Mar 26, 2010

Daily Markets - Financial News And Opinions

Daily Markets - Financial News And Opinions

A Funny Thing Happened On The Way To The Exit…U.S. Mortgage Rates Fell

Posted: 26 Mar 2010 12:01 PM PDT

We have highlighted the unusual negative swap spread relationship in the fixed income market. The inversion continued down the curve to the 7 year maturity - which makes the 7 year auction even more important. The message from the markets is clear -Uncle Sam is a worse credit than those evil CEOs. Taking a step deeper into the pool, we view the strength in swaps (lower yield) as a sign investors are still betting the Government is the ultimate put option.

Has the Greenspan Put become the … [visit site to read more]


CA Completes 3Tera Acquisition

Posted: 26 Mar 2010 11:51 AM PDT

Leading information technology (IT) management software company CA Inc. (NASDAQ:CA) has finally declared the completion of the acquisition of a cloud computing company 3Tera Inc. This is the second acquisition that the company has completed, since the Nimsoft Corp. acquisition that was closed on March 17. 

We believe that 3Tera is a good pick by CA. The company enables enterprises and service providers to provision, deploy and scale public and private cloud computing environments, while … [visit site to read more]

Accenture Misses Expectations

Posted: 26 Mar 2010 11:36 AM PDT

Accenture Plc. (NYSE:ACN) reported second quarter 2010 EPS of 60 cents, missing the Zacks Consensus Estimate of 61 cents. 

Revenue 

Accenture reported second quarter 2010 total revenue of $5.54 billion, down 2.1% from $5.66 billion reported in the year-ago quarter. The company witnessed a revenue decline in most of its operating groups, with Communication & High Tech revenue declining 7.0% from the year-ago quarter. 

Financial Services revenue was up 11.0% year-over-year in … [visit site to read more]

Shareholders OK WIN-IWA Deal

Posted: 26 Mar 2010 11:21 AM PDT

Windstream Corporation's (NYSE:WIN) acquisition of Iowa Telecom (NYSE:IWA) has been reportedly approved by Iowa's shareholders. The transaction, which is now subject to approvals of federal and state regulators, is expected to close in mid-2010.
 
Windstream announced its acquisition of Iowa Telecom for $1.1 billion in November 2009. Iowa Telecom is a small local exchange carrier providing wireline services in rural Iowa, Minnesota, and Missouri. Per the agreement, Windstream will pay Iowa … [visit site to read more]

American Medical Stays At Neutral

Posted: 26 Mar 2010 11:05 AM PDT

We recently reiterated our 'Neutral' recommendation on American Medical Systems Holdings, Inc. (NASDAQ:AMMD) with a target price of $20 based on a P/E of approximately 16.4x our fiscal 2010 EPS estimate of $1.22.
 
American Medical reported fourth-quarter earnings per share of 35 cents, surpassing the Zacks Consensus Estimate of 34 cents and the year-ago earnings of 26 cents. For fiscal 2009, earnings per share were $1.09, ahead of 70 cents, a year-ago.
 
Total revenue in the fourth … [visit site to read more]

Final Q4 GDP Revised Down To 5.6%

Posted: 26 Mar 2010 11:04 AM PDT

Where the Growth Came From

This is essentially the same report as was posted when the first and second cuts at the 4th Quarter GDP numbers came out, but with the revised contributions to growth shown, the numbers from the first two releases are in parentheses, with the second revisions numbers first and in italics. The final numbers are outside the parentheses and are in bold. This will allow you to quickly assess what has changed in this report relative to the first and second iterations, and … [visit site to read more]

ETFs To Play The Wi-Fi Craze

Posted: 26 Mar 2010 11:01 AM PDT

With competition in the mobile phone world robust, consumers seeking to save money and mobile phone carriers dealing with network congestion, mobile handsets that offer wi-fi capabilities are increasing in popularity.

