Jobless Claims fell more than expected, down 30,000 to 339,000, but one large State did not file. Import Prices rose 1.1% in September. Trade Deficit widened to $44.22B in August versus $42.47 Billion in July. The Dow Jones Industrial Average opened higher trading up to 13,428.49 then dipped into the red with an afternoon low at 13,334.01 staying above its 50-day simple moving average at 13,310.83. The NASDAQ opened higher trading up to 3078.08 then dipped into the red with a day’s low at 3047.14 staying below its 50-day simple moving average at 3087.69.
In Asia, the Nikkei 225 closed at 8,547 – down 0.58%. The Hang Seng closed at 20,999 – up 0.38%. European exchanges ended higher on Thursday. The FTSE 100 ended the day at 5,830 – up 0.92%. The DAX ended the day at 7,282 – up 1.06%. The CAC 40 ended the day at 3,414 – up 1.42%. The yield on the 10-Year US Treasury rose from 1.668% to 1.731% then consolidated versus the 50-day and 200-day simple moving averages at 1.690% and 1.808%.
Comex gold rebounded from $1760.2 the Troy ounce to $1776.6 well below the 2012 high at $1798.1 on Friday, October 5. Nymex crude oil rebounded from $91.09 per barrel to $92.94 staying below its 50-day and 200-day simple moving averages at $93.85 and $95.97. The euro versus the dollar rebounded from 1.2829 to 1.2951 staying above its 200-day simple moving average at 1.2821.
The oil industry has filed a lawsuit to overturn an SEC rule forcing companies to disclose payments to foreign governments, arguing the information hurts their competitiveness. BP (BP) and the Justice Department are close to a deal to resolve the company’s civil and criminal liabilities arising from 2010’s Deepwater Horizon spill. However, the sides are still about $6B apart on a final figure. Exxon Mobil (XOM) [Buy] and Chevron (CVX) [Hold] are resumed at Dahlman Rose. Big Movers – GMX Resources (GMXR) is down about 21%. Alpha Natural Resources (ANR) is up about 13.5%. Arch Coal (ARI) is up about 12.5%. James River Coal (JRCC) is up about 11%. Dow components – Chevron (CVX) is up about 0.7%. Exxon Mobil (XOM) is up about 0.3%. Energy Select Sector SPDR (XLE) was trading at $73.13 at 3:30 PM on Thursday, up 0.98% on the day – up 5.79% year-to-date.
Big Mover – Stillwater Mining (SWC) is down about 10.5%. Dow Components – Alcoa (AA) is up about 0.9%. DuPont (DD) is down about 0.5%. The Materials Select Sector SPDR (XLB) was trading at $36.59 at 3:30 PM on Thursday, up 0.58% on the day – up 9.22% year-to-date.
Alaska Air (ALK) is ordering 50 Boeing (BA) 737 jets, with the airline set to announce the deal today. There’s no word on price, but the deal is likely to be worth billions of dollars. American Airlines parent company AMR (AAMRQ) has asked a bankruptcy court in a court filing for permission to borrow up to $1.5B in order to refinance current debt. BAE Systems (BAESY) is boosted to Neutral from Underperform by BNP Paribas. European Aeronautic Defence & Space Co. (EADSY) is lifted to Buy from Hold at Deutsche Bank. FedEx (FDX) is boosted to Buy from Hold this morning at Standpoint Research. Caterpillar (CAT) is cut to Sector Perform from Outperform at RBC Capital. Siemens (SI) is cut to Hold from Buy at Deutsche Bank. Big Mover – Oshkosh (OSK) is up about 11.5%. Dow components – Boeing Co (BA) is up about 0.7%. Caterpillar (CAT) is down about 0.6%. General Electric (GE) is up about 0.4%. 3M Company (MMM) is down about 0.5%. United Technologies (UTX) is up about 0.3%.
The Industrial Select Sector SPDR (XLI) was trading at $36.51 at 3:30 PM on Thursday, up 0.58% on the day – up 8.18% year-to-date.
