2011 November

Top Gainers In Early Trading for 11/28: CMC, SMBL, GNW, ING, BAC, NOK

The stock market continues to rally today on better than expected Black Friday numbers and hopes of a solution in Europe. The major indexes are all up well over 2% and the Nasdaq and S&P are up over 3%. The Dow is up 315 points, the Nasdaq is up 85 points and the S&P is up 36 points. Stocks posting decent gains in early trading include Commercial Metals company (NYSE:CMC), Smart Balance, Inc. (NASDAQ:SMBL), Genworth Financial Inc. (NYSE:GNW), ING Group (NYSE:ING), Bank of America Corp. (NYSE:BAC) and Nokia Corporation (NYSE:NOK)

Commercial Metals Company (NYSE:CMC) is up 23.14% in early trading at $14.10. CMC is moving today after Carl Icahn offered the buy the company for $1.73 billion that would combine Commercial Metals with Ichan’s PSC Metals Inc. The $1.73 billion price translates to $15 a share and is a premium of 31% of CMC’s close on Friday. CMC has traded 5 million shares so far today, nearly 5 times its daily average volume. The company has a current market cap of 1.62 billion.

Smart Balance, Inc. (NASDAQ:SMBL) is up 14.55% at $5.51 in early trading today. SMBL has traded 308 thousand shares so far today and trades 456 thousand shares a day on average. SMBL had been trading between $4.80 and $5 before jumping over $5 today as it follows the overall market rally. The company has a current market cap of 325 million.

Genworth Financial, Inc. (NYSE:GNW) is up 12.8% at $6.08 in early trading. GNW has traded 4.2 million shares so far today and trades 11.47 million shares on average. Last week, GNW dipped more than $0.50 a share and closed at $5.39 on Friday. GNW jumped today after Citigroup upgraded the insurer for the second time this month. The company has a current market cap of 3.03 billion.

ING Group (NYSE:ING) is up 11.34% at $6.97 in early trading today. ING has traded 1.4 million shares so far today and trades 5.9 million shares on average daily. ING has made back all the ground it lost last week when the stock as well as the general market had a steep sell off. The company has a current market cap of 26.49 billion.

Bank of America Corp. (NYSE:BAC) is up 4.35% in early trading at $5.40. BAC has traded 75.9 million shares so far today and trades 270 million shares a day on average. BAC is following the market rally up today as investors hope for a European solution to their debt crisis soon. The company has a current market cap of 54.84 billion.

Nokia Corporation (NYSE:NOK) is up 6.81% today at $5.65. NOK has traded 12.6 million shares so far today and trades on average 28.4 million shares a day. NOK gaped up this morning at $5.69 and since then has sold off slightly. The company has a current market cap of 20.96 billion.

New Home Sales Rise 1.3%, Home Prices Down

The Commerce Department announced Monday that sales edged up 1.3% to a seasonally adjusted 307,000 unit annual rate, which was the fastest pace in five months, still below analysts’ expectations. The supply of new homes in the market would last 6.3 months at the current pace of sales. The median sales price of new houses sold in October 2011 was $212,300; the average sales price was $242,300. The seasonally adjusted estimate of new houses for sale at the end of October was $162,000.

The report suggests housing continues to drag on the U.S. economy and is a long way from recovering.

While new homes sales represent a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders. Many Americans believe it is just too risky to buy a home right now so soon after the housing bubble burst from four years ago.

While home prices have fallen, unemployment at over 9% has taken its toll on consumers. Many consumers who wish to buy a home simply cannot due to higher down payments and loan qualifications they cannot meet.

Mortgage rates continue to hover at historic lows. Refinancing has been a boon for mortgage companies, but that does nothing to address the glut of houses for sale on the market. Also, with the number of foreclosures and short sales on the market, consumers are more apt to purchase one of those vice a new home.

Sales of previously owned homes rose slightly last month to a seasonally adjusted annual rate of 4.97 million units, the National Association of Realtors said last week. That’s below the 6 million that economists say is consistent with sales in a healthy market and barely ahead of last year’s totals, which were the fewest since 1997.

