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Stock Market & Financial Investment News

News Breaks
July 17, 2014
13:18 EDTMSFT, UNH, EBAY, DRC, SIEGY, MAT, AN, SNDKOn The Fly: Midday Wrap
Stocks on Wall Street opened in negative territory and have remained there for most of the morning. The averages recaptured most of their losses and the Dow made it across the flat line and briefly into positive territory by mid-morning, but around the time the European markets closed reports surfaced that a Malaysian passenger jet crashed on the Russian-Ukraine border. The averages fell quickly but have since pared their losses as speculation runs rampant as to whether the jet was shot down or crashed due to an accident. ECONOMIC EVENTS: In the U.S., weekly jobless claims dipped 3K to 302K in the week ended July 12. Housing starts dropped 9.3% to a 893K rate in July, while building permits declined 4.2% to a 963K rate. Both were expected to rise to rates over 1M. The Philly Fed manufacturing index climbed 6.1 points to 23.9 in July, beating expectations for it to have dipped to 16.0. Notably, an adviser to Ukraine's Interior Ministry said a Malaysia Airlines passenger jet carrying more than 200 people crashed while flying over eastern Ukraine, near its border with Russia. A report claimed that 23 U.S. citizens were killed in the crash. COMPANY NEWS: Shares of Microsoft (MSFT) advanced 2% after the tech giant announced a plan to simplify its operations, which will result in the elimination of up to 18,000 jobs over the next year. Of that total, over two-thirds will come from positions to be eliminated at the phone business Microsoft recently purchased from Nokia. In an email to Microsoft employees on the integration of Nokia and the broad restructuring, CEO Satya Nadella said the decision to change was "difficult, but necessary" and will result in the company having fewer layers of management. MAJOR MOVERS: Among the notable gainers was Dresser-Rand (DRC), which jumped 12.5% after Germany's Manager Magazin reported that Siemens (SIEGY) is working with Lazard on a takeover bid for the company. Also higher following their earnings reports were Dow member Unitedhealth (UNH), which rose more than 3%, and eBay (EBAY), which gained about 2%. Among the noteworthy losers following their earnings reports were SanDisk (SNDK), which fell over 12%, Mattel (MAT), which slid 6%, and AutoNation (AN), which dropped 6% as well. INDEXES: Near midday, the Dow was down 17.82, or 0.1%, to 17,120.38, the Nasdaq was down 22.16, or 0.5%, to 4,403.81, and the S&P 500 was down 5.69, or 0.29%, to 1,975.88.
News For MSFT;UNH;EBAY;DRC;SIEGY;MAT;AN;SNDK From The Last 14 Days
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July 16, 2014
15:27 EDTUNHNotable companies reporting before tomorrow's open
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15:27 EDTEBAY, SNDKNotable companies reporting after market close
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14:55 EDTMATMattel July 39 straddle priced for 5.1% move into Q2
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14:32 EDTUNHUnitedHealth July 84 straddle priced for 2.8% move into Q2
13:52 EDTSNDKSanDisk July 107 straddle priced for 5.5% move into Q2
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13:52 EDTMSFTMicrosoft advances strongly after Intel comments on PCs
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13:44 EDTSNDKEarnings Preview: Stifel sees SanDisk results, guidance topping expectations
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13:25 EDTEBAYeBay July 50.5 straddle priced for 4.2% move into Q2
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13:20 EDTEBAYEarnings Preview: eBay set to report Q2 earnings since security breach
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12:47 EDTMSFTYahoo falls after results disappoint, details additional plans for Alibaba stake
