Late-Night Headlines
Bloomberg:
- French President Nicolas Sarkozy said Georgia agreed to a modified plan to end fighting in the breakaway region of South Ossetia after the former Soviet republic's military was routed by Russia in a five-day war.
- CVS Caremark Corp.(CVS), the second- biggest U.S. drugstore chain, said it would buy Longs Drug Stores Corp. for $2.7 billion to expand its reach in the western U.S., closing the gap with larger Walgreen Co. Longs Drug has 521 locations in California, Hawaii, Nevada and Arizona, giving CVS about 6,800 stores, in line with Walgreen, the Deerfield, Illinois-based chain with 6,849.
- U.S. stocks pulled ahead of Brazil, Russia, India and China this week for the first time in 2008, spurred by the Federal Reserve's efforts to cut borrowing costs even as the biggest developing countries are raising theirs. the S&P 500's 12 percent loss this year leaves it ahead of Brazil's Bovepsa Index, whose drop through last week had been the smallest of the five countries. The U.S. equity benchmark claimed the lead after banks rallied 22 percent and the steepest monthly retreat in commodity prices sent the Bovespa into a bear market. ``You have the money on the move,'' said Michael Shaoul, chief executive officer of Oscar Gruss & Son Inc., a New York- based brokerage. ``So many people had cut their allocations to the United States that there was nowhere else to go. It's like a fire in an empty theater. If there's no audience, you're not going to find a stampede to the exit.'' The Bombay Stock Exchange's Sensitive Index dropped 25 percent in 2008, China's CSI 300 Index decreased 54 percent and Russia's benchmark RTS Index fell 21 percent. Brazil's Bovespa has lost 15 percent this year.
- China's stocks slumped for a fifth day, with turnover plunging to a 21-month low, on concern the bear market will deepen and as investors focused on the nation's Olympic gold medal tally in Beijing. The benchmark CSI 300 Index has tumbled 12 percent since the Games started on Aug. 8 in Beijing, to the lowest in 18 months. The value of stocks traded on the two primary exchanges yesterday fell 79 percent below the levels when the measure rose to a record on Oct. 16.
- Applied Materials Inc.(AMAT), the largest maker of chip-production machinery, forecast a rebound in new orders, signaling that a slump spurred by memory-chip companies may be nearing an end. The shares rose 4.5 percent in after-hours trading.
- Nvidia Corp.(NVDA), the second-largest maker of computer-graphics chips, posted its first quarterly loss in six years. The shares jumped 9.3% in late trading after the company said it boosted a share buyback program by $1 billion.
- Gold demand fell 19 percent in the second quarter as near-record prices and wide fluctuations in costs discouraged purchases from jewelers, the world's biggest users, the producer-funded World Gold Council said. Purchases for jewelry fell 24 percent and sales to India, the world's largest gold consumer and jewelry buyer, plunged 45 percent, the group said. India accounted for 27 percent of total gold demand in 2007. Demand in the Middle East dropped 12 percent, the Gold Council said. Investment in exchange-traded funds rose by 4 metric tons compared with a redemption of 2.6 metric tons a year earlier, the industry group said. It was still a 94 percent decline from the first quarter, when so-called ETFs attracted 72.7 tons of investment. Gold supply rose 1 percent from 797 tons to 802 tons, the council said. Central bank sales fell 43 percent to 88 tons and gold producers bought back 131 tons to eliminate hedge positions.
- Copper fell to a six-month low on speculation that a strengthening dollar will erode the appeal of metals as an alternative investment and as slowing industrial demand boosts stockpiles. The dollar gained 3.6 percent against the euro last week while copper slid 6.9 percent. Stockpiles in warehouses monitored by the London Metal Exchange rose to the highest since Feb. 14, jumping 39 percent from a one-year low on May 7. ``Copper stocks are up slightly today, and now seem to be pulling away from the 150,000-ton mark,'' Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut, said today in a report. ``Charts still look weak, and we see further downside, as is the case with most of the other metals.''
- Platinum fell to the lowest since December and palladium plummeted on speculation that the dollar will climb higher against the euro, eroding demand for metals as an alternative investment. ``The dollar continues to be the main driver of the markets,'' Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said today in a note. Some currency traders ``are still insisting that the dollar should correct to as low as $1.44 per euro, so if this will come to fruition, it would no doubt drive the entire precious-metals complex significantly lower.'' If there is ``better news for the dollar, watch out: That knife will be dropping quickly.''