McGraw-Hill’s (MHP) education unit is expected to draw final bids later this month from P-E firms Bain Capital and Apollo Global (APO), as well as rival college textbook publisher Cengage Learning, in a deal that could fetch $3B. General Motors (GM) plans to introduce 13 new models for its Chevrolet brand in 2013, including refreshed versions of the Silverado pickup, Tahoe SUV, and Spark electric vehicle. Eastman Kodak (EKDKQ) has reached a deal to resolve the bankrupt company’s retiree health care and survivor benefits liabilities, which surpass $1.2B and cost Kodak $10M a month. Kodak will provide the retirees committee with a $7.5M cash payment, a $635M unsecured claim, and a $15M administrative claim to make payments to the former employees. Winnebago Industries (WGO) beat estimates by 7 cents with revenue in-line with estimates. Emmis Communications (EMMS) missed estimates by 3 cents on revenue of $55M. Ruby Tuesday (RT) missed estimates by a penny with revenue in-line with estimates. VOXX International (VOXX) missed estimates by 3 cents and revenue by $13M. Life Time Fitness (LTM) is launched at Outperform at Wedbush. Marriott International (MAR) gets moved to Neutral from Buy at Goldman Sachs. Dow Components – Disney (DIS) is down about 1.5%. Home Depot (HD) is down about 0.8%. McDonalds (MCD) is up about 0.3%. The Consumer Discretionary Select Sector SPDR (XLY) was trading at $46.38 at 3:30 PM on Thursday, down 0.19% on the day – up 18.86% year-to-date.
Brown-Forman (BFB) is assigned a Neutral at SunTrust. Rite Aid (RAD) is begun with a Buy at BTIG. Dow components – Coca Cola (KO) is up about 0.2%. Procter & Gamble (PG) is up about 0.2%. Wal-Mart (WMT) is down about 0.2%. The Consumer Staples Select Sector SPDR (XLP) was trading at $35.92 at 3:30 PM on Thursday, up 0.06% on the day – up 10.56% year-to-date.
St. Jude Medical (STJ) only sent a warning to doctors in December 2010 about insulation problems with the wires used with its Riata defibrillators, at least five years after the company first encountered the flaws and two years after an internal audit had specifically identified the issue. Genomic Health (GHDX) is picked up with a Neutral rating at Goldman Sachs. Celgene (CELG) is now Neutral from Overweight at Piper Jaffray. Fresenius Medical (FMS) is now Neutral from Overweight at HSBC Securities. Qiagen (QGEN) is cut to Underweight from Neutral at HSBC Securities. Dow Components – Johnson & Johnson (JNJ) is down about 0.5%. Merck (MRK) is down about 0.5%. Pfizer (PFE) is down about 0.6%. United Health Group (UNH) is up about 1%. The Health Care Select Sector SPDR (XLV) was trading at $40.45 at 3:30 PM on Thursday, up 0.27% on the day – up 16.60% year-to-date.
McGraw-Hill’s (MHP) education unit is expected to draw final bids later this month from P-E firms Bain Capital and Apollo Global (APO), as well as rival college textbook publisher Cengage Learning, in a deal that could fetch $3B. Expect continued substantial headcount reductions at Bank of America (BAC), CEO Brian Moynihan has reiterated to Bloomberg, saying, “It’s really based on demand.” Noting the bank’s flat revenues amidst the flat yield curve and flat economy, he said, “When I talk to our clients…they don’t expect to hire a lot more people.” Mission West Properties (MSW) beat estimates by 7 cents and revenue by $4M. Privatebancorp (PVTB) beat estimates by 5 cents and revenue by $1M. American Tower (AMT) is a new Neutral at Nomura. First Financial Holdings (FFCH) is assigned a Market Perform at Raymond James. Popular Inc. (BPOP) is an Outperform at RBC Capital. American Campus Communities (ACC) is raised to Buy from Neutral at Janney Capital. Banner Corp. (BANR) is boosted to Outperform from Market Perform at Keefe Bruyette. Big Mover – MF Global (MFGLQ) is up about 64%. Dow Components – American Express (AXP) is up about 0.5%. Bank of America (BAC) is up about 1.2%. JP Morgan Chase (JPM) is up about 0.3%. Travelers (TRV) is down about 0.4%. The Financial Select Sector SPDR (XLF) was trading at $16.045 at 3:30 PM on Thursday, up 0.27% on the day – up 23.42% year-to-date.