New Home sales data for November 2011 will be released on Friday December 23, 1011 at 10:00 am ET.

Google (GOOG) Share Climb In Premarket, Amazon (AMZN) Reports Brisk KIndle Sales

Google Inc. (NASDAQ:GOOG) is seeing quite a boost in the premarket trading Monday after a Citi Investment Research analyst upgraded the online search leader, citing a recent stock price drop and consistent revenue growth.

The analyst, Mark S. Mahaney, upgraded Google to “Buy” from “Neutral.” He’d downgraded the stock in mid-April, but Google’s stock price has declined since then while its revenue has grown 28 percent, not counting acquisitions.

The company, he added, has also started to show signs that its profit margin is stabilizing, and its stock price value “has become more attractive as estimates have increased while its share price hasn’t. This “is essentially the dip we have been looking for,” Mahaney said.

Google’s shares climbed $15.08, or 2.7% to $578.08 in premarket trading on Monday. The stock closed at $563 on Friday, down nearly 4 percent since the beginning of April.

Amazon.com Inc. (NASDAQ:AMZN), the Seattle online retailer, reported on Monday that Black Friday sales of its Kindle electronic-book reader quadrupled from a year earlier. Amazon.com markets four versions of the Kindle, at $79, $99, $149 and $199.

“This was a great Black Friday for Target and for Kindle Fire, which was the bestselling tablet in our stores on Black Friday,” said Nik Nayar, vice president merchandising, Target. “We’re excited so many guests chose Target as their destination for the new family of Kindle devices and we’re sure Kindle Fire will continue to be at the top of wish lists this holiday season.”“Even before the busy holiday shopping weekend, we’d already sold millions of the new Kindle family and Kindle Fire was the bestselling product across all of Amazon.com. Black Friday was the best ever for the Kindle family – customers purchased 4X as many Kindle devices as they did last Black Friday – and last year was a great year,” said Dave Limp, Vice President, Amazon Kindle. “In addition, we’re seeing a lot of customers buying multiple Kindles – one for themselves and others as gifts – we expect this trend to continue on Cyber Monday and through the holiday shopping season.”

Shares of Amazon (AMZN) were trading at 189.99, up 7.59 or 4.16% in the premarket.

Germany Continues To Deny Reports of ‘Elite Bonds’

Today, Germany continued to deny reports of a plan to float bonds together with other AAA rated euro countries and use the proceeds to provide assistance to struggling euro members like Italy and Spain.

The IMF also denied reports it was planning a 600 billion euro bailout for Italy. Moody’s, the credit rating agency, warned the credit worthiness of all eurozone governments are threatened by the “rapid escalation” of Europe’s financial crisis. Even AAA rated countries are not safe from ratings downgrades anymore.

The markets continue to rally however despite the denials. The global market is being propped up today by good news from holiday sales in the U.S. Now investors are hoping since the crisis in Europe is becoming so bad, this will force European leaders to act.

Many believe the best way to fix the crisis is with eurobonds, but Germany has continued to strongly refuse this because it would expose their tax payers to the bad debt from the weaker countries. Germany already funds most of the bailouts as it is anyways.

Economists think that the idea of ‘elite bonds’ may help ease some of Germany’s concerns, but the German Finance Minister denied reports that they will go along with this.

Moody’s added on Monday the euro zone “is approaching a junction, leading either to closer integration or greater fragmentation.” Last week they cut Hungary’s rating to junk status and said more countries could receive downgrades if the debt crisis continues.

Morgan Stanley (MS) Cuts Global Growth Forecast

Morgan Stanley (NYSE:MS) has a bearish view on the Global economic outlook for 2012. “Our economics team in Europe now expects a recession in Europe while the U.S. economy is expected to continue growing below its trend,” said Morgan Stanley. Morgan also cut its 2012 growth estimate for Asia to 6.9% from 7.3%.

“Since we downgraded our regional growth outlook in August 2011, we have been constantly worried about the increasing downside risks to growth. In addition to further evidence of weakening domestic demand, the external environment in Europe has made us more concerned about the region’s growth outlook,” economists at Morgan Stanley said in a research note on Monday.