Once considered as only an add-on feature, consumers are starting to use wi-fi capabilities as the differentiator between mobile phone choices and are likely to remain so.  According to a recent research report, nearly 55% of all smartphones shipped in 2009 had wi-fi … [visit site to read more]

Three Reasons Why The Financial ETF (XLF) Is Soaring

Posted: 26 Mar 2010 10:56 AM PDT

Financial shares were among the hardest hit during the "Great Recession" that began in late 2008 when many institutions crumbled under the weight of massive debts. The crisis caused many casualties and lead to significant restructuring in the industry, as former foes became partners in a variety of financial niches. Although many financial companies lagged behind the broad market for quite some time, the survivors have made an impressive push in recent months. Bank of America (BAC) is up … [visit site to read more]

St. Jude Gets Australian Approval

Posted: 26 Mar 2010 10:49 AM PDT

St. Jude Medical, Inc. (NYSE:STJ) recently received regulatory and reimbursement approval from the Australian Therapeutic Goods Administration (TGA) for its Brio deep brain stimulation (DBS) system for treating the symptoms of Parkinson's disease.
The Brio deep brain stimulation system is the smallest, longest-lasting rechargeable DBS system in the world. The device has a 10-year battery life, which is considered to be the longest of any rechargeable DBS device presently available in the … [visit site to read more]

Social Security Makes History With Negative Cashflow

Posted: 26 Mar 2010 10:37 AM PDT

The US government is going broke.
An item in The New York Times tells us that for the first time in its history, this year the Social Security program is turning cashflow negative. Social Security "surpluses" were the source of the Clinton administration's claim to have been running a balanced budget. Well, it was balanced…if you counted the excess Social Security contributions.
But now the Social Security system is running in the red, just like everything else. And now the government … [visit site to read more]

Qwest Seeks Federal Funds

Posted: 26 Mar 2010 10:32 AM PDT

Qwest Communications (NYSE:Q) has reportedly applied for federal stimulus funding to beef up broadband network access in the rural regions across 14 US states. The fourth-largest US phone company is seeking $350 million in grants from the "Broadband Initiatives Program (BIP)” administered by the US Department of Agriculture's (USDA) agency Rural Utilities Service.
 
The BIP program, which is part of the federal government's $7.2 billion broadband stimulus package, is aimed at promoting … [visit site to read more]

AAR Acquires Aviation Worldwide

Posted: 26 Mar 2010 10:15 AM PDT

AAR Corp. (NYSE:AIR) has decided to acquire Aviation Worldwide Services, a leading provider of expeditionary airlift services and aircraft modifications for the U.S. and other governments, from Xe Services LLC for $200 million. The acquisition is expected to close by April 2010.
 
Management expects the acquired business to be accretive to earnings and margins in its first year of ownership and generate $175 million of revenue on an annual basis. 

Through this acquisition AAR is … [visit site to read more]

Video: Market Movers: RSH, BBY, URBN, ANN, PMI, RDN

Posted: 26 Mar 2010 10:09 AM PDT

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

Video: Risk Appetite Rises As Week Closes

Posted: 26 Mar 2010 10:02 AM PDT

Risk appetite continued to surge this session following news of a proposed bailout for Greece and a rise in US consumer confidence. … [visit site to read more]

FDA Approval For Xifaxan

Posted: 26 Mar 2010 10:00 AM PDT

Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) received a huge boost recently with the US approval of Xifaxan 550 mg. The Food and Drug Administration (FDA) granted approval for the use of Xifaxan 550 mg in reducing the risk of the recurrence of overt hepatic encephalopathy (HE) in adult patients.
 
The approval was in-line with expectations as the drug had received a favorable recommendation from the FDA's Gastrointestinal Drugs Advisory Committee in Feb 2010.
 
