Tuesday, October 26, 2010

Today's Headlines

  • Hedge Funds Buying Bearish Options is Bullish Signal: Technical Analysis. Hedge funds are buying bearish options on exchange-traded funds to protect their positions, a signal that stocks may rally, said Todd Salamone at Schaeffer’s Investment Research. Since mid-September, the ratio of bought-to-open puts versus bought-to-open calls has been increasing on major ETFs, such as the SPDR S&P 500 ETF Trust, the PowerShares QQQ and the iShares Russell 2000 Index Fund, Salamone said.
  • Transport Companies May Reach Level Bullish for Stocks: Technical Analysis. Transportation companies are close to a level that may help drive more gains for U.S. stocks, said Christopher Verrone, at Strategas Research Partners. “Those are economically sensitive groups leading the push in the markets,” Verrone, lead technical analyst at Strategas, said in a telephone interview from New York. “It’s a pretty constructive backdrop. With the transports leading the push higher, the market’s advance may have the potential to extend into the first quarter.”
  • PayPal Taps Developers to Spread Its Software, Vying With Visa(V). PayPal Inc., the online-payments processor owned by EBay Inc.(EBAY), plans to introduce a mobile version of its checkout software today as it tries to capitalize on surging smartphone use. The company, holding a conference in San Francisco to promote its service to mobile-phone and Web developers, also said it will introduce a cheaper way for businesses to handle transactions of less than $12, such as a 99-cent digital song or a single newspaper article. As more commerce moves to phones and social networks, PayPal is racing against Visa Inc. and MasterCard Inc. to earn the loyalty of programmers.
  • Race to Replace China in Rare Earth Supplies May Take Decade, Germany Says. China’s decision to curb exports of rare earths is set to spark a global race for alternative sources that may still take a decade to secure sufficient supplies, the head of the German commodities agency said.
  • Ford(F) Posts $1.69 Billion Third-Quarter Profit on Gains in U.S. Ford Motor Co., the world’s most profitable automaker, reported record third-quarter net income of $1.69 billion and said it is paying down debt faster than planned as new models boost its U.S. market share.
  • Citigroup(C) Cuts Euro View Against Dollar, Pound, Franc. Citigroup Inc. technical analysts scrapped recommendations to bet the euro will appreciate against the Swiss franc, British pound and U.S. dollar, citing “price action in the past 48 hours.” The euro’s drop against the pound and franc and its failure to close near the intraday high versus the dollar yesterday shows Europe’s single currency lost momentum, Tom Fitzpatrick, chief technical strategist in New York, said in a telephone interview after publishing a research note.
  • Schools May Lose Funding for Ignoring Bullying of Gay Students, U.S. Says. Schools that fail to address the bullying of gay students may lose U.S. funds for not enforcing gender-discrimination laws, the federal Department of Education said.
  • IBM(IBM) Board Approves $10 Billion for Stock Repurchases. International Business Machines Corp., the world’s biggest computer-services provider, added $10 billion to its stock-buyback plan to return cash to investors and help increase its per-share earnings. The move brings the amount authorized for repurchases by the board to $12.3 billion, Armonk, New York-based IBM said in a statement today. In April, it authorized $8 billion in buybacks.
  • Coach's(COH) Profit Increases 34%, Beating Analysts' Estimates. Coach Inc., the largest U.S. maker of luxury leather handbags, reported a 34 percent increase in first-quarter profit after luring more shoppers to its stores. The stock climbed the most in more than a year. Net income rose to $188.9 million, or 63 cents a share, the New York-based company said today. That compared with the 55- cent average of estimates compiled by Bloomberg. Sales gained 20 percent to $911.7 million, also topping projections. Chief Executive Officer Lew Frankfort cited "resiliency" in handbags and accessories in North America for the gains. Some U.S. consumers are spending more on discretionary goods such as Coach’s Poppy bags, which typically sell for $200 to $400.