Most analysts agree it looks as though Europe will fall into a full-blown recession. “The European economy is already essentially in recession, I think the UK is following close behind,” Russell Jones, Global Head of Fixed Income Strategy at Westpac Institutional Bank told CNBC on Monday. According to Jones, he believes the hopeful data on the U.S. economy while good, will most likely not last. “It is quite possible, we could be back in an environment that looks awfully redolent of 2008, quite soon, and that’s very troubling,” he added.

The Economic Outlook just released by the Organization for Economic Co-operation and Development paints pretty much the same picture except that group forecasts the U.S. economy will continue a slow pace of growth while the rest of the world’s major economies will see a slowdown.

Emerging-markets stocks may rise 39% by the end of next year, spurred by a “soft landing” for China’s economy, earnings growth and cheap valuations, according to Morgan Stanley.

The MSCI Emerging Markets Index may jump to 1,355 by the end of 2012, from the 900-1,000 range it has been hovering at this month, said Jonathan Garner, Morgan Stanley’s chief emerging-markets and Asia strategist. The U.S. brokerage firm has joined UBS AG in favoring Chinese stocks for next year, bolstered by confidence that the government will loosen monetary policies to support Asia’s biggest economy. Morgan Stanley favors China and its consumer companies most among the Asian emerging markets.

Oil Closes In On $100 as Global Markets Rally

Oil is closing in on $100 this morning following a global market rally that according to U.S. stock futures will continue for the U.S. markets. This rally comes after a better than expected start to the U.S. holiday season and hopes that European leaders can solve the sovereign debt crisis in Europe.

Benchmark crude for delivery in January is up $2.63 at $99.4 this morning. In London, Brent crude saw a rise of $2.14 at $107.99.

Oil is jumping today along with the overall market following news that a record 226 million shoopers visited stores and websites during the Thanksgiving holiday weekend. This was a 14 million increase from last year according to early estimates.

In Europe, there are reports of France and Germany bypassing European redtape to get nations using the euro to adhere to stricter rules for budget discipline. This helped boost confidence in investors who had none when it came to Europe.

Oil was over $100 at one point last week, but fell quickly as the continuing crisis in Europe undermines the entire global economy.

OECD: Euro Zone in Recession, U.S. Could Follow

The Euro Zone is already in a mild recession and the U.S. could follow suit according the OECD who sharply cut forecasts on Monday. The threat of an even more severe downturn will continue if Europe can not get their debt under control and if U.S politicians fail to come up with a spending-reduction plan they all agree on.

The ECB is the only institution left that can hold the euro zone together if European leaders fail to take more decisive action in resolving their issue. The OECD believes in the U.S. however, the Federal Reserve has little else it can do. The slow down in Europe affects the entire global economy including big emerging economies such as China. The OECD cut its twice a year Economic Outlook to 3.4% in 2012, down from 3.8% this year.

The OECD added that Europe is has entered a recession and has seen growth this year of only 0.2%, well short of what it fore-casted in May of 2%.

The euro zone recovery continues to look in doubt following Germany’s difficulties with their bond auctions last week. “What we see now is contagion rising and hitting probably Germany as well,” OECD chief economist Pier Carlo Padoan told Reuters in an interview. “So the first thing, the absolute priority, is to stop that and in the immediate the only actor that can do that is the ECB,” he added.

The main answer to this crisis seems to be the ECB committing to creating a cap on government bond yields.

In the U.S., the Federal Reserve can’t do much in the event of a major economic downturn. It’s already boosted liquidity in the financial system. Padoan said the failure of Congress to pass a deficit reduction plan could cause the U.S. to fall into another recession. “The resulting fiscal tightening, which would come automatically, would in our view likely generate a recession in the United States,” Padoan said.

If a plan is passed, the U.S. economy will grow 1.7% in 2011 and 2% in 2012.

Retailers Hit Record: Winners Are BBY, M, WMT, AMZN TGT, AAPL

U.S. retailers rang up a record $52.4 billion in sales over the Thanksgiving weekend, a 16.4% increase from a year ago, as early hours and bargain hunting brought out more shoppers, an industry trade group said on Sunday.

