Las Vegas Sands’s (NYSE:LVS) Sands China Ltd. is under investigation by Hong Kong Securities and Futures Commission for alleged breaking of regulations, after parent company Las Vegas Sands is being investigated by U.S. regulators.
This is an extension of the investigation by the U.S. Securities and Exchange Commission and Justice Department, announced earlier in March, where they asked for documents related to Sands China's compliance with the Foreign Corrupt Practices Act.
Sands China said in a statement that they have been “requested to produce certain documents” in relationship to that.
If there is a breach in the Foreign Corrupt Practices Act, it would mean a company based in the U.S. would have offered some type of payment to foreign officials for the purpose of keeping or winning business from them.
Initially the investigations came about from allegations from former Sands China CEO Steven Jacobs, who asserted the company had broken his employment contract with them.
Founder and Chief Executive Officer Sheldon Adelson said this, “When the smoke clears, I am absolutely, not 100 percent, but 1,000 percent positive that there won’t be any fire below it.”
Shares of Las Vegas Sands remain under pressure, trading at $41.89, falling $1.58, or 3.63 percent, as of 2:40 PM EDT.
Thursday, March 31, 2011
Las Vegas Sands’s (NYSE:LVS) Sands China Ltd. is under investigation by Hong Kong Securities and Futures Commission for alleged breaking of regulations, after parent company Las Vegas Sands is being investigated by U.S. regulators.
Even though they are media darlings, the solar sector, and by extension, solar companies, like SunPower (SPWRA), First Solar (FSLR), Suntech (STP), Trina Solar (TSL) and Yingli Green Energy (YGE), are louse investments, as demand is totally out of the control of the companies because of the industry being propped up by taxpayer dollars around the world, based on government fantasies of so-called "clean" energy.
Major markets like Germany, France and Italy have already signalled they're cutting back on subsidies because of budgetary pressures, and that is completely out of control of any solar company, no matter where it's operating from.
There is also the inability to really understand how these companies are generating revenue, as many have acquired project pipelines or have gone downstream, clouding the picture for those researching the firms.
At the same time the subsidies and major markets are cutting back on demand, many of the solar companies are increasing supply, making the sector even more less likely to generate a profit, as pricing will come under pressure.
About all a solar company can do is focus on lowering costs and hopefully develop some type of a brand in the minds of its customers, although that hasn't been a strength in the industry.
All of this is to say is solar is an artificial market not developing because of consumer demand but from being forced on the market by world governments.
That means there is no clue as to being able to trust metrics or the future of an industry that exists only because of being propped up by countries and not markets.
In other words, there's no way to project how the sector or individual companies will perform, making investment in the sector a form of gambling rather than investing.
A group of 15 banks have committed to a $1.3 billion secured term loan for International Lease Finance Corp., as unit of American International Group Inc (NYSE:AIG). The loan was arranged by Citigroup (NYSE:C), Credit Suisse (NYSE:CS) and BNP Paribas.
International Lease Finance Corp, is a leading aircraft leasing company.
The $1.3 billion loan will be funded over the next year, and will mature in 2018.
ILFC said the funds will be used to prepay existing unsecured and secured bank facilities.
Included in the deal is the right for ILFC to raise the commitment by $200 million from other lenders.
AIG was trading at $35.33, falling $0.72, or 2.00 percent, as of 2:13 PM EDT.
Using the metric of customer loyalty in the U.S., Ford Motor Co. (NYSE:F) was the leader in the U.S. market, according to market consultancy Polk.
They surpassed major rival General Motors (NYSE:GM) in the category, which they held first place in last year.
The Ford brand had a loyalty rate of 60.3 percent in 2010, beating out second-place Mercedes-Benz of Daimler at 56.7 percent; the Honda (NYSE:HMC) brand of Honda Motor Co at 56.6 percent; the Toyota (NYSE:TM) brand at 56.4 percent; and GM's Chevrolet brand at 53 percent.
Autodata said sales in 2010 for Ford raised it to second place behind General Motors, as they rose 19.5 percent, surpassing Toyota for the No. 2 spot in the U.S. Toyota has sales in the U.S. market for 2010 drop 0.4 percent.
GM remained No. 1 for U.S. auto sales in 2010, rising 7.2 percent from 2009.
Honda was fourth in U.S. auto sales in 2010, with sales jumping 6.9 percent.
The idea that Google (NASDAQ:GOOG) is primarily a search company has been left in the dust long ago by the focus and performance of the company, but investors and onlookers continue to think of Google as a search company, when in fact the portion of revenue they generate from search has fallen to about 70 percent, according to its latest earnings report.
In the past Google had generated about 90 percent of its revenue from search, but realized long ago it had to change that in order to survive and thrive.
They have other advertising platforms as well, such as the increasingly popular YouTube, which appears to be turning a profit,
Google doesn't break down all of its ad network, and so we don't know the specific story in detail, but we do know the company is growing beyond its search business, which is good news for investors, even as search revenue continues to be robust.
The other big leg to the revenue picture is the emerging Android platform, which has soared to be the leading smartphone platform as to market share, although it's not as profitable as Apple's (NASDAQ:AAPL) iPhone at this time.
There is of course also Google Apps, which is also growing quickly.
The point is, search, while a vital piece of the revenue and earnings puzzle for Google, is slowing giving way to a growing number of products and services which is creating a solid moat for the company in more than one business. Good news for investors.
Just don't think of Google as just a search company anymore, as it skews what they have in fact become.
Google was trading at $587.34, gaining $5.50, or 0.95 percent, as of 1:53 PM EDT.
Shares of Tesla Motors, Inc. (NASDAQ: TSLA) received a boost today on an upgrade from Morgan Stanley (NYSE:MS), as the stock has risen as high as 20 percent in response to the positive outlook.
Incredibly, Morgan Stanley not only gave an improved outlook on the stock, but also placed a price target of $70 on the shared; far above double what they're trading at even with the boost in share price.
Morgan Stanley said they believe Tesla could become the fourth major auto maker in the U.S. behind Ford Motor (NYSE: F), General Motors (NYSE: GM) and Chrysler.
Sounds more like religion than a reality, but we'll see if the highly unprofitable electric car company can some day return a profit.
Sales would have to go beyond the wasteful spending of taxpayer money on the high-priced vehicles the company makes.
Tesla was trading at $26.99, gaining $3.28, or 13.83 percent, as of 1:35 PM EDT.
United Technologies Corp.'s (NYSE:UTX) Pratt & Whitney announced it has landed a deal with Indian budget airline IndiGo for 300 engines.
Pratt & Whitney president David Hess noted, "The backlog keeps getting bigger. And we better start cranking up the test program and get these engines through development and into production and out to our customers."
He said the deal with IndiGo confirms the strong demand for its new engine, which has been in development for over 2 decades.
United Technologies Corp. has spent over $1 billion during that time of development of the engine, which increases fuel efficiency while cutting back on noise.
"This new engine and this application here is going to give us the ability to start to take back share in the large commercial engine business," Hess concluded.
United Technologies was trading at $84.87, gaining $0.64, or 0.76 percent, as of 1:25 PM EDT.
Research in Motion (NASDAQ:RIMM) may be losing subscribers in North America, said UBS (NYSE:UBS) analyst Amitabh Passi, citing information in the annual report of the company.
Passi said that net subscribers in the North American market have “either declined quite precipitously in the quarter, or, even more surprisingly, could have turned negative.”
Particularly pointed out was the revelation that 54.6% of BlackBerry users came from outside North America in the quarter, while modeling 6 million net subscriber additions during that time.
Also noted by Passi is RIM saying it is reducing its consumer access to its network operations facilities at a lower fee to carriers. If that was lowered by 10 percent for that monthly subscriber fee, it would lower EPS of Research in Motion by about 50 cents, concluded Passi.
To reach the EPS projection of $7.50, Passi said Rim will have to have a solid response from users from its new product line like Curve Touch, Storm 3, and Torch 2, as well as the Playbook tablet now on sale.
RIM was trading at $56.23, falling $0.80, or 1.40 percent, as of 1:10 PM EDT.
JPMorgan (NYSE:JPM) CEO Jamie Dimon when on the offensive against regulators over the effects they may have on the banking industry, as it could put “the nail in our coffin for big American banks,” he asserted.
Dimon's major concern is if the capital standards are raised so high that it will have a negative impact on the financial giants, specifically if banks in other parts of the world have a different set of standards; something more than likely to happen.
At a conference held by the US Chamber of Commerce, he said, “If you want to set it so high that no big bank ever goes bankrupt... I think that would greatly diminish growth,”
That's true, and it's also the case in the overreaction by politicians to every accident or bump in the road in energy and other sectors which may have the worst-case-scenario possibilities raised so high it may make it prohibitive to successfully do business in the area.
“We had a system of too many regulators, too much overlap and too many gaps. Instead of simplifying and strengthening, we added more. It’s even more complicated now,” Dimon concluded.
JPMorgan was trading at $46.29, falling $0.16, or 0.34 percent, as of 12:56 PM EDT.
The CEO of Wal-Mart (NYSE:WMT), Bill Simon, said in an interview with USA Today that he sees inflation having an impact on price in the latter part of 2011, causing retailers like JC Penney (NYSE:JCP), Home Depot (NYSE:HD), Target (NYSE:TGT), Lowe's (NYSE:LOW), Macy's (NYSE:M) and Office Depot (NYSE:ODP) to all fall.
Food companies have already had to begin to endure the higher prices, as input costs rise as food demand surges around the world. In that case the companies have responded more by lowering the amount of product in some packaging, rather than raising prices or suffering the loss of margins and earnings.
Of course general retailers, for the most part, don't have that luxury, and so will be force to raise prices or allow earnings to underperform, something most will most likely not be willing to allow to happen.
Bottom line is it appears in an environment of higher fuel costs retailers will have to boost prices, making it a difficult time for the overall sector going forward, in an a price sensitive situation.
Shares of Intel (NASDAQ:INTC) dropped today after FBR Capital Markets slashed its earnings per share estimates on the in the first quarter from 51 cents a share to 48 cents a share.
Concerns over the impact of growing tablet sales on PCs and notebooks were the impetus behind the earnings being lowered, according to FBR.
Sales of Sandy Bridge also appear to be weaker than expected, putting pressure on Intel.