Wall Street Journal:
  • Autotrader.com Buys Kelley Blue Book. Autotrader.com is expected to announce Tuesday the $500 million-plus acquisition of venerable Kelley Blue Book Co., the best-known provider of information about the value of new and used cars.
  • Misleading Claims on 'Green' Labeling. Confused by all the "green" claims of products on store shelves out there? There's good reason to be. According to a study due out Tuesday, more than 95% of consumer products examined committed at least one offense of "greenwashing," a term used to describe unproven environmental claims, according TerraChoice, a North American environmental-marketing company that issued the report.
  • The Best of Times For Stocks May Be Ahead. The midterm election may be setting the stage for a political power struggle in Washington, as Democrats and Republicans jockey for control of Congress, but it’s also stacking the deck for a much-anticipated Wall Street rally.
Business Insider:
Zero Hedge:
  • Is An LBO of Cardinal Health(CAH) Imminent? The below chart which compares CAH CDS and stock, shows that something may be afoot in Cardinal Health, and that someone knows something, but is hiding their knowledge from the stock very well.
New York Times:
  • Treasury Hid AIG Loss, Report Says. The United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the American International Group earlier this month, when it abandoned its usual method for valuing investments, according to a report by the special inspector general for the Troubled Asset Relief Program.
LA Times:
Philadelphia Inquirer:
ABC News:
  • Public Optimism in U.S. System of Government Hits a 36-Year Low. Optimism in the country's system of government has dropped to a new low when measured against polls going back 36 years, and the public's belief that America is the greatest nation on earth, while still high, has fallen significantly from its level a generation ago.
Google Blog:
  • Advertise Your Local Business With Google(GOOG) Boost. Today, we’re announcing the availability of a new online advertising solution to help local businesses connect with potential customers in their area. Boost enables business owners to easily create online search ads from directly within their Google Places account.
  • Dems' 2010 Crisis Has Roots in 2009. The political forces currently aligned against Democrats — apathy in the liberal base, flight among independents and Republican rage — trace back to early 2009, and the White House either miscalculated their risks or intensified them through its actions. That’s the way it appears on the eve of midterm elections that are shaping up as a referendum on President Barack Obama’s first two years, a period notable for its ambitious agenda but also for the administration’s missteps in the face of evidence ranging from eroding public opinion to town hall meetings gone wrong to unfavorable outcomes in three bellwether elections last fall and winter.
Rasmussen Reports:
USA Today:
  • Small Businesses Losing Out to Red Tape. In an economic climate with few jobs and cutbacks on basic city services such as police protection and firefighting, you would think cities and states would be overjoyed when someone was willing to open up a new business, bringing with him jobs, economic vitality and tax revenues. You might think that, but you'd be wrong. Instead, cities and states stifle new small businesses at every turn, burying them in mounds of paperwork; lengthy, expensive and arbitrary permitting processes; pointless educational requirements for occupations; or even just outright bans. Today, the Institute for Justice released a series of studies documenting government-imposed barriers to entrepreneurship in eight cities. In every city studied, overwhelming regulations destroyed or crippled would-be businesses at a time when they are most needed.
  • China Minister Says Dollar Printing "Out of Control". Dollar issuance by the United States is "out of control", leading to an inflation assault on China, the Chinese commerce minister said in comments reported on Tuesday. Chen Deming, speaking at a trade fair in southern China, said that exporters had done a good job of preparing themselves for exchange rate changes as well as rising labour costs, but were suddenly confronted with new challenges. "Because the United States' issuance of dollars is out of control and international commodity prices are continuing to rise, China is being attacked by imported inflation. The uncertainties of this are causing firms big problems," Chen was quoted as saying by the official Xinhua news agency.
  • Compellent(CML) Mull Options, Including Sale-Sources.
  • II-VI(IIVI) Beats Estimates, Sees Q2 Above Street View. II-VI Inc posted higher-than-expected quarterly results, helped by a rise in sales of its infrared and near-infrared optical products, and forecast second-quarter results above analyst estimates on increased orders, sending its shares up to their highest in two years.
  • Greece Reignites Europe Debt Woes. Europe's debt woes have returned to the fore after Greek premier George Papandreou threw open the door to fresh elections and vowed to liberate the nation from "slavery and surveillance".
The Globe and Mail:
Les Echos:
  • The euro area is suffering from a weak dollar and from the lack of a freely floating Chinese currency, French finance minister Christine Lagarde said. Priorities for the next meeting of G20 finance ministers in France in February will include financial regulation and the reform of commodity markets and related derivatives, Lagarde said.
Diario Economico:
  • International Energy Agency Executive Director Nobuo Tanaka said countries that are part of the OECD now have historically high levels of oil stocks and that scenario should continue in 2011.
  • Fitch Ratings analyst Douglas Renwick said there is a "strong risk" that the Portuguese economy enters a recession in 2011.
China Daily:
  • Apple's(AAPL) iPhone 4 Still in High Demand in China. It has been a month since US-based Apple Company launched its iPhone 4 series in the Chinese mainland market, yet demand shows no sign of abating. The smart phone's popularity has even given rise to scalpers (grey marketers) looking to make a quick profit. The scalpers lurk outside stores ready to pounce on anyone who walks out without Apple merchandise. One scalper offered the 16-gigabyte version of the device for 5,400 yuan ($795) -- a 10-percent mark-up over the official retail price of 4,999 yuan.
  • Hard Drive Shortage May Persist Through 1Q11. As notebook brand vendors are starting to prepare their shipments for the end-of-year holidays, hard drive makers, which had conservative production plans for the fourth quarter due to a weaker-than-expected third-quarter performance, have recently started seeing short supply of hard drives and the problem is likely to persist through the first quarter of 2011, according to sources from hard drive makers.

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