- Japan's economy contracted last quarter, bringing the country to the brink of its first recession in six years, as exports fell and consumers spent less. Gross domestic product shrank an annualized 2.4 percent in the three months ended June 30 after expanding a revised 3.2 percent in the first quarter, the Cabinet Office said today in Tokyo.
- Apollo Global Management LLC, the private-equity firm run by Leon Black and Joshua Harris, had a net loss of $96.4 million in the quarter ended March 31 as it moves forward with a listing on the New York Stock Exchange.
- Russia's RTS stock index is turning into the world's worst performer this quarter as tumbling oil, a war in Georgia and the probe of a steel company remind investors owning shares in the former Communist nation can be perilous. The RTS fell 22 percent since June 30, even after President Dmitry Medvedev halted the invasion of Georgia yesterday, sending the index up 3.5 percent. The retreat this quarter is the steepest among indexes in the world's 20 biggest stock markets, according to data compiled by Bloomberg.
MarketWatch.com:
- Many borrowers are starting to pay less interest and being given more time to pay their mortgages.
CNBC.com:
- Home Prices Start to Show Signs of a Turnaround. "Anybody who tells you they know when the housing market will bottom is delusional, but anybody who denies there are some positives out there that could make the housing market bottom fairly soon is equally delusional," said Karl Case, the co-developer of a widely watched gauge of the housing industry and an economics professor at Wellesley College in Massachusetts. Residential construction as a percentage of real gross domestic product is below the historical bottom, Case noted. Case, whose research has focused on real estate markets and prices for over 20 years, said certain regions of the country now look similar to when they bottomed in past down cycles.
- What Financial Stocks Are Shorted the Most?
NY Times:
- Gains Seen in Curbing Short Sales.
Fox Business Network:
- The number of foreclosures in the
IBD:
- Varian Medical(VAR): New Products Drive Growth For Medical Imaging.
- US power grid in better shape 5 years after blackout.
Reuters:
- UN Peacekeepers may have committed sex abuse in Congo.
- House Republican Leader John Boehner on Tuesday urged House Speaker Nancy Pelosi to call lawmakers back into session to pass a bill expanding drilling in federal waters, now that she was willing to permit a vote on such a measure.Reversing her position, Pelosi said she was willing to schedule a vote in the House of Representatives on legislation to expand offshore drilling, if the bill addressed other energy issues, such as extending tax credits for solar and wind energy and releasing oil from the Strategic Petroleum Reserve.
- Fed still worried about inflation despite oil retreat.
- Best Buy Co Inc (BBY) will be the first national retailer to sell Apple Inc's (AAPL) iPhone in the United States in a partnership that could help drive sales of a device expected to be one of the hottest gadgets this holiday season.
Financial Times:
- OPEC last month pushed its production to the highest level in its 48-year history even as demand was slipping in the US and Europe, the International Energy Agency (IEA) said on Tuesday. Opec's output in July was about 1m b/d higher than in April and significantly higher than the 31.1m b/d in the same month of last year. The IEA cut its global oil demand growth to 790,000 barrels a day, down from July's estimate of 890,000 b/d. Some of the demand in rich countries will be lost for ever, it noted, saying: "Even if retail prices ease, it seems unlikely that motorists who have purchased smaller cars will revert to gas-guzzling vehicles."
Daily Times:
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Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (GKSR), target $42.
- Rated (PHM) Buy, target $16.
- Rated (TOL) Buy, target $27.
Bank of
- Rated (COV) Buy, target $59.
- Rated (BEAT) Buy, target $43.
- Rated (ABMD) Buy, target $30.
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Economic Releases
8:30 am EST
- The Import Price Index for July is estimated to rise 1.0% versus a 2.6% increase in June.
- Advance Retail Sales for July are estimated to fall .1% versus a .1% increase in June.
- Retail Sales Less Autos for July are estimated to rise .5% versus a .8% increase in June.
10:00 am EST
- Business Inventories for June are estimated to rise .5% versus a .3% gain in May.
Other Potential Market Movers
- The weekly MBA mortgage applications report, EnerCom Oil & Gas Conference, Jeffries Industrials Summit, CSFB Electrical Equipment/Machinery Conference, JPMorgan Auto Conference and the CanaccordAdamas Growth Conference could also impact trading today.
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