Markets Flat, Closing News 8/17/11

Markets were mixed today, ending the day relatively flat, in stark contrast to the trading that we have seen over the last two weeks.  The Dow closed 4 points higher today on a day where the Dow started triple digits higher, but enthusiasm faded as the day wore on, and good earnings from retailers offset a lackluster report from Dell.


Producer prices were pushed to 0.2%, just above the 0.1% expected, and 7.2% over the July 2010 reading.  The core reading (ex-food and energy) doubled the consensus forecast, coming in at 0.4%, the largest increase since January.   The core reading was pushed higher by tobacco and light motor trucks, which accounted for over a quarter of the overall increase.


The White House has confirmed that President Obama will unveil a plan to cut the deficit, increase hiring and spur the economy in a speech that will take place after Labor Day. 


The tech sector weighed on markets today after Dell reported earnings after the close yesterday which were in-line with expectations, but revised their FY outlook lower. Hewlett Packard, who cut their full year outlook in their second quarter results, is anticipated to release their earnings tomorrow. 


The Swiss government proposed a 2 billion Swiss Franc plan to weaken the Franc that involves expanding banks sight deposits and continue to buy Swiss National Bank bills.  The government also said it will support measures taken by the SNB to slow the recent run-up in the Franc.


The NCAA is looking into possible improper benefits given to athletes at the University of Miami from 2002-2010 that range from nightclub outings, use of a yacht, cars as well as other gifts.  The revelation comes after a string of investigations at USC, Ohio State, and the University of North Carolina that have some people calling for reform for the NCAA rules.


Market Indices/Statistics:



  • Dow closed up 4.28 pts/+0.04% to 11,410.21

  • S&P closed up 1.12  pts/+0.09% to 1,193.88

  • Nasdaq closed down 11.97 pts/-0.47% to 2,511.48

  • 17 of the 30 Dow stocks closed higher / 12 closed lower/ AA was flat

  • 6 of the 10 S&P 500 sectors closed higher

  • Telecommunications Services was best performing sector (up 1.49%)

  • Information Technology was the worst performing sector (down 0.96%)

  • The VIX was down 1.37 points to 31.50

  • Oil is up $0.80 to $87.65

  • Nat Gas is down $0.0001 to $4.089

  • Gold is up $8.60 to $1,789.29

  • Euro vs. Dollar up $0.0037 to $1.4439

  • Dollar vs. Yen down $0.30 to $76.48

Companies in the News:


Shares of Aecom Technology Corp. traded higher (+3.12% to $20.13) today after announcing a $200 million share repurchase program after the closing bell yesterday.  Shares were also pushed higher by the announcement that a joint venture between Aecom and TEC Inc. received a $50 million contract from the U.S. Naval Facilities Engineering Command.


Ameriprise Financial announced this morning that it reached an agreement to sell Securities America to Ladenburg Thalman Financial Services in a deal for $150 million in cash.  Ameriprise shares fell 2.35% to $44.06, while Ladenburg gained 3.31%, closing at $1.25, on the news.


Shares of Lorillard Inc. traded higher today (+3.06% to $108.38) after filing suit against the FDA, alleging that the new cigarette warnings infringe on first amendment rights.  Reynolds American (+1.06% to $35.35) and Vector Group (+2.84% to $18.80) are also involved in the suit and traded higher today.


Eastman Kodak shares shot higher today (+25.70% to $2.69) after a Bloomberg report surfaced that Kodak’s patents could be worth up to five-times more than the business itself.  The digital-imaging patents owned by Kodak could be worth up to up to $3 billion if put up for sale.


Earnings:


Target Corp. traded higher (+2.39% to $50.55) after reporting Q2 earnings before the opening bell this morning.  Target reported Q2 earnings per share of $1.03 vs. analysts’ consensus of $0.97 per share.  Target also announced FY guidance that beat expectation, guiding $4.15-4.30, ahead of forecasts of $4.12 per share.


Deere & Co. traded lower (-1.20% to $74.26) despite reporting Q3 earnings per share of $1.69 on $8.37 billion in revenue, beating consensus of $1.67 per share on $7.5 billion revenue.  Shares were under pressure because higher raw material costs hurt margins, and Deere lowered its outlook for profits in Brazil.


Shares of Abercrombie & Fitch Co. slid today (-8.66% to $64.87) after reporting Q2 earnings before the bell.  ANF reported Q2 earnings per share of $0.35 on $916 million vs. analysts’ expectations of $0.30 per share on $917 million revenue.  Like Deere, shares were under pressure because of shrinking margins, and on the conference call, the CFO said there is less visibility than in Q1 and the increasing probability of a double-dip recession could weigh on consumers.


Coming Thursday:


Economic Reports: Initial Jobless Claims (expected to be +10k), CPI (expected to be +0.1%), and Core CPI (expected to be +0.2%) at 8:30 am and Existing Home Sales (expected to be 490k), and Leading Indicators (expected to be +0.2%) at 10:00 am; Earnings from Aeropostale, Foot Locker, GameStop, The Gap, JM Smucker and HPQ