The additional indication … [visit site to read more]

Forex Trading: GBPUSD Stalls At 100 And 200 Bar MA On 5 Minute Chart

Posted: 26 Mar 2010 09:52 AM PDT

The GBPUSD has stalled at the 100 and 200 bar MA support on the 5 minute chart.   The 1.4859 is also support which is the 50% of the move up from the low to the high.  A break below the 1.4859 will be needed to extend the downside move (1.4836 target).  Above, the 1.4892 level (see red line above) is the upside resistance … [visit site to read more]

Consent Decree Likely For GENZ

Posted: 26 Mar 2010 09:45 AM PDT

Just when Genzyme Corp. (NASDAQ:GENZ) was slowly making some progress in addressing its manufacturing issues, the company announced that the US Food and Drug Administration (FDA) intends to take enforcement action related to the company's manufacturing facility at Allston Landing. 

The FDA has decided to adopt this course so as to ensure that the products manufactured at the Allston Landing manufacturing facility are made in compliance with good manufacturing practice regulations.
 
It … [visit site to read more]

African Barrick- Take Hold

Posted: 26 Mar 2010 09:30 AM PDT

Barrick Gold Corporation (NYSE:ABX) has raised about $834 million from spinning off African Barrick Gold plc through an initial public offering. Barrick has offered about 101 million shares priced at $8.8 (575 pence), at the lower end of the expected price range of $8.6 to $10.1(550 pence to 650 pence). 

Toronto-based Barrick has divested about 25% of the new African Barrick Gold and has retained the rest. The company will continue to hold a 75% equity interest in African Barrick, or about … [visit site to read more]

Gerdau Relies On Industrials

Posted: 26 Mar 2010 09:15 AM PDT

Recently, Gerdau S.A. (NYSE:GGB) posted results for the fourth quarter and 2009. Gerdau recorded a net income of R$643.5 million (US$367.7 million) in the quarter compared to R$655.1 million (US$348.5 million) in the previous quarter. EPS was R$0.45 or 26 cents compared to R$0.46 or 24 cents in the previous quarter. Reported EPADR surpassed the Zacks Consensus Estimate of 20 cents.
 
During 2009, net income was R$1,004.5 million (US$499.8 million), down from R$4,945.0 million (US$2,687.5 … [visit site to read more]

The “Oil Of The 21st Century”… And How “Blue Gold” Can Make You Rich

Posted: 26 Mar 2010 09:01 AM PDT

by Martin Denholm, Senior Editor, Investment U
As I write to you, I'm sipping on the world's most essential commodity.
It is, of course, water.
I say "of course," but despite its critical importance to every single human being, the water industry is shamefully neglected. On Monday, March 22, for example, World Water Day came and went with barely a mention from the media, despite the industry's mounting problems.
I confess… like many other people, I take the availability of water for … [visit site to read more]

Ameriprise Downgraded To Neutral

Posted: 26 Mar 2010 08:56 AM PDT

Given the current critical sustainability factor, we are downgrading our recommendation on the shares of Ameriprise Financial Inc. (NYSE:AMP) to Neutral from Outperform. Although the company's third quarter earnings were significantly ahead of the Zacks Consensus Estimate, concerns related to sluggish equity markets, higher tax expense projections for 2010 and significant cost of maintaining high liquidity levels resulted in a cautious growth outlook for the near term.
 
Moreover, weak … [visit site to read more]

Forex Trading: USDCAD Tests 38.2% Retracment At 1.0296

Posted: 26 Mar 2010 08:41 AM PDT

The 38.2% retracement of the move down from the February 25th high to the March 19th low comes in at 1.0296.  The price is up testing the retracement level and so far is finding the expected profit taking sellers.   A move back above will  look to target the 1.0320 level which is the high from March 11th

Support comes in at 1.0264 now. The 38.2% of the days range comes in at the level and the 100 bar MA on the 5 minute chart is moving up toward that … [visit site to read more]

Morning Stock Market Movers: UnitedHealth Group, Arena Pharmaceuticals, Finish Line