Intel was trading down at $20.01, falling $0.45, or 2.20 percent, as of 12:36 PM EDT. FBR also dropped its price target on Intel from $27 to $25 a share.
Google (NASDAQ:GOOG) is the recipient of a formal complaint from Microsoft (NASDAQ:MSFT), as the software giant alleged to antitrust regulators that it is preventing competition in the area of Internet search.
Microsoft knows this game, as they have been a target of similar cases in Europe and the United States, where they've been accused of antitrust violations as well.
A subsidiary Microsoft filed a complaint earlier.
Microsoft was trading at $25.50, falling $0.11, or 0.43 percent, as of 12:30 PM EDT. Google was trading at $586.50, gaining $4.66, or 0.80 percent.
Shares of Hess (NYSE:HES) Consol Energy (NYSE:CNX) and Occidental Petroleum (NYSE:OXY) are all jumping today as the oil price reached its highest level since 2008 and uncertainty surrounding nuclear because of the Japan earthquake disaster has other segments like coal and natural gas looking to increase in demand.
The price of oil continues to rise on the ongoing conflict in Libya, which has pushed the price per barrel past $106 today.
Natural gas prices are also expected to start rising, as they stand at lows because of the large amount of supply. That could level off again as the events around the world settle down.
Hess was trading at $85.35, gaining $1.54, or 1.84 percent, as of 12:19 PM EDT. Consol was trading at $54.45, up $1.14, or 2.14 percent. Occidental was at $105.15, rising $1.39, or 1.34 percent.
Talking the potential of natural gas in shale, Rehan Rashid, energy and natural resources analyst for FBR Capital Markets, said some of the companies he likes include Endeavour International Corporation (NYSE:END), Pioneer Natural Resources (NYSE:PXD), Newfield Exploration (NYSE:NFX) and Southwestern Energy (NYSE:SWN).
There is no doubt whatsoever that natural gas will become a huge source of energy in the United States, as it's only a question of when, not if, it becomes a major player.
Holding it back now is the extreme abundance of the resource, as new sources around the U.S. have been discovered recently, pushing down the price of the energy source, making it uneconomical at this time to produce in large quantities.
There are of course a number of other companies in the sector, but investors need to look closely and perform due diligence, as this could be one of the buys of the decade, and possibly century, as we may never see prices this low again for decades, once natural gas prices take off.
In a proxy filing Bank of America Corp. (NYSE:BAC) revealed Chief Executive Officer Brian T. Moynihan had his compensation cut to $1.94 million in 2010, down by 70 percent from the prior year.
Moynihan enjoyed a raise in salary from $800,000 to $950,000, but had his stock awards lowered from $5.2 million to zero.
Even so, the Bank said Moynihan earned about 410 million in 2010, as the final figures didn't take into account the $9.05 million in restricted stock which was linked to performance, and which will be paid out n 2014, assuming the company meets goals related to return on assets, said the giant bank.
Moynihan took over the reins of the company in January 2010.
Bank of America closed Wednesday at $13.45, gaining $0.10, or 0.75 percent.
Google (NASDAQ:GOOG) announced on its blog that it's about to add what they're calling its "+1" button, which will be used in a similar fashion as the "Like" button Facebook employs with its users.
The purpose of the button is for users to be able to share search links they found helpful with their friends.
When users perform a Google search, results in the near future will have the +1 button appear along side the corresponding links, which they can then recommend to their friends in Gmail chat and "My Contacts" group.
The button will also work with advertisements on the search results page.
Google closed Wednesday at $581.84, up $0.11, or 0.02 percent.
Citigroup (NYSE:C) raided five bankers from Wilmington Trust Corp (NYSE:WL) before the completion of the acquisition of Wilmington by M&T Bank (NYSE:MTB).
Paul Hubert, Citi Private Bank's eastern regional head noted, "This is an important region for us and the collective experience and success of these talented private banking professionals will be instrumental in expanding our franchise throughout Pennsylvania and Delaware."
M&T Bank spokesman C. Michael Zabel responded, saying, "We understand that it's been a long and difficult road for Wilmington Trust employees, and while we're disappointed, we're not surprised to lose a few along the way."
"At M&T, we see a tremendous future for the Wilmington Trust business lines once the deal is closed and we look forward to working with the Wilmington Trust team to build that future together."
The new hires will work with high-end clients, privately held business owners in Pennsylvania and Delaware, foundations and endowments, according to Citigroup.
Citigroup closed Wednesday at $4.45.
The offer by American International Group (NYSE:AIG) to acquire mortgage-related assets held in its Maiden Lane II portfolio has been rejected by the Federal Reserve, according to the U.S. central bank.
Rather than selling the entire group of assets to AIG as a whole, the Fed said they're going to sell the assets in blocks and individually in what they called a "competitive process," which probably points to an auctioning of the securities.
The assets are held by the Federal Reserve as a result of acquiring them at the time AIG was getting bailed out.
The Federal Reserve noted, "In light of improved conditions in the secondary market for non-agency residential mortgage backed securities (RMBS), and a high level of interest by investors, the Federal Reserve believes that conditions are right for ML II to begin more extensive asset sales while taking appropriate care at all times to avoid market disruption."
AIG offered $15.7 billion for the assets, which have a face value of $30 billion.
AIG closed Wednesday at $36.05, falling $0.13, or 0.36 percent.
Just about everything seemed to go wrong for Acxiom Corp (NASDAQ:ACXM) on Wednesday, as it was announced the CEO of the company had resigned and the CFO was going to do the same soon.
Add to that the weak guidance of the company for fiscal 2011 and you have almost a perfect storm for the company, one they struggled to survive on the day.
CEO John Meyer was announced to have resigned effective March 28, on the assumption by many he was probably forced out. Jerry Gramaglia was set in as interim CEO.
Also announced was the upcoming resignation of CFO Christopher Wolf, which will take place in the second quarter.
Acxiom closed Wednesday at $13.50, plummeting $3.96, or 22.68 percent.
The nonsensical and misleading article in the New York Times (NYSE:NYT) about the faux outrage over General Electric (NYSE:GE) not paying taxes last year when they made billions in profits, shows the ignorance of writers there and why it continues to be a relic from the past.
It's not that I like GE that much either, as they're far too subsidized and lobbied up in my view, and act and operate more like a quasi-government entity than a corporation competing in a free market (if there still was one).
In a recent speech, Immelt said this about the tax situation, “Our tax rate in 2008 and 2009 was low. We lost $32 billion in our financial-services businesses in that time period. It’s a tough way to get a low tax rate. Our tax rate is going to be much higher in 2011 and the future, but let me tell you, we got socked with losses during that time period.”
Concerning tax reform, Immelt added, “Rarely does business speak with one voice, but they do on taxes. Our system is old, it’s outdated, it’s complicated. And all of us are for closing the loopholes. Absolutely a lower corporate tax rate, and a territorial system, just like our global competitors have.”
General Electric spends more on lobbying than any other corporation, putting out $4.18 million in 2010 alone.
MicroStrategy (NASDAQ:MSTR) has been hired by Groupon to go through the numerous daily deals of the company concerning services and products acquired in order to get an accurate picture of what its customers are searching for.
Included in the data will be demographics, discounts offered, location and daily deals customers participate in.
The data gleaned is expected to give Groupon more insight into the behavior and habits of its customers for the purpose of providing more targeted offerings.
MicroStrategy closed Wednesday at $133.69, gaining $10.69, or 8.69 percent.
As Apple (NASDAQ:AAPL) goes so goes Cirrus Logic (NASDAQ:CRUS), and that generates the question of the sustainability of the company if it doesn't expand its market.
The problem isn't so much whether or not Apple will continue to enjoy success in the smartphone market for some time, the question is whether or not Cirrus will continue to remain the primary vendor they work with there, as evidenced by Apple's recent decision to use Qualcomm (NASDAQ:QCOM) instead of Infineon for its baseboard chip.
Cirrus' design does help protect is some, as it comes with strong customization, but those specs could be imitated or adapted easy enough if Apple chose another company.
With about 54 percent of the revenue generated by Cirrus coming from Apple, they do need to do some work to lower its exposure and boost investor confidence.
That's not to say there aren't some other wins for Cirrus, as they have won business with Ford Motor (NYSE:F) and Sirius (NASDAQ:SIRI) for unrelated products, but together with other offerings, is still less than half of the business they do with Apple alone.
Cirrus closed Wednesday at $21.11, falling $0.23, or 1.08 percent.
Shares of Rackspace Hosting (NYSE:RAX) soared to an all-time high on news its partnering with Dell Inc. (Nasdaq:DELL) and Equinix, Inc. (NASDAQ:EQIX) on an open-source cloud-computing platform named OpenStack they developed together.
The demo environment will be offered in three data centers: the Rackspace data center in Chicago, Illinois., the Equinix International Business Exchange (IBX) in Silicon Valley, California, and in Ashburn, Virginia.
The trio also have a strategy in place to work on similar demo environments in Equinix data centers in Asia and Europe during the second quarter of 2011.
What the demonstration environment does is empower entities to quickly and easily assess a variety of applications on the open-source cloud platform.
Rackspace closed Wednesday at $43.01, gaining $3.30, or 8.31 percent.
Entergy (NYSE:ETR) has decided the end its quest to sell its nuclear plant in Vermont, as the state has yet to renew its operating license there, even though federal authorities have done so via the Nuclear Regulatory Commission, which recently renewed it for 20 years.
Also concerning selling its power to the largest utilities in the state, Entergy has failed there as well, unable to come to an agreement with most of them, although it did secure a deal with Vermont Electric Cooperative Inc., the third-largest electric company in the state.
In that deal they agreed to sell Vermont Electric power for 4.9 cents per kilowatt hour for the first year of a contract extending 20 years. After that prices will fluctuate based on the market.
The caveat there is that the plant must be operational after 2012, something that is far from certain at this time.
Political winds are now against the company in that regard.
Entergy closed Wednesday at $68.00, gaining $0.67, or 1.00 percent.
Listening to Salesforce.com (NYSE:CRM) CEO Marc Benioff talking about the acquisition of Radian6, it looks like the end result could be the emergence of a marketing suite by the company.
Benioff said on a conference call that this is more than likely the next step the company will take, so it's not just theoretical.
Technology offered by Radian6 empowers users to discover what is being communicated about the products and services offered by brands across the various media, forum, blog and social networking sites.
