughes agreed to acquire BJ Services in a cash and stock deal valued at $5.5 billion. Under the agreement, for each share of BJ Services common stock, holders will receive 0.40035 shares of Baker Hughes and cash of $2.69. The agreement … [visit site to read more]

Abaxis Remains Neutral

Posted: 01 Apr 2010 10:40 AM PDT

We recently reiterated our 'Neutral' rating on Abaxis, Inc. (NASDAQ:ABAX) with a target price of $28, based on a P/E of 34.1x our fiscal 2011 EPS estimate of 82 cents. Abaxis' results for the third quarter fiscal 2010 were mixed.
 
Earnings per share for the third quarter was 15 cents, below the Zacks Consensus Estimate of 17 cents. However, earnings was flat on a year-over-year basis.
 
Total revenue in the third quarter increased 15% year over year to $31 million, fueled by higher … [visit site to read more]

ISM Reaches 6-Year High

Posted: 01 Apr 2010 10:27 AM PDT

The Institute for Supply Management's (ISM) manufacturing survey rose to a reading of 59.6 from 56.5 in January, an increase of 3.1 points and above the 57.0 reading that was expected. Any reading over 50 indicates that the manufacturing economy is expanding, so this is a very strong reading, indicating that the manufacturing economy is not only expanding but doing so at an accelerating rate relative to February.

And it is at the highest level so far in this economic cycle. It is also a huge … [visit site to read more]

Xcel Enters Power Purchase Deal

Posted: 01 Apr 2010 10:23 AM PDT

Xcel Energy Inc. (NYSE:XEL), through its subsidiary Public Service Company of Colorado (PSCo), entered into a power purchase agreement (PPA) with Renewable Energy Systems Americas Inc. (RES Americas). Under the agreement, PSCo will buy 252.2 megawatts (MW) of power from RES America's Cedar Point Wind project for a 20-year term.
 
Located primarily in Lincoln and Elbert Counties, Colorado, the Cedar project is expected to provide the benefits of both renewable energy and job creation to the … [visit site to read more]

Video: Market Movers: BGP, ANN, FL, BLK, GPS, RIMM

Posted: 01 Apr 2010 10:13 AM PDT

The latest news and information on U.S. stocks that are moving the market. … [visit site to read more]

Expansions Drive Celanese Growth

Posted: 01 Apr 2010 10:07 AM PDT

Celanese Corp. (NYSE:CE), a leading global chemical company, and Saudi Basic Industries Corporation are planning to construct a polyacetal production facility in Saudi Arabia through its joint venture National Methanol Co. The joint venture produces methanol, which is a key raw material in polyacetal production, as well as methyl tertiary-butyl ether.
The joint venture was formed between Celanese, Saudi Basic Industries and Duke Energy Corporation in 1981. Saudi Basic Industries − a chemical, … [visit site to read more]

Video: Risk Appetite Strong On Economic Data

Posted: 01 Apr 2010 10:01 AM PDT

An improvement in ISM manufacturing figures & initial jobless claims paved the way for a rise in risk appetite this session. … [visit site to read more]

Mr. Market Fantasy

Posted: 01 Apr 2010 09:31 AM PDT

- "Dear Mister Fantasy play us a tune. Something to make us all happy." When Stevie Winwood sang these lyrics in 1967, your 7-year old California editor took them at face value. The lyrics felt soothing and magical. Today, those same lyrics feel like a grim ode to U.S. fiscal policy.
Back in 1967, President Johnson was just getting the hang of raising taxes and redistributing the nation's wealth.  43 years later, President Obama has mastered the art. Obama is not unique among … [visit site to read more]

Forex Trading: USDCHF Rallies Strongly On The Intervention

Posted: 01 Apr 2010 09:23 AM PDT

The USDCHF moved sharply higher on the SNB rumored intervention .  The price top?  The top stopped at the 100 hour MA at 1.6011. The high reached 1.0610.  HMMM.  Well although the move was too fast for me, other participants had the 100 hour MA level in mind and seems to have gladly offered the market down from the level. 
Now with the intervention out of the way, the floor is set for the USDCHF and the EURCHF. The USDCHF moved to a low of 1.0434. The EURCHF floor came … [visit site to read more]
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