Posted: 26 Mar 2010 08:41 AM PDT

Finish Line Inc. (NASDAQ:FINL) - Brand-name athletic footwear and apparel retailer, Finish Line Inc., attracted bullish options investors this morning as shares of the underlying stock exploded 12.55% to the upside to reach a new 52-week high of $16.50. Shares of the Indianapolis-based company surged after Finish Line reported fourth-quarter sales of $374.5 million, which exceeded average analyst estimates of $346.2 million. Bullish options players purchased debit call spreads on the stock to … [visit site to read more]

Tellabs Wins Mobile Core Contract

Posted: 26 Mar 2010 08:39 AM PDT

Tellabs Inc. (NASDAQ:TLAB) received a new contract for its SmartCore 9100 ASN Gateway from Clearwire Corp. (NASDAQ:CLWR) for the latter's WiMAX deployment in Spain. Clearwire already used Tellabs' SmartCore 9100 platform for its ongoing nationwide 4G WiMAX network deployment in the U.S. The company has now decided to expand its presence in Europe.  
 
Tellabs introduced its SmartCore 9100 ASN Gateway as a result of its acquisition of WiChorus. We believe the acquisition of WiChorus will be … [visit site to read more]

Media ETF (PBS) Surging Ahead

Posted: 26 Mar 2010 08:29 AM PDT

One recurring investment theme in 2010 has been the recovery of industries that were slammed during the most recent downturn. Financials and homebuilders are among the top performers of 2010, continuing to claw back ground lost in recent years. Another sector experiencing a similar "bounceback" is the media industry. Many analysts predicted a slow and steady death driven by decreased subscription rates for newspapers and drastic reductions to advertising budgets for television programing. … [visit site to read more]

Video: Oracle Unveils Strong 3Q EPS

Posted: 26 Mar 2010 08:27 AM PDT

Oracle announced late Thurday that its posted stronger-than-expected 3Q results that beat Wall Street expectations. … [visit site to read more]

CNOOC’s LNG Deal

Posted: 26 Mar 2010 08:21 AM PDT

CNOOC Ltd. (NYSE:CEO) has signed an agreement with BG Group of Australia for the purchase of liquefied natural gas (LNG) from Queensland Curtis LNG (”QCLNG”) facility on Curtis Island, Australia. As per the agreement, CNOOC will purchase 3.6 million tons of LNG annually for next 20-year period. CNOOC will also become a 10% equity investor in QCLNG liquefaction Train 1.
 
In addition, CNOOC will buy 5% of BG's interest in the coal-seam gas (also known as coal-seam methane) reserves and … [visit site to read more]

Australian Dollar: The Downside Prevails

Posted: 26 Mar 2010 08:17 AM PDT

Update on supports and resistances. … [visit site to read more]

Canadian Dollar: The Downside Prevails

Posted: 26 Mar 2010 08:17 AM PDT

Update on supports and resistances. … [visit site to read more]

Traders Flee The Euro As EU Summit Begins

Posted: 26 Mar 2010 08:17 AM PDT

Fundamentals
Bears are running rampant in the Euro, as the beleaguered currency has fallen to 10-month lows vs. the U.S. Dollar as investors move to safer havens ahead of a meeting by European Union officials. Many traders fear that there will not be any consensus by EU leaders as to how to deal with the financial turmoil in Greece, with talk now centered on a possible bail-out involving the International Monetary Fund (IMF). If this were not enough to send investors out of the Euro, Fitch … [visit site to read more]

EUR/USD Trades Higher After EU Compromise

Posted: 26 Mar 2010 08:12 AM PDT

The EU followed through with what has been discussed earlier this week.  The EU and IMF both agreed to step in if Greece is not able to acquire sufficient funds in the open market.  However, although today’s upward movement is encouraging, it is not the type of action bulls were looking for.  The EUR/USD still appears to be lodged in its downtrend, signaling that investors aren’t quite convinced that this is an end-all solution for EU debt issues.