Alta Plana analyst Seth Grimes noted, "Radian6 helped establish the social-media measurement category and has been one of the category's leading lights."
The two companies were already in the process of putting together and releasing an integrated application in the third quarter, and expectations are the acquisition will speed up the initiative.
Salesforce.com closed Wednesday at $134.49, gaining $7.09, or 5.57 percent.
Confidence in Nvidia (NASDAQ:NVDA) continues to waver as expectations PC demand will continue to fall and the weak presence the company has in the tablet and smartphone segments.
If the concern over the PC market ends up being true and penetration in the tablet and smartphone market continues to be a challenge, Nvidia is definitely in trouble.
A major hope for the company is its contract wins with smartphones in regard to its Tegra Chip. One negative there is the possibility the release of Motorola's Bionic (MMI) will be delayed; the reason shares fell on Wednesday.
Some analysts see the need for Apple (NASDAQ:AAPL) to redesign its iPhones and ipads with better chips, which would position Nvidia strongly in that area, but that's not here nor there, and it could be a long time before that happens, if it ever does.
As far as the here and now, Nvidia has some major hurdles to overcome before confidence in the company is renewed. Some more wins in the smartphone sector is probably the best bet in the near term.
Nvidia closed Wednesday at $18.45, dropping $0.72, or 3.76 percent.
Local Brazilian newspaper, Folha de S.Paulo, reported Vale (NYSE:VALE) will have a new CEO named by Friday, with the name Tito Botelho Martins being identified as the person getting the job.
The newspaper didn't reveal the source they received the information from.
Removing Agnelli could actually be a disaster for the company, as he has helped the company grow exponentially during his tenure, and is only be pressured to be removed because of the socialist Brazilian government which is attempting to tell him how to use the capital of the company.
The government of Brazil has been attempting to remove Agnelli for years, alleging he isn't doing enough for the economic development in Brazil. They want him to use company money to invest in steel mills and infrastructure.
Brazil's government formerly ran Vale as a state-owned business, and apparently still considers itself such, even though they are supposed to be out of the picture.
This will create doubt in investors' minds as to whether they can trust investing in the company if the government is allowed to remove a highly successful leader like Agnelli because he does what's best for the company, its shareholders and its workers.
Vale closed in New York at $32.92, falling $0.05, or 0.15 percent.
Shares of Visa (NYSE:V) and Mastercard (NYSE:MA) have received a boost on expectations the proposed rules which would limit the amount banks can charge for debit-card swipe fees will be delayed.
Federal Reserve Chairman Ben Bernanke recently stated in a letter to Congress that it's very improbable that in the next Federal Reserve meeting they'll be able to meet the deadline of April 21 for the final rules concerning the fees to be put in place.
Growing opposition over limiting the fees is slowing down the process and looking increasingly questionable as to whether they'll become part of the way banks will have to do business.
Visa closed Wednesday at $74.23, gaining $2.03, or 2.81 percent. Mastercard closed at $253.66, up $1.95, or 0.77 percent.
Bank of America (NYSE:BAC), Fifth Third Bank (NASDAQ:FITB) and GE Capital Corp. (NYSE:GE) entered into a $225 million senior secured credit facility with X-Rite Inc. (NASDAQ:XRIT).
X-Rite said it will use the capital to refinance it debt and to redeem all its outstanding preferred stock. The company has $49.4 million in outstanding preferred stock.
Terms of the deal are a revolving credit facility up to $55 million and a term loan up to $170 million.
Part of the strategy is to lower the cost of capital. In the first year the company will save approximately $10 million in annual interest expense, down from $28 million in 2010.
X-Rite will record charges of about $14 million in the refinancing.
The company closed Wednesday at $4.75, gaining $0.02, or 0.42 percent.
Massey Energy (NYSE:MEE) was awarded a permit from the United States Army Corps of Engineers to start mining for coal in West Virginia.
Estimates are the Reylas Surface Mine in Logan County should produce about 1 million tons of coal annually over a six-year period.
With demand for coal rising, Massey continues to increase production, which rose in 2010 and is expected to reach about 30 million tons annually, although there is the definite possibility those numbers could rise, along with demand.
Only Arch Coal (NYSE:ACI), Peabody Energy (NYSE:BTU) and CONSOL Energy (NYSE:CNX) are larger coal companies in the United States than Massey, which closed Wednesday at $68.51, gaining $0.44, or 0.65 percent.
Assertions by AT&T Inc (NYSE:T) detractors coming as a result of the bid of the company for T-Mobile, saying it will result in higher prices, was argued against by AT&T CEO Randall Stephenson
Speaking at an event in New York sponsored by the Council on Foreign Relations, Stephenson cited a government report which stated prices over the last 10 years have dropped about 50 percent after the merger of five wireless companies during that time.
Another argument he used was concerning AT&T customers themselves, which had paid in the past about $1.90 a megabyte of wireless data, which has been whittled down to close to 16 cents at this time.
AT&T offered $39 billion to Deutsche Telekom AG's T-Mobile USA unit, which is the fourth-largest in the country, and is a low-price leader.
AT&T closed Wednesday at $30.71, gaining $0.66, or 2.20 percent.
Even though it's obvious the auto industry is in enormous trouble, the companies and the media have been downplaying the situation as if there are doubts as to whether or not this is going to cause huge problems at major auto makers like Ford (NYSE:F), Toyota (NYSE:TM), GM (NYSE:GM) and Honda (NYSE:HMC).
Some companies have went so far as to say they haven't had any disruptions, as if that is going to continue on. It's a foolish assertion to make because the implication is that business is going on as usual, when in fact huge shortages are looming at the companies, even though the have chosen to focus on paint as the primary missing ingredient, generating the perception major parts are unaffected.
The hope is of course they downplay all of this and maybe Japan will recover quickly enough to make the disruptions minimal. That's very unlikely to happen, and it'll give the appearance that something suddenly and out of control happened, when if fact it was the expected scenario since the disastrous earthquake happened.
So far the only auto company that seems to be totally honest on the near term effects of the earthquake is Volvo, which has admitted they are close to running out of navigation and climate-control components, with the last day they have them being probably today, based on the 10-day supply they said they had on March 21.
Bottom line for investors is they better assume they don't know the entire story and that some vehicle parts are about to be impossible to get.
At this time Japanese auto companies have been the most affected by the shortage, but that is going to quickly spread to other companies, with little hope things will turn around in time to keep it from becoming a disaster to the industry. Shareholders in the sector beware!
A antitrust lawsuit filed against Sirius XM (NASDAQ:SIRI) has been ordered to go to trial by a New York judge, with the date set for May 2.
The lawsuit alleges Sirius lied when it said once it merged with XM it would lawyer prices, when claimants say prices have risen as high as 40 percent after the consummation of the merger.
Sirius' argument is the fact the government approved of the merger in the first place removes any claims they have violated monopoly laws coming from less competition.
Sirius said in a statement, "With new competitors emerging almost daily, we continue to believe these claims are without merit and intend to vigorously defend this matter."
The company has also recently been sued by top celebrity Howard Stern, while also being pressured from woes in the auto industry coming from the shortage of parts because of the earthquake in Japan.
Sirius closed Wednesday at $1.72, dropping $0.01, or 0.87 percent.
After announcing its considering acquiring Cephalon Inc. (NASDAQ:CEPH), Valeant (NYSE:VRX) has been placed under review by Moody's Investors Service (NYSE:MCO), as they're considering possibly downgrading the company.
Specifically being looked at are Valeant's 'Ba3', or speculative, corporate family rating, probability of default rating and senior unsecured rating.
Moody's Senior Vice President Michael Levesque said, "An acquisition of Cephalon would provide Valeant with new specialty pharmaceutical products including several strong brands in neuroscience and pain, and a stronger generics presence in Central Europe. However, the acquisition offer comes shortly on the heels of the Biovail/Valeant merger and highlights an extremely dynamic acquisition strategy and aggressive financial policies."
If the deal is consummated, Moody's said it will zero in on the terms of the deal, debt, credit metrics effects, financial policies and integration challenges.
Moody's did note if there is a downgrade it will probably be one notch.
Contrary to the past actions of Berkshire Hathaway (NYSE:BRK-A) CEO Warren Buffett concerning prior resignation attempts by David Sokol, Chairman, MidAmerican Energy Holdings, and Chairman, President, and CEO of NetJets, this time he accepted the resignation, in what appears to be in response to something that irked Buffett.
Buffett said in a press release, "Dave’s letter was a total surprise to me, despite the two earlier resignation talks. I had spoken with him the previous day about various operating matters and received no hint of his intention to resign. This time, however, I did not attempt to talk him out of his decision and accepted his resignation."
The accepted resignation appears to come from Sokol's acquisition of shares in Lubrizol (NYSE:LZ) before he had attempted to convince Buffett to invest in the company.
While Buffett doesn't believe it was in any way unlawful, the tone of his press release seemed to be that he was somewhat irritated by what could be construed as an impropriety.
As in the past, Sokol said he wants to pursue philanthropic efforts.
Buffett quoted him saying, “As I have mentioned to you in the past, it is my goal to utilize the time remaining in my career to invest my family’s resources in such a way as to create enduring equity value and hopefully an enterprise which will provide opportunity for my descendents and funding for my philanthropic interests. I have no more detailed plan than this because my obligations from Berkshire Hathaway have been my first and only business priority.”
Shares of Agrium (NYSE:AGU), Mosaic (NYSE:MOS), Monsanto (NYSE:MOS), Terra Nitrogen (NYSE:AGU), Potash (NYSE:POT) and CF Industries (NYSE:CF) are all rocking as the growing season starts or approaches, depending on what part of the U.S. you are in.
Shares of CF Industries Holdings, Inc. (CF) closed up 2.2 percent Wednesday at $132.61 for a gain of $2.85 after previously closing at $129.76. CF Industries traded at a high/low of $132.92/$129.28 during intraday action.
Shares of Monsanto Company (MON) closed up 0.41 percent Wednesday at $70.79 for a gain of $0.29 after previously closing at $70.50. Monsanto traded at a high/low of $71.40/$70.00 during intraday trading.
Shares of Agrium Inc. (AGU) closed up 1.99 percent Wednesday at $89.64 for a gain of $1.75 after previously closing at $87.89. Agrium traded at a high/low of $89.86/$88.17 during intraday trading.