PC shipments fell a stunning 8.3% on year in Q3 vs. just -0.1% in Q2, Gartner estimates, as weak back-to-school sales and cautious retailer orders add to the damage wreaked by tablet sales. Gartner also says that Lenovo (LNVGY) has passed H-P (HPQ) to become the world’s top PC OEM. DragonWave (DRWI) beat estimates by 26 cents and revenue by $3.2M. DragonWave expects FQ3 revenue of $43M-$50M (in-line with a $48.7M consensus). Richardson Electronics (RELL) missed estimates by 6 cents and revenue by $6M. Sycamore Networks (SCMR) beat estimates by 10 cents and revenue by $4M. Heartland Payment Systems (HPY) is hoisted to Outperform from Market Perform at Raymond James. Check Point Software (CHKP) is now Hold from Buy at Needham. Texas Instruments (TXN) is cut to Neutral from Outperform at Credit Suisse. Big Movers – Dragonwave (DRWI) is up about 15%. KIT Digital (KITD) is down about 12.5%. Dow Components – Cisco Systems (CSCO) is down about 0.5%. Hewlett-Packard (HPQ) is up about 0.9%. IBM (IBM) is up about 0.1%. Intel Corp (INTC) is down about 0.4%. Microsoft (MSFT) is down about 0.3%. The Technology Select Sector SPDR (XLK) was trading at $30.06 at 3:30 PM on Thursday, unchanged on the day – up 18.11% year-to-date.
Sprint (S) soared 23% premarket following a report that Japan’s Softbank is mulling taking more than a two-thirds stake in the company for about $13B. Big Movers – Clearwire (CLWR) is up about 52%. Sprint Nextel (S) is up about 13%. TerreStar (TSTRQ) is down about 38%. Dow Components – AT&T (T) is down about 1.7%. Verizon (VZ) is down about 1.1%. The NASDAQ Telecommunications Index (IXTC) was trading at $194.05 at 3:30 PM on Thursday, up 0.36% on the day – down 1.46% year-to-date.
The Big Names – Dominion Resources (D) is down about 0.3%. Edison International (EIX) is relatively unchanged. First Energy (FE) is up about 1.3%. PG&E Corp (PCG) is relatively unchanged. Southern Company (SO) is down about 0.5%. The Utilities Select Sector SPDR (XLU) was trading at $36.75 at 3:30 PM on Thursday, up 0.22% on the day – up 2.14% year-to-date.
STOCKS: CVX, XOM, AA, DD, BA, CAT, GE, MMM, UTX, DIS, HD, MCD, KFT, KO, PG, WMT, JNJ, MRK, PFE, AXP, BAC, JPM, TRV, CSCO, HPQ, IBM, INTC, MSFT, T, VZ, D, EIX, FE, PCG, SO, BP, XOM, CVX, GMXR, ANR, ARI, JRCC, SWC, ALK, BA, AAMRQ, BAESY, EADSY, FDX, CAT, SI, OSK, MHP, APO, GM, EKDKQ, WGO, EMMS, RT, VOXX, LTM, MAR, BFB, RAD, STJ, GHDX, CELG, FMS, QGEN, MHP, APO, BAC, MSW, PVTB, AMT, FFCH, BPOP, ACC, BANR, MFGLQ, LNVGY, HPQ, DRWI, RELL, SCMR, HPY, CHKP, TXN, KITD, S, CLWR, TSTRQ