After all, Portugal was downgraded by … [visit site to read more]

Video: Asian Markets Positive To Close Week

Posted: 26 Mar 2010 08:08 AM PDT

The major Asian/Pacific markets were on the upside this session folowing a turnaround in domestic shares. … [visit site to read more]

Zions Sets Exchange Ratio For Notes

Posted: 26 Mar 2010 08:03 AM PDT

On Thursday, Zions Bancorporation (NASDAQ:ZION) announced the exchange ratios for swapping its common stock to its outstanding non-convertible subordinated notes.
Deutsche Bank Securities Inc., a wing of Deutsche Bank AG (NYSE:DB) and Goldman, Sachs & Co., a wing of Goldman Sachs Group Inc. (NYSE:GS), acted as Zions' financial advisors in connection with the exchange offer. The offer will expire at the end of March 26.
 
Accordingly, Zions has offered three series of its subordinated notes for … [visit site to read more]

Trends In Gold, 10 Year Treasury Yields, And Crude Oil Remain Extreme

Posted: 26 Mar 2010 08:03 AM PDT

Our composite indicator that assesses the strength in the trends of gold, 10 year Treasury yields, and crude oil will remain in the extreme zone by the end of the week. This represents a headwind for equities.

Figure 1 is a weekly chart of the S&P500 and the indicator is shown in the lower panel. If you had been so smart to only “buy” the S&P500 during those times when the indicator was extreme, then you would get those trades seen in figure 1. Winning trades are in green; the losing … [visit site to read more]

Forex Trading: USDJPY Caught In The Dollar Selling

Posted: 26 Mar 2010 07:59 AM PDT

The USDJPY continues its choppy trade as the price back below the 100 and 200 bar MA levels.  The failure to extend to the highs from yesterday and the move back below 92.72 (close from yesterday helped from a technical perspective. Needless to say the pair is up and down today, testing the downside, the the topside and now tilting back to the bottom.  The 90.34 level will be eyed as the equivalent of the 92.72 level above.  The level is … [visit site to read more]

Despite Intraday Bounce, Gold’s Unable To Break Through $1100/oz

Posted: 26 Mar 2010 07:57 AM PDT

Gold’s intraday bounce has been negated by the psychological $1100/oz area as risk aversion persists around the FX markets.  The Dollar is currently appreciating across the board, most notably against the Yen and Aussie.  A resolution in the EU regarding Greece hasn’t managed to quell uncertainty thus far with a limited impact in the EUR/USD.  Hence, the Dollar continues to have upward momentum working in its favor, a negative for gold due to their usual negative correlation.

Meanwhile, … [visit site to read more]

Video: NYSE Opening Bell Market Monitor: RSH, BBY, EAT

Posted: 26 Mar 2010 07:51 AM PDT

The latest in news, commentary, and information on what’s moving the US equities markets. … [visit site to read more]

Muni Bond ETFs: New York Vs. California

Posted: 26 Mar 2010 07:42 AM PDT

With interest rates near record lows and expected to remain there for the foreseeable future, many investors have begun searching for alternatives to Treasuries that offer more attractive yields (see Five Bond ETFs For Yield-Hungry Investors). Junk bonds and [[closed-end funds]] have been popular choices, but some investors in higher tax brackets have embraced municipal bonds for their potential tax efficiencies; the interest payments on these bonds are exempt from federal taxes (and in many … [visit site to read more]

Forex Trading: EURUSD Eyes 100 Hour MA And 50% Retracement Of Week Range

Posted: 26 Mar 2010 07:17 AM PDT

100 hour MA comes in at 1.3415 and the 50% retracement at 1.3418.  The first move up on the back of Portugal news and also comments from Greek PM sent the price up to the 1.3411, but sellers entered against the upside resistance levels.  Level remains a key resistance level with a break targeting 1.3454. On the downside support at 1.3382 and   … [visit site to read more]
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