Shares of Terra Nitrogen Company, L.P. (NYSE:TNH) closed up 1.27 percent Wednesday at $114.63 for a gain of $1.44 after previously closing at $113.19. Terra Nitrogen Company traded at a high/low of $114.99/$113.99 during intraday trading.
Shares of The Mosaic Company (NYSE:MOS) closed up 2.03 percent Wednesday at $80.45 for a gain of $1.60 after previously closing at $78.85. Mosaic traded at a high/low of $80.49/$78.89 during intraday trading.
Shares of Potash Corp. of Saskatchewan, Inc. (NYSE:POT) closed up 1.8 percent Wednesday at $58.18 for a gain of $1.03 after a prior closing of $57.15. Potash traded at a high/low of $58.30/$57.46 during the intraday session.
Wednesday, March 30, 2011
For only the second time in the last 13 years, Ford Motor (NYSE:F) is expected to surpass rival General Motors (NYSE:GM) in monthly sales, as the companies prepare to report March U.S. sales on Friday.
Also being watched closely will be the impact the devastating earthquake in Japan has had on the industry, with much of it being speculation and guesses as the story continues to play out.
Overall for the month, sales in the U.S. are expected to come ina t $1.24 million trucks and cars, an increase of 16.5 percent over the same month in 2010, and 25 percent over the prior month, according to Edmunds.com.
J.D. Power and Associates analyst Jeff Schuster, "... retail sales in March may be benefitting from the uncertainty around inventory levels, as consumers flock to dealerships to secure their choice of vehicle as availability decreases.”
Ford (F) sales in March should rise by about 15 percent, which would put the company ahead of GM (GM).
“GM seems to have pulled back on incentives in March and could suffer a sales hangover through the next few months, given that the company’s earlier offers have been quite generous and may have pulled ahead future sales,” Edmunds.com Senior Analyst Jessica Caldwell added.
Ford was trading at $14.93, gaining $0.09, or 0.57 percent, as of 2:54 PM EDT. General Motors was at $31.55, up $0.45, or 1.45 percent.
Even though Microsoft (NASDAQ:MSFT) is developing a version of Windows 7 for tablets, Craig Mundie, Microsoft’s chief research and strategy officer, says he doesn't see much of a future for the devices.
“I think there’s an important distinction–and frankly one we didn’t jump on at Microsoft fast enough–between mobile and portable,” he said. “Mobile is something that you want to use while you’re moving, and portable is something that you move and then use. These are going to bump into one another a little bit and so today you can see tablets and pads and other things that are starting to live in the space in between. Personally I don’t know whether that space will be a persistent one or not.”
There is no doubt in the short-term tablets are and will be a hit, but once the initial newness wears off it'll be at that time we'll know whether or not Mundie is right.
As for the Microsoft tablet platform, it won't be released until the fall of 2012, suggesting they think it'll be around at least for awhile.
Microsoft was trading at $25.66, gaining $0.17, or 0.67 percent, as of 2:42 PM EDT.
The bias lawsuit against Bank of America (NYSE:BAC) by black financial advisers was dismissed by U.S. District Judge Robert Gettleman.
The advisers alleged their white counterparts were offered higher bonuses to stay on when the company merged with Merrill Lynch.
Strangely, the black brokers had complained that their bonuses were based on "production," or fees earned on client assets. Strange because they thought they didn't have to compete to earn their bonuses. It's not like this is a public service job where you don't have to produce in order to be retained.
Gettleman wrote in response to allegations of earlier discrimination at Merrill Lynch, "Knowledge of past and even present discrimination alone does not make it plausible that defendants actually adopted the advisor transition program with discriminatory intent."
He concluded there was no evidence Bank of America had designed the bonus program for the purpose of discriminating against anyone.
This case makes little sense, as it makes the black brokers filing it look as if because they aren't able to compete in the workplace with brokers who happen to be white, that they are being discriminated against.
Results aren't equal opportunity, performance is.
Bank of America was trading at $13.50, up $0.15, or 1.12 percent, as of 2:32 PM EDT.
After Analog Devices (NYSE:ADI) announced it is issuing $375 million in bonds, JPMorgan (NYSE:JPM) weighed in saying they see it as tax move to protect their overseas cash.
ADI gave its reasons as using the capital for general corporate purposes.
JPMorgan’s Christopher Danely wrote in a note that the bonds are more than likely meant to allow the company to continue to keep about 70 percent of its $3 billion in cash overseas, which allows ADI to be taxed at a corporate rate of 20 percent.
The implication seems to be be that ADI doesn't believe there will be a tax amnesty offered by Congress to companies.
Danely said ADI has close $520 million in debt at this time. Add in the issuance, and that brings it to $875 million. He sees that as manageable, given that the company should produce about $900 million in operating cash flow in the fiscal year ending in October 2011.
Analog Devices was trading at $39.46, down $0.04, or 0.10 percent, as of 2:18 PM EDT.
American Airlines (NYSE:AMR) announced it has suspended two of its daily flights to Japan as demand continues to fall in light of the earthquake in the country.
The airline said it will drop a daily flight from New York’s John F. Kennedy International to Tokyo’s Haneda airport and one of two daily trips from Dallas-Fort Worth International to Narita, according to American spokesman Ed Martelle. “It’s purely due to passenger demand,” he said.
Competitor Delta Air Lines Inc. (NYSE:DAL) has already dropped service to Haneda, although they continue to serve Narita, which is a spoke for overseas travel.
“Our scheduling people believe the situation will be stabilizing, but we’ll continue to monitor the situation and make whatever changes we have to make,” Martelle noted.
American Airlines was trading at $6.84, up $0.26, or 3.95 percent, as of 2:05 PM EDT.
Google (NASDAQ:GOOG) announced the first city that it'll implement its fiber optic network in will be Kansas City, Kansas, which has a population of about 145,000.
The company has stated Internet access will be at "more than 100 times faster than what most Americans have today."
At this time the particulars of the service haven't been revealed, with no pricing being talked or whether or not access will be metered or unlimited.
The chosen location seems to imply that Google is sending a message to the telecom companies that they need to start pushing initiatives like this out, or they may end up taking the matter into their own hands.
Google was trading at $583.70, up $1.97, or 0.34 percent, as of 1:55 PM EDT.
Orbitz Worldwide (NYSE:OWW) has lost Enterprise Holdings - which operates Alamo Rent A Car, National Car Rental, and Enterprise Rent-A-Car brands - as a customer, with Enterprise saying the commission rates now being asked for are "unacceptably high."
Pam Nicholson, chief operating officer of Enterprise, said in a statement, "Their position greatly limits consumer choice and makes renting a car less affordable. It is also punitive towards rental car brands that have contributed to Orbitz's success for many years."
Orbitz, an online travel company that competes with Expedia Inc (NASDAQ:EXPE) and Priceline.com (NASDAQ:PCLN), said it was unable to reach a new deal with Enterprise after the previous contract expired.
It said, "Orbitz has replaced Enterprise Holdings with other suppliers that better serve the needs of our customers. Moving forward, we will continue to give customers choice among a robust selection of car rental options - including Hertz, Avis, Budget, Dollar, Thrifty, Advantage and other leading suppliers - that will fully meet travelers' needs."
Orbitz was trading at $3.595, up $0.005, or 0.14 percent, as of 1:36 PM EDT.
The airplane leasing unit of General Electric (NYSE:GE) has acquired 10 Boeing (NYSE:BA) 777s, according to Boeing.
List price of the overall deal would be $2.8 billion, although normally discounts are part of these types of transactions.
Boeing spokesman Tim Bader said the order by GE Capital Aviation Services was completely new and had not been previously listed.
The new order means GECAS has ordered a total of 53 777s. Most have been delivered, though it is still waiting for three more 777-300ERs ordered in 2000, as well as two more 777 freighters ordered in 2006.
Before the latest order, Boeing had a total of 91 deliveries of the 777 pending.
The 777-300ER carries 365 passengers. Airlines use the plane on high-density, long-haul routes.
Boeing was trading at $74.08, up $0.46, or 0.62 percent, as of 1:32 PM EDT. General Electric was trading at $20.18, up $0.32, or 1.61 percent.
Facing scrutiny and some opposition from competitors, AT&T (NYSE:T) CEO Randall Stephenson said he expects to have to divest of some of the assets they get when they acquire T-Mobile.
Included in the divestiture will be some of the wireless spectrum and customers that come with the company.
“We anticipate there will be some markets we will have to divest,” Stephenson said.
"AT&T’s plan to buy T-Mobile from Deutsche Telekom AG for $39 billion is expected to face heavy scrutiny from regulators and opposition from consumer-advocacy groups and competitors. Rivals Sprint (NYSE:S) and Clearwire Corp. (NASDAQ:CLWR) have been vocal about the alleged harmful impact of the deal," said Marketwatch.
Verizon Wireless (NYSE:VZ) Chief Executive Dan Mead previously said his company sees an opportunity to potentially scoop up some divested assets.
This is how Sprint and Clearwire need to view the potential transaction, not from a place of weakness where all they attempt to do is stop the deal from going forward.
AT&T was trading at $30.89, gaining $0.84, or 2.80 percent, as of 1:19 PM EDT.
In an agreement with the FTC, Google (NASDAQ:GOOG) agreed to allow its privacy procedures to undergo an independent review every two years, along with a requirement for users to opt-in before privacy changes are put into place.
In a blog post today, Google (GOOG) outlined an agreement with the FTC over privacy concerns connected to the release of Google Buzz in February of 2010. Specifically, if users took no action to change defaults, Google disclosed on users' Google profile a list of Gmail contacts. Those contacts were chosen by Google if the user had frequently or recently emailed or chatted with them (among other factors).
Google was relatively quick with a fix (which was to make Google profiles private) but the damage had already been done to Google's reputation for privacy.
The privacy breech lead to a well publicized stalking case as well as showing that a former Google Lobbyist and current White House staffer kept in close contact with his former Google colleagues, a double whammy for Google.
If the opt-in privacy disclosure requirements become a baseline (and they haven't) for tech/social companies, what affect will this move by the FTC have on Facebook? Facebook changes user privacy settings quite frequently and requiring users to opt-in each time could slow down their rate of change.
Google was trading at $584.74, up $3.01, or 0.52 percent, as of 1:05 PM EDT.
Shares of Nvidia (NASDAQ:NVDA) are under pressure today on the warning from ThinkEquity analyst Krishna Shankar that the company will probably be hurt by declining PC consumer demand.