A record 226 million shoppers visited stores or online shopping sites from Thursday through Sunday, up from 212 million last year, according to a survey from retail industry trade group the National Retail Federation. The survey was conducted by online research firm BIGresearch. The sheer number of shoppers and the amount of spending surprised analysts who had expected sales to be cautious because of the 9% unemployment rate in the United States coupled with high costs for gasoline and concerns about fiscal uncertainty in Europe.

Analysts are now watching to gauge if the rest of the holiday shopping season can deliver. The National Retail Federation forecast a 2.8% increase in sales for the November to December holiday season, down from the 5.2% increase in the same period last year.

Strong starter’s to the holiday shopping season include Best Buy (NYSE:BBY), Macy’s (NYSE:M), Walmart (NYSE:WMT), and Amazon.com (NASDAQ:AMZN).

“Best Buy’s success is partially due to locking in compelling exclusive deals, better than Amazon’s, and having unique in-store-only offers forcing the visit,” Credit Suisse analyst Gary Balter said.

Macy’s and Walmart each saw a huge surge in shoppers with CEO’s of both companies giddy about the holiday season. Both retailers enjoyed online sales as well.

Fifty million Americans visited online retail sites on Black Friday, representing an increase of 35% from a year ago. Online retail sales in the United States on Black Friday jumped 26% this year, comScore data showed. “Amazon.com once again led the pack, with 50% more visitors than any other retailer, while also showing the highest growth rate versus last year,” comScore Chairman Gian Fulgoni said.

Also racking up huge online retail sales were Target (NYSE:TGT) and Apple Inc. (NASDAQ:AAPL).

Approximately 122.9 million Americans plan to shop on Cyber Monday this year, up from the 106.9 million who shopped on Cyber Monday in 2010, NRF Vice President Ellen Davis said on Sunday, citing a survey conducted by BIGresearch.

U.S. Stock Futures Surge As Global Markets Soar. Stocks to Watch: BAC, AAPL, NFLX, ROYL, GE, MMM

U.S. stock futures surged on Monday as news about a strong retail holiday season is coming in and hopes for progress by European leaders in addressing the sovereign debt crisis.

Futures on the Dow Jones Industrial Average rallied 243 points to 11,430. Standard & Poor’s 500 Index futures rose 31.80 points to 1,185.20, while Nasdaq 100 futures gained 51.25 points to 2,198.75.

U.S. retailers saw a huge surge in “Black Friday” sales compared to 2010. Chicago-based ShopperTrak said store sales rose 7% as shoppers spent $11.4 billion, a rise of nearly $1 billion from a year ago. This should give market watchers something to be hopeful about.

European debt issues are being tackled by French and German leaders with the proposal of a agreement that would give stability to the financial markets in the region. Reports from Europe all pointed in a more favorable direction over the weekend. European stocks rose more than 2% on Monday, led by shares of financial institutions helped by renewed hopes about of an easing of the debt crisis.

In the currency markets, the dollar index, which tracks the performance of the greenback against a basket of other major currencies, dropped 0.9% to 78.868. The euro rallied 0.7% to $1.3377.

Gold futures for December delivery rallied nearly $29 to $1,714.50 an ounce in electronic trading. January oil futures rose $3.20 to $99.97 a barrel.

The Dow Jones Industrial Average ended Friday with a loss of 25.77 points at 11,231.78, lost 3.12 points to end at 1,158.67 for a 4.7% weekly decline, while the Nasdaq Composite dropped 18.57 points to 2,441.51 for a 5.1% weekly loss.

Stocks to watch today include Bank of America Corporation (NYSE:BAC), Apple Inc. (NASDAQ:AAPL), Netflix, Inc. (NASDAQ:NFLX), Royale Energy, Inc. (NASDAQ:ROYL), General Electric Company (NYSE:GE) and 3M Company (NYSE:MMM).