Although Shankar acknowledges strong growth for Nvidia in the smartphone and tablets market, it apparently won't be enough to offset the projected decline in PC sales.
With smartphones and tablets outside of Apple (NASDAQ:AAPL), he also pointed to the heated competition from rivals like Marvell (NASDAQ:MRVL), Texas Instruments (NYSE:TXN), Qualcomm (NASDAQ:QCOM), Intel (NASDAQ:INTC) and Broadcom (NASDAQ:BRCM).
He added that “slowing consumer PC market growth may be worsened by supply bottlenecks due to the Japan earthquake.”
Concerning ARM-based PC and server chips, revenue from those segments is probably still a couple of years away, Shankar concluded.
Hew lowered his EPS estimate for fiscal year 2012 from $1.18 to $1.10, and for full year 2012 from $1.35 to $1.20.
Shankar maintains a "Hold" rating on Nvidia, which was trading at $18.45, dropping $0.72, or 3.76 percent. He slashed his price target on Nvidia from $24 to $18.
BBC's Top Gear, the most popular show on the network, was sued by Tesla Motors (Nasdaq:TSLA), alleging libel and malicious falsehood.
"One of the show's presenters, Jeremy Clarkston, said although the car is quick, the range on Tesla's Roadster is limited. Clarkston claimed Tesla's Roadster ran out of juice after 55 miles, compared to the 200 million range the Palo Alto, CA-based automaker claimed it had. Tesla alleges the scene where the Roadster was shown running out of energy was faked, according to the filing," said TheStreet.
"This would be a material event to Tesla, as a 260% overstatement of battery life may impact a buyers decision to go with Tesla in the future, rather than General Motors (NYSE: GM) or Ford (NYSE: F). According to Bloomberg, the filing stated Top Gear's claim of 55 miles implies Tesla "'grossly misled potential purchasers of the Roadster.'"
"Top Gear has an audience of six million in the U.K. and viewership of 350 million internationally."
Tesla was trading at $23.68, down $0.24, or 1.00 percent.
Rare earths companies outside of China, like Rare Element Res Ltd (AMEX:REE), Molycorp, Inc (NYSE:MCP), General Moly (AMEX:GMO) and Avalon Rare Metals (AMEX:AVL) are all trading down today on news of a huge rare earths discovery in China, which could end up boosting supply while pushing down prices.
Of particular not was a huge deposit of Scandium, one of 17 rare earths, and which is used in the building of a variety of high-tech products. Estimates are there are over 70 tons of scandium in the deposit.
Also part of the discovery was 130,000 tons of lead and zinc, 3,000 tons of cadmium, and 800 tons of silver. In addition, there were significant deposits of rhenium, stannum and gallium found.
This actually boosted share of Market Vectors Rare Earth/Strategic Metals ETF (NYSE:REMX), as well as Chinese rare earths companies like China Shen Zhou Mining & Resources, Inc. (AMEX:SHZ) and Qiao Xing Universal Resources (Nasdaq:XING).
Standard & Poor's lowered its debt rating on Nokia (NYSE:NOK) for the first time in its history, citing the loss of market share during Nokia's transition to Microsoft's (NASDAQ:MSFT) Windows Phone 7 platform.
"The downgrade reflects the revision of our business risk profile assessment on Nokia to ‘satisfactory’ from ‘strong,’ primarily because we expect that Nokia’s smartphone portfolio will make further significant market share losses during 2011 and 2012 until it has completed its adoption of Microsoft’s Windows Phone software as its new primary software platform for smartphones," S&P said.
S&P cut its rating on Nokia to "A-" while including a Stable outlook on them. Nokia has been rated "A" for the last 13 years.
As of the end of 2010, Nokia had about $7.5 billion in long-term debt it held.
Nokia was trading at $8.62, falling $0.06, or 0.69 percent, as of 12:04 PM EDT.
A group of over 50 U.S. organic farmers and seed dealers filed suit against global seed giant Monsanto Co. (NYSE:MON), in a move to allegedly protect themselves from what they see as a growing threat in the company's arsenal of genetically modified crops.
The Public Patent Foundation (PUBPAT) filed the suit on
behalf of more than 50 organizations challenging the
agricultural giant's patents on its genetically modified seeds.
The group is seeking a ruling that would prohibit Monsanto from
suing the farmers or dealers if their organic seed becomes
contaminated with Monsanto's patented biotech seed germplasm.
Monsanto is known for its zealous defense of its patents on
a range of genetically altered crops. Its patented "Roundup
Ready" soybeans, corn and cotton are favorites of U.S. farmers
because of their ability to withstand herbicide treatments.
But Monsanto has filed scores of lawsuits and won judgments
against farmers they claimed made use of their seed without
paying required royalties.
Monsanto called the lawsuit misleading and a "publicity
stunt" and said it has never sued and has committed to never
suing farmers over the inadvertent presence of biotechnology
traits in their fields. Legal precedent supports the validity of Monsanto patents, the company said. "These efforts seek to reduce private and public investment in the development of new higher-yielding seed technologies.
Monsanto closed Tuesday at $70.50, gaining $0.25, or 0.36 percent.
Bank of America (NYSE:BAC) has hired Craig Reynolds, a senior swaps trader from Goldman Sachs (NYSE:GS), away from the company.
The giant bank announced in an internal email that Reynolds was now part of their team, and will run U.S. rates trading for them.
Those aware of the situation said Peter Antico, Bank of America’s previous head of rates, will now head up the G-10 currency trading for the bank. And Chris Hodson, who had been running swaps trading in America, will now oversee the rates business for Europe, the Middle East, and Africa out of London. These were also part of the email message sent by BofA management.
Bank of America closed Tuesday at $13.35, falling $0.02, or 0.15 percent.
Shares of Tibco Software Inc. (NASDAQ:TIBX) were beaten down in after hours trading, even though the company beat analysts' estimates. Even so, it wasn't like they have beaten expectations in the past, which apparently generated the downward pressure, presumably on the idea growth is slowing.
In the previous eight quarters Tibco had an average beat of estimates of 16 percent, while this quarter it was only 5 percent above consensus.
For its fiscal first quarter, earnings minus one-time items came in at 16 cents a share, with revenue reaching $185.3 million. Analysts surveyed by FactSet Research had estimated earnings of 15 cents a share on revenue of $182.5 million.
Tibco closed Tuesday at $26.27, gaining $0.14, or 0.54 percent. In after hours trading the company plunged by $1.47 to $24.80, down $1.47, or 5.60 percent.
In an effort to further boost the stickiness of its Hotmail e-mail service, Microsoft (NASDAQ:MSFT) is allowing the embedding of technology from popular sites like LinkedIn and Netflix (NASDAQ:NFLX).
Microsoft's partnership with the companies has been dubbed "Active Views," which empowers users to view or make acquisitions without moving out of your email window.
This is an expansion of the Active Views service last year which targeted sites like Flickr, YouTube and Hulu.
The latest version allows a larger number of business types to use the service, especially those that communicate a lot through emails to their customers.
Microsoft said, “In traditional email with just a text link, the percentage of people clicking through is less than 10%. With Active Views, customers are clicking on the video control in about 25% of all email messages with a video."
The software company closed Tuesday at $25.49, up $0.08, or 0.31 percent.
Companies with significant exposure to aluminum, like Alcoa (NYSE:AA), Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP) and Chalco (NYSE:ACH) and Rusal, should enjoy support as producers look for alternatives for certain products which can substitute aluminum for copper.
Aluminum is in general accepted as a cheaper substitute to copper in many applications, and many manufacturers are seriously considering switching to aluminum with copper reaching all-time high prices early this year.
Alcoa's products are used in a wide variety of products from aircrafts and automobiles to commercial transportation and packaging. The company also sells non-aluminum products like aerospace and industrial fasteners.
Copper is primarily used in electrical appliances and construction. About 65 percent of copper usage is attributable to electrical appliances because it is an excellent conductor of electricity. Construction applications make up the bulk of the remaining share of copper usage in which the metal is often used for roofing and plumbing as well as in automobile and ship manufacturing.
Copper prices are currently at an all-time high, above $4.5 a pound. In comparison, aluminum is priced at about $1.1 a pound. Given the costs of retooling manufacturing processes and the extra aluminum it takes to conduct the same amount of electricity as copper, it often becomes more economical to use aluminum instead of copper if copper prices rise above $3.50 a pound.
Alcoa closed Tuesday at $17.49, gaining $0.25, or 1.45 percent.
Traders should look to emerging market stocks to acquire put options, while also selling Japan stock puts, according to Barclays (NYSE:BCS).
Barclays believes the shares of emerging-market sotcks may drop because of the increase in commodity prices, while Japanese stocks could rally on reconstruction related to the devastation from the earthquake in Japan.
Maneesh Deshpande, heads of the top-ranked equity-linked strategies team in Institutional Investor magazine’s 2010 survey, said, “Japanese gross domestic product grew at a relatively fast rate for the next eight quarters. Against this outlook for Japan, emerging markets face increasing headwinds on account of mounting inflation due to increasing commodity prices and geopolitical risks in the Middle East.”
Bloomberg data show that the Japan ETF’s implied volatility, the key gauge of option prices, for at-the-money options expiring in 30 days is 28.63. That’s down from 51.84, the highest in more than two years, as of March 16. The current reading compares with a median of 19.56 over the past year.
Deshpande recommends buying iShares MSCI Emerging Markets (NYSEArca:EEM) exchange-traded fund and selling January $9 puts on the iShares MSCI Japan ETF (NYSEArca:EWJ).
Halliburton Co. (NYSE:HAL) announced it is going to boost its activity at its Saudi Manifa project, generating speculation as to the reasons for the move.
Some suggest it points to limited supplies of the oil reserves in the country, and others that it is seeking to increase the amount of spare capacity in order to push back against rising oil prices around the world.
Other companies that could benefit from the increased production in Saudi Arabia, if that is in fact what is going on, will be Nabors Industries (NYSE:NBR), Weatherford International Ltd. (NYSE:WFT), Schlumberger Ltd. (NYSE:SLB) and Baker Hughes (NYSE:BHI).
For Halliburton, they are now operating one rig at Manifa, but it has had a goal from the beginning to operate up to 10 rigs in the project.
Others that could benefit from a increase in drilling in Saudi Arabia would be those who are specialists in drilling in shallow waters.
Halliburton closed Tuesday at $49.00, gaining $1.10, or 2.30 percent.
North American operations of Toyota (NYSE:TM) and Honda (NYSE:HMC) are being hit by shortage as a consequence of the earthquake in Japan
Toyota has asked its dealers in the region to stop ordering over 200 replacement parts from Japan, while Honda Motor announced it will temporarily lower production at its North American factories starting today.
Vehicles under restriction for Toyota are Toyota, Scion and Lexus models, which parts won't be delivered unless its for the purpose of repair and not production.
Parts that have to be watched closely include shock absorbers, body panels and brake rotors. Most of those are in connection to the hybrid versions of Prius and Highlander SUV.
Honda is experiencing shortages of some of its transmission, engine, and electrical parts that are exported from Japan. Consequently, it will lower the number of hours that some North American assembly lines operate daily.
It isn't certain at this time what specific models are under pressure and where the production cuts will come for Honda.
Honda closed Tuesday at $37.38, gaining $0.30, or 0.81 percent. Toyota Motors closed at $79.71, falling $0.84, or 1.04 percent.
In light of the past actions of Oracle (NASDAQ:ORCL) when it enters into the legal arena, it's going to be a rough, legal street fight between them and Google (NASDAQ:GOOG) over the alleged unlicensed use of Java technology.
When Oracle bought Sun Microsystems, arguably to control the rights to the Java language, Java godfather James Gosling didn't want any part of it. Now he's got a job in Mountain View, and while Gosling says he doesn't know what he'll be working on, you can bet a pretty penny that he'll see a great deal of Android action and become very familiar with Google's legal eagles.
Gosling has made no secret of his disdain for Oracle and its charismatic leader, Larry Ellison. After leaving Oracle, he detailed his fears about Sun's Solaris platform and assorted Java projects meeting a sordid fate. He drew parallels between Ellison and Genghis Khan, and noted that "Ethics and consistency aren't exactly the LPOD's reputation." So what's an LPOD? "Larry, Prince Of Darkness," of course.
So Gosling has both the background to make a difference to the Android defense, and an axe to grind that's big enough to keep him motivated.
Google closed Tuesday at $581.73, gaining $6.37, or 1.11 percent. Oracle closed at $33.16, up $0.60, or 1.86 percent.
Bank of America Corp. (NYSE:BAC) is again the recipient of a lawsuit related to foreclosure practice, this time from shareholders asserting the bank didn't "properly record many of its mortgages when originated or acquired, which severely complicated the foreclosure process when it became necessary.”
Not only was the paperwork in disarray, claim the shareholders, bu the bank allegedly also concealed the number of workers available to process the huge number of foreclosed loans was insufficient.
Consequently, they claim that resulted in the drop in price of shares of Bank of America by 42 percent after the issues were made public.
The giant bank is accused of breaching fiduciary duty, wasting corporate assets and mismanagement, according to the complaint.
Bank of America closed Tuesday at $13.35, falling $0.02, or 0.15 percent.
Netflix (Nasdaq:NFLX) and Viacom (NYSE:VIA-B) have entered a deal for the Canadian market to stream a portion of its film library.
The Canadian arm of Netflix just got a little longer, as the company announced a fresh content deal with Viacom's Paramount studio for streaming Up North. This five-year contract, with unspecified financial heft, will stream both new releases and back-catalog films to Canadian subscribers. The deal includes 350 titles, starting with immediate access to Iron Man 2 and The Curious Case of Benjamin Button.
That's far from an all-access pass to Paramount's library, given that IMDB lists more than 3,700 feature films with Paramount among their producers and rightsholders. On the other hand, the Canadian service has been devoid of serious hit material so far, and adding films like Titanic and Wayne's World surely can't hurt the quest to sign up millions of hockey-loving, poutine-cooking subscribers, eh?
And then there's the ally angle. Paramount spokesman Hal Richardson is positively gleeful about this contract, in stark contrast to the verbal barbs Warner CEO Jeff Bewkes has hurled. "We are especially delighted that this arrangement serves to broaden the growing relationship with our friends at Netflix," Richardson said. You won't hear that kind of language from Bewkes anytime soon.
Netflix closed Tuesday at $237.38, gaining $0.06, or 0.03 percent. Viacom closed at $46.27, up $0.79, or 1.74 percent.
Solar Companies DAQQ (DQ), (JKS), (SOL), (JASO), (STP), (RSOL), (ASTI), (WEST) to Benefit from Japan Nuclear Challenges
The hoopla surrounding the challenges facing the nuclear industry from the earthquake in Japan, which some are attempting to spin as an extremely valuable event for solar companies such as DAQQ New Energy (DQ), JinkoSolar Holding Company (JKS), Renesola (SOL), JA Solar Holdings (JASO), Suntech Power Holdings (STP), Real Goods Solar (RSOL), Ascent Solar Technologies (ASTI) and Akeena Solar (WEST), is just that: spin.
Nothing has changed in the overall nuclear sector as far as the majority of countries still committed to using nuclear plants to generate electricity, other than the usual weenies from Europe and to a lesser extent, the United States.
But that was going to account for very little in the way of nuclear growth, and in the United States, most of it will just be going over existing plans and plants in order to be sure things are as safe as they can be.
Other than that, China is doing something similar, and is simply making sure risk is managed. China has already said it's going to continue on with its nuclear strategy, and they're by far the country with the most nuclear plants scheduled to be built.
Nothing has changed in the solar sector, which will continue to be pressured downward because the socialist countries of Europe can't afford the subsidies as the sovereign debt crisis continues to threaten to end the euro, as well as the European Union itself.
That's not to say investors can't make money in solar if they know what they're doing, just that the idea solar is a viable source of energy in the future is a long way from becoming a reality, if it ever does.
Solar companies will come under pressure for a long time, as there doesn't appear to be any catalyst out there to suggest we're going to be leaving the global recession any time soon, no matter how the mainstream media attempts to spin it.
Russia's investment climate is already so bad that even a battle between BP and its shareholders at Anglo-Russian TNK-BP will not do anything to influence experienced investors, according to a senior Kremlin aide.
BP (NYSE:BP) was blocked from expanding its presence in Russia through a $16 billion share swap and joint exploration plans with Russian state giant Rosneft (ROSN.MM) by a Stockholm arbitration panel last week, after TNK-BP's (TNBP.MM) billionaire partners took the case to court.
The move has led to concerns that other energy firms looking to extend their reach may face similar problems.
"Right now our investment climate is so bad that it won't be affected," President Dmitry Medvedev's top economic aide, Arkady Dvorkovich, told reporters.
He said he was hopeful that the dispute would be settled, and when asked what the Kremlin's advice was, Dvorkovich responded: "Find a solution that is acceptable to both sides. I think they'll find one."
Measured by Ebitda, analyst David Novosel of Gimme Credit writes that Oracle's (NASDAQ:ORCL) leverage ratio should improve as 2011 goes on, dropping to 1 times from the 1.4 times in 2010.
Novosel said, “Revenue is increasing at a double digit pace, while margins are moving significantly upwards. Free cash flow is enormous and leverage is dropping.”
“Spreads of +55 on the 2019 issue are not overly attractive, but given the strong credit profile, we think these bonds would provide excellent stability should overall corporate spreads come under pressure.”
On a relative basis Novosel sees the bonds of Oracle becoming more attractive as the year goes on.
Oracle closed Tuesday at $33.16, gaining $0.60, or 1.86 percent.
Saying the arthritis drug Orencia isn't a cost-effective alternative to other drugs, the U.K.’s health-cost agency said they don't back the offering by Bristol-Myers Squibb Co. (NYSE:BMY).
Bristol-Myers Squibb Co. failed to win the backing of the U.K.’s health-cost agency for treating moderate to severe rheumatoid arthritis in patients who haven’t responded to one or more disease-modifying drugs.
Orencia, in combination with older medicine methotrexate, isn’t a cost-effective use of National Health Service funds compared with rival treatments, the National Institute for Health and Clinical Excellence said today in an e-mailed statement. The agency already recommends four medicines for second-line use: Abbott Laboratories (NYSE:ABT)’ Humira, Pfizer Inc. (NYSE:PFE)’s Enbrel, Merck & Co.’s (NYSE:MRK) Remicade and UCB SA (UCB)’s Cimzia.
Bristol-Myers closed Tuesday at $26.84, down $0.14, or 0.52 percent.
After the quarterly report from Lennar (NYSE:LEN), Wells Fargo commented that the earnings were weaker than reported, citing the $0.19 a share garnered from a legal settlement and an extinguishment of JV debt, which added another $0.08 to the total.
Wells Fargo said, "with investor attention keenly focused on the spring selling season, LEN's orders may be considered weak, as they missed our estimate and we believe they also missed consensus."
In other words, earnings per share is much weaker than the quarterly reported indicated, and it appears that is going to continue on throughout 2011.
Lennar closed Tuesday at $19.07, falling $0.68, or 3.44 percent.
In the ongoing trademark battle between Microsoft Corp. (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL), both companies have hired linguists to serve as experts in the battle over whether or not the government can grant a trademark for the term “app store.”
Microsoft on Tuesday filed its latest argument with the U.S. Patent and Trademark Office, which included the opinions of a linguistic expert who supported the software giant’s argument that the term “app store” was generic and shouldn’t be trademarked by Apple.
“The compound noun app store means simply ‘store at which apps are offered for sale,’ which is merely a definition of the thing itself–a generic characterization,” linguist Ronald Butters wrote.
Microsoft closed Tuesday at $25.49, gaining $0.08, or 0.31 percent. Apple closed at $350.96, up $0.52, or 0.15 percent.
In an interesting and possible scenario put forth by Research firm IDC, they see Microsoft Corp.'s (NASDAQ:MSFT) Windows Phone 7 beating out Apple's (NASDAQ:AAPL) by 2015, citing the partnership they have with mobile phone giant Nokia (NYSE:NOK).
"Up until the launch of Windows Phone 7 last year, Microsoft has steadily lost market share while other operating systems have brought forth new and appealing experiences," said Ramon Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends team. "The new alliance brings together Nokia's hardware capabilities and Windows Phone's differentiated platform. We expect the first devices to launch in 2012. By 2015, IDC expects Windows Phone to be number 2 operating system worldwide behind Android (NASDAQ:GOOG)."