Bank of America Corp. (NYSE:BAC) is up 4.55% in pre-market trading at $5.40. BAC has traded 134 thousand shares in pre-market trading and trades 260.58 million shares a day on average. Over the last 5 trading sessions, BAC has fallen more than $0.50. The company has a market cap of 52.40 billion.

Apple Inc. (NASDAQ:AAPL) is up $9.68 at $373.25 in pre-market trading, a gain of 2.66%. AAPL has traded 14 thousand shares in pre-market trading so far and trades on average 17.67 million shares a day. AAPL stock has lost more than $10 a share in the past 5 trading sessions. The company has a current market cap of 337.91 billion.

Netflix, Inc. (NASDAQ:NFLX) is up 4.61% at $66.80 in pre-market trading. NFLX has traded 5 thousand shares so far in early pre-market trading and trades 8.82 million shares a day on average. The past 5 trading sessions has seen NFLX fall by nearly $15. The company has a current market cap of 3.35 billion.

Royale Energy, Inc. (NASDAQ:ROYL) is up 5.60% in pre-market trading at $4.90. ROYL has 1.2 thousand shares in pre-market trading so far and trades 546 thousand shares on average a day. Over the past 5 trading days, ROYL has jumped from $3 to over $4.50. The company has a current market cap of 49.94 million.

General Electric Company (NYSE:GE) is up 3.06% at $15.15 in pre-market trading. GE has traded 31.4 thousand shares in pre-market trading so far and trades on average 60.32 million shares a day. GE has fallen nearly a buck in the last 5 trading sessions. The company has a current market cap of 155.19 billion.

3M Company (NYSE:MMM) is up 2.57% at $76.13 in pre-market trading. MMM has traded 200 shares in early pre-market trading and trades on average 4.75 million shares a day. MMM has fallen about $4 in the past 5 trading sessions. The company has a current market cap of 53.36 billion.

Steve Keen On If We Are Headed To Another Great Depression, “We Are Already In One”

Steve Keen, aka the “Merchant of Gloom” was on BBC’s HardTalk this past week and lived up to his merchant of gloom moniker. When Keen was asked if we are headed to another great depression – he stated, “We are already in one. The same thing applied in the last great depression that people didn’t call it one until after it was over.” So, what’s Keen’s solution for the current global financial crisis, “Write off the debt, bankrupt the banks, nationalize the financial system, and start all over again.”

Now some may wonder why we should even listen to Steve Keen. Well, Steve Keen was one of the few economists who predicted the current global financial crisis.

Other topics in the interview include the Occupy Wall Street protests, debt jubilees, and how the financial sectors is parasitic to capitalism. You can watch the full interview below.

Wall Street Looks To Recoup After European Fears Push Markets Down, Stocks To Watch Include: AAPL, NFLX, IBM, GE, MAT, MMM

Wall Street will be looking at home for some good news this week as the European debt crisis has taken its toll on financial markets worldwide. The Dow Jones Industrial Average has been down for a third week out of four. The Dow joined other benchmarks and entered negative territory for 2011.

The Street has been riding a wave of uncertainty not knowing what European leaders are doing from one moment to the next in trying to stem the contagion from the sovereign debt crisis that threatens the entire European region.

“There is a lack of leadership on that side of the pond that is concerning — we want them to come up with decisions and execute them. It feels like we’re turning what could be a 12-month project into a 32-month project,” Art Hogan, market strategist at Lazard Capital Markets, said of Europe’s ongoing troubles.

After being caught up in the woes of the Europeans and mostly casting aside the better than expected domestic data over the past few weeks, analysts are hopeful market watchers will focus back on the United States.

This week on the home-front is jobs data week. ADP will report employment figures on Wednesday as well as the Labor Department’s unemployment figures on Thursday. Then, Friday will see a release for nonfarm payroll reports. Hopefully the trend of jobless claims below 400,000 will continue and get some notice from Wall Street.

The holiday shopping season is in full swing with retailers reporting brisk sales on Black Friday and throughout the weekend. Cyber Monday will get kicked off at midnight as online retailers hope to cash in with success. The Reuters-University of Michigan consumer sentiment index released earlier this month inched higher, showing consumers feel a little better now than a month ago.