IDC also said they see Apple's share shrinking some from the projected 2011 levels over the same period of time ending in 2015.
For Google, they see Android continuing to gain market share and ultimately dominating the sector, rising to a 45.40 share by 2015, up from the 39.5 percent share expected by the end of 2011.
"Android is poised to take over as the leading smartphone operating system in 2011 after racing into the number 2 position in 2010," Llamas added. "For the vendors who made Android the cornerstone of their smartphone strategies, 2010 was the coming-out party."
For 2011 IDC estimates Research in Motion (NASDAQ:RIMM) will have a market share of 14.9 percent, dropping to about 13.70 percent by 2015.
The bottom line for the Nokia, Microsoft projection is to deliver the goods. If they do, it could be a big player in the market, if not, they'll gradually shrink together in the mobile sector, with Nokia being hit the hardest.
Nokia closed Tuesday at $8.68, falling $0.06, or 0.69 percent. Microsoft closed at $25.49, gaining $0.08, or 0.31 percent.
According to people aware of the situation, Microsoft (NASDAQ:MSFT) reportedly will offer a mobile-payment feature in the next version of its Window Phone 7 operation platform. Presumably it may be offered with the release of its first Nokia (NYSE:NOK) phone, although that's not a certainty.
With the source saying the first phones with the feature may be released by the end of the year, it lines up with the goal of trying to bring a Nokia phone to market in that time period, or at latest, in the early part of 2012.
Users would be able to purchase items in stores by bumping a Windows Phone device against a compatible cash register.
The technology is based on what is identified as Near Field Communication, which allows devices to communicate wirelessly with objects close by. NFC technology enables not only payments but also lets consumers use a handset for such tasks as redeeming coupons and loyalty points at local merchants.
Microsoft closed Tuesday at $25.49, up $0.08, or 0.31 percent.
Sprint (NYSE:S) seems to be losing its focus on the proposed deal for AT&T (NYSE:T) to acquire T-Mobile, fighting hard to influence the merger not to be allowed to go forward.
The problem for Sprint is even if the deal isn't allowed to go ahead, how does that help them if after the smoke clears they still have to deal with the same issues they faced before the bid by AT&T.
Sprint said in a press release that the merger "would reverse nearly three decades of actions by the U.S. government and the courts that modernized and opened U.S. communications markets to competition."
That would be more convincing if Sprint was in a more competitive position. But since they're struggling to find themselves, it's hard to see why the deal shouldn't go through from that perspective, as if it doesn't, they would still have to compete against the two entities.
It's there they must find the answer, not in worrying about what its competitors are doing that they have no control over.
When measured against lobbying spend, Sprint is also way behind AT&T, making the time and effort spent on the actions dubious at best, and unlikely to succeed.
Instead they should focus on growing and innovating their way out of the challenges they face; something they'll have to do either way.
Sprint closed Tuesday at $4.62, falling $0.16, or 3.35 percent.
Even though gold prices have found a level spot recently, over the last 12 months it has performed strongly, and among the top gold miners during that period of time are New Gold, Inc. (AMEX:NGD), IAMGOLD Corp. (NYSE:IAG), Harmony Gold Mining Co. Ltd. (NYSE:HMY) and Compania de Minas Buenaventura SA (NYSE:BVN).
New Gold had a strong 12 months, rising by 159 percent during that time, with a trailing P/E ratio of 25.3x, has a market capitalization of $4.5 billion. Estimates are for the company to generate $0.21 a share in earnings over the next year.
IAMGOLD Corp. also had a solid 12 months, generating a return of 71 percent during the period. They have a trailing P/E ratio of 30.2x. Expectations are they'll earn $0.47 a share in 2012.
Harmony Gold Mining jumped 56 percent over the last year, with quarterly earnings soaring 170.3 percent over the same quarter last year. It has a trailing P/E ratio of 248.9x. Earnings for 2012 are estimated to come to $0.44 a share.
Compania de Minas Buenaventura SA came in equal with Harmony Gold as far as returns go, also rising by 56 percent over the last 12 months. Its quarterly earnings grew 17.2 percent over last year in the same quarter. BVN has a trailing P/E ratio of 17.09x. Next year they are projected to earn $0.96 a share.
Among all the metals companies, one of the top performers was Silver Wheaton (NYSE:SLW), which grew returns at a rate of 187 percent. Quarterly earnings rose 142 percent over the same quarter last year. Its trailing P/E ratio is 53.2x. In 2012 its expected to earn $0.60 a share.
Valeant Pharmaceuticals Inc. (NYSE:VRX) announced it has made a bid to acquire biopharmaceutical company Cephalon Inc. (NASDAQ:CEPH) for $5.7 billion in cash.
Valeant resorted to airing out its proposed takeover bid after Cephalon rejected its behind-the-scene overtures, saying the offer was too low.
The proposed bid by Mississauga, Ontario-based Valeant amounts to $73 a share and represents a 27 percent premium over Frazer, Penn.-based Cephalon's closing price on Monday.
Valeant said it intends to begin a consent solicitation process next week in an effort to replace Cephalon's board with its own nominees.
It also noted that it has received a letter of financing from Goldman Sachs & Co. (NYSE:GS), which it would use to fully fund a Cephalon acquisition.
Cephalon closed Tuesday at $58.75, up $1.18, or 2.05 percent. In after hours trading it soared to $72.89, gaining $14.14, or 24.07 percent.
Valeant closed at $44.39, up $0.13, or 0.29 percent. It jumped to $51.00, gaining $6.61, or 14.89 percent.
Tuesday, March 29, 2011
March auto sales in the U.S. are expected to be up for March, as major automakers like Ford Motor (NYSE:F), General Motors (NYSE:GM) and Toyota (NYSE:TM) benefit from the turnaround story of the industry.
Concerns are starting to rise though on the impact the rising costs of oil and gas will have on sales, which are estimated to come in overall for the month at a growth rate of 12 percent over last year.
Supply and production problems resulting from the earthquake in Japan remains a major factor as well, with much uncertainty as to the long-term effects on the sector.
Growth for March is also expected to be lower than expected because of the cutting back of incentives by most of the automakers so they could boost margins and earnings, although that will be at the expense of revenue; not a bad thing.
The auto companies will report sales for March on Friday.
Ford was trading at $14.84, falling $0.02, 0.17 percent, as of 2:47 PM EDT. General Motors was at $31.04, gaining $0.19, or 0.62 percent. Toyota was trading at $79.84, down $0.71, or 0.88 percent.
Lazard Capital Markets analyst Colin Sebastian likes what he sees with the push by Amazon.com (NASDAQ:AMZN) into building a “cloud-based” digital music store, saying it's “the next logical step for Amazon in facilitating digital media consumption” and that “The service also pre-empts similar services likely coming from Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG).”
"Amazon’s move confirms that a land grab is playing out between Apple, Amazon, Google and, more recently, Facebook, racing to secure market share in all forms of digital media: music, videos, books and other content. Critically, the common denominator for all these services is the requirement for a large-scale web-based infrastructure, which all of these companies possess. We believe that Amazon is particularly well situated here, able to leverage its AWS infrastructure for these services," Sebastian concluded.
Amazon.com customers will be empowered to store music purchases they make on the servers of the company and play them back on their mobile devices.
Sebastian maintains a "Buy" rating on Amazon, with a price target of $220 on the online retailer.
Amazon was trading at $174.34, gaining $4.99, or 2.95 percent, as of 2:38 PM EDT.
The selloff of shares of Teekay Tankers Ltd. (TNK) has been overdone according to Bank of America (NYSE:BAC), which raised its rating on the company from "Underperform" to "Buy."
Teekay should also benefit from the excess naphtha on the market, as refiners in Europe are blending it into gasoline to ship to the American market.
Naphtha is lightest and most volatile fraction of petroleum, which can be converted into oil or ethylene. That market has plunged after the earthquake in Japan, leaving a glut of naphtha in the market to deal with as demand falls.
Teekay was trading at the highest intraday levels since May 2009, rising to $10.86 at one point.
They are trading at $10.67, gaining $0.92, or 9.44 percent, as of 2:28 PM EDT.
After JPMorgan (NYSE:JPM) raised its price target on rare earths giant Molycorp (NYSE:MCP) today, shares of the company jumped, helping to boost the overall rare earths sector.
Avalon Rare Metals (AMEX:AVL), Lynas Corporation (LYSCF), Neo Material Technol (NEMFF) and Rare Element Resources (AMEX:REE) are all up on the day.
The catalyst for the increase in the price target of Molycorp by JPMorgan was the recent boost in domestic rare earth prices in China.
The giant bank maintains their "Overweight" rating on Molycorp, while raising its price target from $66 to $74. They see the prices as being sustainable for a period of time.
Rare earths ETF Market Vectors Rare Earth/Strategic Metals (NYSE:REMX) was also trading up today.
Molycorp was trading at $59.68, gaining $4.17, or 7.51 percent, as of 2:17 PM EDT. Market Vectors Rare Earth/Strategic Metals was at $25.12, up $0.49, or 1.99 percent. Avalon was at $7.83, up $0.60, or 8.30 percent. Rare Element Resources rose to $13.38, gaining $1.19, or 9.76 percent.
Even though Hertz (HTZ) guided a little better than analysts' estimates, it's still a dismal outlook, as the company expects a net loss of $17.3 million to $22.2 million.
Combined with news on Monday Bank of America (NYSE:BAC), Clayton, Dubilier & Rice LLC and The Carlyle Group sold an approximate combined total of 50 million Hertz Global shares, has the stock reeling.
The guidance from the company was the result of global sales falling because of winter storms they said, although the higher price of gas may be part of the story as well, and will most likely be going forward as companies and consumers again get more tight with their money.
Hertz was trading at $15.45, falling $0.82, or 5.04 percent, as of 2:07 PM EDT.
Shares of Anadigics Inc. (NASDAQ:ANAD) continue to be under pressure on the news Chief Executive Officer Mario Rivas and senior vice president Greg White have resigned.
Earlier in the trading session the share price fell about 12 percent, although it has recovered for the maker of cell phone chips.
Named as new CEO for the company is Ron Michels.
Anadigics is trading at $4.37, down $0.28, or 6.02 percent, as of 1:56 PM EDT.
Shares of for-profit educators like Apollo Group Inc. (APOL), Strayer Education Inc. (STRA), DeVry Inc. (DV) and ITT Educational Services Inc. (ESI) continue to fall, this time on the weak revenue guidance from Apollo of $4.25 billion, down from analyst estimates of $4.55 billion.