The Institute for Supply Management’s November factory activity due out Thursday with an expected rise in demand. Economists are predicting an increase to 52.0 from 50.8 last month. Factory activity is a direct indicator of demand. Weak consumer demand for U.S. goods has crippled the economic recovery for months.

Stocks to watch at the start of the week include, Apple Inc. (NASDAQ:AAPL), Netflix, Inc. (NASDAQ:NFLX), International Business Machines Corp. (NYSE:IBM), General Electric Company (NYSE:GE), Mattel, Inc. (NASDAQ:MAT) and 3M Company (NYSE:MMM)

Apple Inc. (NASDAQ:AAPL) fell 0.93% on Friday and closed at $363.57. AAPL traded 9.10 million shares on the shortened trading day and trades 17.67 million shares on average. AAPL shares fell more than $10 during the week after closing last Friday at $375. The company has a current market cap of 337.91 billion.

Netflix, Inc. (NASDAQ:NFLX) closed Friday at $63.86, a loss of 6.8%. NFLX traded 5.43 million shares on Friday and trades 8.82 million shares on average daily. NFLX shares continue to fall as they lost more nearly $15 over the past week. The company has a current market cap of 3.35 billion.

International Business Machines Corp. (NYSE:IBM) finished Friday down 0.5% at $177.06. IBM traded 2.23 million shares on Friday and trades 5.55 million shares on average. Shares of IBM were down more than $8 during Thanksgiving week. The company has a current market cap of 208.69 billion.

General Electric Company (NYSE:GE) closed Friday down 0.20% at $14.70. GE traded 23.16 million shares on the shortened day Friday and trades on average 60.32 million shares daily. GE lost about $1 per share during the whole week. The company has a current market cap of 155.19 billion.

Mattel, Inc. (NASDAQ:MAT) closed Friday up 0.51% at $27.55. MAT traded 1.24 million shares on Friday and trades 3.34 million shares on average. MAT stock finished the week slightly in the red after seesawing during the middle of the week. The company has a current market cap of 9.33 billion.

3M Company (NYSE:MMM) rose 0.78% on Friday at $76.13. MMM traded 2.09 million shares and trades 4.75 million shares a day on average. MMM followed the overall market last week and lost more than $4 per share for the week. The company has a current market cap of 53.36 billion.

Germany And France Plan New Stability Pact

Germany and France are poised to announce a new crisis plan that the two countries, along with other euro countries, would back with hopes of encouraging the European Central Bank to intervene more forcefully in the debt crisis, and to calm nervous financial markets. German Chancellor Angela Merkel and French President Nicolas Sarkozy could announce the plan in the coming week.

The plan is possibly similar to the Schengen Agreement which applies to EU countries that choose to take part and enables their citizens to enjoy uninhibited cross border travel. Among the countries in the Stability Pact, there would be a treaty spelling out strict deficit rules and control rights for national budgets. Because it would take too long to change existing European treaties, the new Stability Pact could be agreed upon and implemented at the start of 2012.

The Stability Pact calls on the European Central Bank to become more of a crisis fighter in the euro zone. Although the European Central Bank is independent. It is widely believed if Europe’s leaders can agree on something, then the ECB will be more likely to jump in and help.

The ECB, which cannot directly finance governments, has been buying Italian and Spanish bonds on the open market since August to try to keep down borrowing costs for the euro zone’s third and fourth largest economies. Yields on Italian and Spanish debt have climbed in recent weeks, despite the ECB intervention and the appointment of a new technocrat government in Rome and the election of the conservative Popular Party in Madrid.

The European Commission, the EU executive arm, proposed on Wednesday to grant itself intrusive powers of approval of euro zone budgets before they are submitted to national parliaments. If approved, it would effectively mean ceding some national sovereignty over budgets. Germany is pushing to change the European Union treaty so that a country could be sued for breach of EU budget rules in the European Court of Justice. Germany opposes the joint issuance idea saying spendthrift economies would piggyback on its low borrowing costs leaving Germans with no gain for being fiscally responsible, while the spenders would receive no pain for their carelessness.

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