The overall sector has been under pressure for some time, and everyone time a negative catalyst comes about it is hit hard, underscoring the fragility of the for-profit business market at this time.
Apollo was trading at $39.66, down $2.69, or 6.35 percent, as of 1:51 PM EDT. Strayer was at $126.90, falling $6.77, or 5.06 percent. DeVry was trading at $54.23, down $0.70, or 1.27 percent. ITT Educational was at $67.43, down $3.24, or 4.58 percent.
Shares of ON Technologies (Nasdaq:ONNN), IBM (NYSE:IBM), Magma Design Automation (Nasdaq:LAVA) and Corning Inc. (NYSE:GLW) appear to be undervalued, as the tech sector continues to roll, even in the midst of concerns it could be approaching bubble proportions again.
Technology is well beyond peak earnings from late 2007 - proof that these companies are getting the job done despite doubts.
IBM (IBM) is an example of that assertion. 2010's EPS of $11.58 beat 2009's $10.01, both of which were better than 2007's $7.13. In fact, IBM is working on its seventh year in a row of bottom line growth.
Semiconductor maker ON Technologies (ONNN) is just coming off its best year in its history. Without using any accounting tricks, it has a trailing P/E of 15.5 and forward-looking (12-month) one of 7.71, making it desirable for investors.
Strongest Earnings Growth
If Magma Design Automation (LAVA) hadn't already posted a significant improvement in earnings on a rolling year-over-year basis, it might be hard to believe it could grow income by 59 percent in fiscal 2012, which it probably will.
Corning Inc. (GLW) with its PEG ratio of 0.96 appears to have found the best balance profit growth and current valuation. GLW is priced under 10 times its past and future earnings. It grew earnings by 41 percent, and is on pace for modest growth this and next year. With more beats than misses over the last couple of years though, the G in the PEG ratio may end up being bigger than expected.
IBM was trading at $162.81, up $1.44, or 0.89 percent, as of 1:14 PM EDT. ON Semiconductor was at $9.99, up $0.01, or 0.10 percent. Magna was trading at $6.585, down $0.055, or 0.83 percent. Corning was at $21.19, down $0.26, or 1.19 percent.
Shares of AK Steel (NYSE:AKS) and Home Depot (NYSE:HD) are up today, helping to balance the impact of the news Standard & Poor’s downgraded the credit ratings of Portugal and Greece.
AK Steel rose over 4 percent after SAC Capital Advisors LP reported a 4.8 percent stake in the company.
Home Depot was up over 2 percent on news the largest U.S. home-improvement retailer sold $2 billion in bonds to raise cash and finance buybacks.
Home Depot was trading at $37.45, gaining $0.80, or 2.18 percent, as of 1:00 PM EDT. AK Steel was at $16.34, rising $0.73, or 4.68 percent.
Giant pharmaceutical companies like AstraZeneca (NYSE:AZN), Sanofi-Aventis SA (NYSE:SNY), Takeda Pharmaceutical (TKPHF.PK), Bristol-Myers Squibb (NYSE:BMY), Merck (NYSE:MRK), Pfizer (NYSE:PFE) and GlaxoSmithKline (NYSE:GSK) won a court battle which went to the U.S. Supreme Court, where it was ruled a California county can't sue pharmaceutical companies because they allegedly overcharged public health-care facilities for prescription drugs.
The unanimous opinion was that California's Santa Clara County did not have a legal right to bring the lawsuit in the first place.
Claims made against the companies by the county were pricing obligations to health-care facilities that serve the poor, and whether those facilities have a right to sue drug companies to enforce those obligations.
Under agreements with the federal government, drug makers must cap the prices they charge medical facilities that provide safety-net health services.
The conclusion was the responsibility for enforcement of pricing belongs to the U.S. Department of Health and Human Services.
With rising costs pressuring earnings at food companies like Kraft (NYSE:KFT), Proctor & Gamble (NYSE:PG), General Mills (NYSE:GIS) and Dole (NYSE:DOLE), the companies have decided to offer less for more, as they shrink the size of their offerings while charging more.
This isn't anything new, as this has been the typical response of the food companies at times when consumer budgets are tight.
So when a consumer buys a bag of something, for example, now they'll find about 20 percent less than what it held before, but at the same price.
In tough times consumers are more aware of prices than they are on volume in the package, so companies can make these types of moves with a minimum of fuss.
Rising costs of inputs in the supply chain are the reasons for the companies changing their strategies.
Cisco Systems Inc. (Nasdaq:CSCO) announced today it is acquiring newScale Inc., a company that provides cloud-services software for IT units or businesses.
Parvesh Sethi, senior vice president of Cisco Services said, "Cloud computing represents a major shift in the evolution of the Internet, and as more customers migrate from traditional IT infrastructures, the need for rapid self-provisioning and efficient management becomes increasingly critical. With the acquisition of newScale, Cisco will be able to accelerate the deployment of cloud services through a service catalog and self-service portal that allows customers to easily manage their IT infrastructures."
Term of the deal, which is expected to close in the second half, weren't revealed.
Cisco was trading at $17.31, up $0.18, or 1.05 percent, as of 12:16 PM EDT.
The interference in Vale S.A. (NYSE:VALE) by the government of Brazil has expanded in its quest to oust CEO Roger Agnelli, as they're now also seeking to rid the company of chairman Ricardo Flores, as it attempts to force the company into getting in line with so-called national interests.
That's another way of saying they want to use the earnings of the company as the personal piggy bank of the government, as with most governments around the world, it refuses to employ austerity measures and limit its size, which is what is needed more than anything else to ease the pressures on sovereign debt, which has come about from governments playing god and making promises they can't keep because they aren't sustainable financially.
Government officials have attempted to influence the direction of the company in the past, telling leaders where they should invest capital, such as in infrastructure and steelmaking.
Infrastructure is of course another way of saying government pet projects.
In the case of steelmakers, that would create a conflict of interest with clients they work with, creating a potentially volatile situation, something the Brazilian government apparently cares little about.
Vale was trading at $32.89, up $0.68, or 2.11 percent, as of 12:10 PM EDT.
French firm Converteam, a maker of automation systems used in the oil and gas sector, has had a bid of $3.2 billion from General Electric (NYSE:GE) to take over the company.
John Krenicki, a GE vice chairman head and of the Energy Infrastructure unit, said, "This acquisition pretty much touches every aspect of our energy portfolio."
Not only does the electric motors made by Coverteam bring a larger presence in the oil and gas sector for General Electric, but expands it possibilities in the mining and metal sectors as well, which are growing fast on increasing demand.
General Electric, which has had its revenue driven by its energy division, will take a break from acquisitions in the sector once the deal for Converteam closes, which is expected to be in the third quarter.
Converteam generated about $1.5 billion in revenue in 2010.
General Electric was trading at $19.73, falling $0.02, or 0.13 percent, as of 11:56 AM EDT.
Nokia (NYSE:NOK) and Apple (NASDAQ:AAPL) are both trading lower today, as the mobile giant boosted the number of patent-infringement claims against Apple.
In the second patent infringement filing with the U.S. International Trade Commission against Apple, Nokia says Applie has violated numerous patents they hold in reference to use in iPads, iPods, Macs and iPhones.
Areas covered in the patents include call quality, positioning, use of Bluetooth accessories, multi-tasking operating systems and data synchronization.
Nokia head of IP, Paul Melin said, “Our latest ITC filing means we now have 46 Nokia patents in suit against Apple, many filed more than 10 years before Apple made its first iPhone. Nokia is a leading innovator in technologies needed to build great mobile products and Apple must stop building its products using Nokia’s proprietary innovation.”
Nokia was trading at $8.68, down $0.06, or 0.69 percent, as of 11:43 AM EDT. Apple was trading at $349.84, falling $0.60, or 0.17 percent.
Shares of BP (NYSE:BP) are taking a hit today on news managers at the company may be pursued by prosecutors with charges of manslaughter.
Also weighing on the stock is the recent battle with its Russian billionaire partners in TNK-BP and its attempt to partner with Rosneft.
In regard to that situation, brokerage Collins Stewart said its lowering its rating on the company from "Hold" to "Sell."
The manslaughter charges are being talked about by prosecutors from the U.S. now, but officials wouldn't confirm one way or the other whether it is under consideration or not, as sources close to the matter who didn't want to be identified revealed the possible scenario of criminal charges.
Most of that will be determined by whether or not the company is deemed "grossly negligent" in the accident. If they are, not only would that open the door for possible criminal charges, but also for massive fines.
BP was trading at $44.91, down $1.13, or 2.45 percent, as of 11:38 AM EDT.
Citing alleged damage from the 2008 Varanus Island gas plant explosion off the coast of Western Australia, Alcoa (NYSE:AA) as sued Apache Energy and its partners for $158 million.
Partners also having a complaint filed against them by Alcoa are Kufpec and Tap Oil.
According to the complaint, "Apache Energy failed to exercise reasonable and adequate care and skill in operating, maintaining and/or repairing the 12-inch SGL (sales gas line) so as to ensure it would not corrode to the point where rupture of the pipeline occurred as it did in the incident."
If Alcoa ends up winning the case, others like mining giants BHP Billiton (NYSE:BHP), Newcrest and Wefarmers are expected to enter the legal fray.
Alcoa closed Monday at $17.24, gaining $0.15, or 0.88 percent.
The government of Brazil is reportedly interfering in giant miner Vale's (NYSE:VALE) inner workings, as they attempt to have CEO Roger Agnelli removed from his position, according to media outlets in the country.
Brazil's government has attempted to force Agnelli out for years, accusing him of not doing enough to boost the economic development of the country; something only a socialist would accuse Agnelli of doing, as a business doesn't exist for the purpose of increasing the economic condition of a country, but to be profitable.
When it focuses on generating profits, the economic boost will come on its own, not the other way around.
Apparently this has reached beyond the past pressures of the government of attempting to remove Agnelli, to having already deciding that and are now looking for a replacement for him, according to the newspaper O Estado de S. Paulo.
While officially the government isn't allowed to fire Agnelli, they can unofficially work behind the scenes, as they have been doing, to influence the decision by bringin other major shareholders on board for the decision and action.
Vale S.A. closed Monday at $32.21, down $0.13, or 0.40 percent.