Shares of media and search engine company Yahoo (YHOO) are falling after the company's second quarter results fell short of analysts' consensus estimates. The company also said it will lower the amount of stock it will sell in Alibaba's initial public offering to 140M shares and that it plans to return "at least half" of its after-tax proceeds from the stake sale to its shareholders. WHAT'S NEW: Last night, Yahoo reported Q2 earnings per share of 37c and revenue ex-tac of $1.04B, narrowly missing analysts' consensus estimates of 38c and $1.08B, respectively. The company's Q2 display ad revenue fell 7% to $394M, while Q2 price per ad fell 24% versus last year. Q2 search revenue ex-tac increased 6% to $428M. Yahoo said that in Q2, the number of ads sold increased approximately 24% compared to last year, while the number of paid clicks increased approximately 3%. Price-per-click increased 15% compared to last year. Marissa Mayer, Yahoo's Chief Executive Officer, said that as the company's top priority is revenue growth, it is "not satisfied" with Q2 results. Mayer noted that several areas showed strength in the quarter, including Yahoo Search, which grew 6% year-over-year on a revenue ex-tac basis, but their growth was offset by declines. Meyer says the company needs to "work faster to ameliorate" negative trends in display. Mayer says the company "can and will do better" going forward. WHAT'S NOTABLE: Looking ahead, Yahoo forecast third quarter revenue ex-tac of $1.02B-$1.06B, below the consensus of $1.1B. The company also guided Q3 adjusted earnings before interest, taxes, depreciation and amortization, or EBTIDA, at $220M-$260M and non-GAAP operating income of $70M-$110M. Yahoo also noted that it will lower the number of shares it sells in the Alibaba IPO to 140M from 208M, and is committed to return at least half of the after-tax IPO proceeds to shareholders. Mayer noted on the company's earnings conference call that "A transformation of this size will take several years," adding that "it will take a little longer than originally forecasted." ANALYST REACTION: This morning, research firm CRT Capital downgraded Yahoo to Fair Value from Buy, citing mixed Q2 earnings and weak guidance. The firm sees pressure on ad pricing continuing for at at least two to three quarters. Another firm, Bernstein, lowered their price target on Yahoo to $40 from $43 following the company's weaker than expected results and said that it would return 50% of its proceeds from the Alibaba IPO to shareholders. The firm thinks there is an increased risk that Yahoo will use the other 50% on M&A, and Bernstein sees high risk that the M&A will destroy value. Bernstein kept an Outperform rating on the stock. Piper Jaffray said Yahoo should be owned ahead of the Alibaba IPO, noting its agreement with Alibaba to reduce the number of shares it will sell at the IPO should outweigh the "unsurprising" challenges in the company's core business. The firm, which kept an Overweight rating on the stock, expects the stock to react positively on the Q2 earnings report. PRICE ACTION: In early afternoon trading, Yahoo fell $1.66, or about 4.7%, to $33.95 on heavy trading volume. Despite today's pull back, the stock is up approximately 25% over the past 12 months. OTHERS TO WATCH: Yahoo peer AOL (AOL) is down over 4.% to $38.98. Jackie Reses, Yahoo's chief of mergers and acquisitions, said at the Fortune Brainstorm Tech Conference that the company is not planning to buy AOL, Re/code reported this morning. Mayer previously told a number of people that she does not "get" the merger.
11:50 EDTMATMattel technical comments before earnings
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11:11 EDTSIEGYSiemens, SK Engineering granted dismissal in Pemex suit, Reuters says
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10:00 EDTDRCOn The Fly: Analyst Initiation Summary
Today's noteworthy initiations include: American Airlines (AAL) initiated with an Overweight at Atlantic Equities... Apple (AAPL) initiated with a Buy at Citigroup... Basic Energy (BAS) initiated with a Neutral at RW Baird... Brookdale Senior Living (BKD) initiated with a Buy at Goldman... CA Technologies (CA) initiated with a Market Perform at FBR Capital... Dresser-Rand (DRC) initiated with a Neutral at RW Baird... Fortinet (FTNT) initiated with a Neutral at Goldman... Frank's International (FI) initiated with a Hold at Jefferies... Home Bancorp (HBCP) initiated with an Outperform at Fig Partners... Key Energy (KEG) initiated with an Outperform at RW Baird... McDermott (MDR) initiated with a Neutral at Tigress Financial... ORBCOMM (ORBC) initiated with a Neutral at Macquarie... Oil States (OIS) initiated with an Outperform at RW Baird... PBF Energy (PBF) initiated with an Equal Weight at Barclays... Palo Alto (PANW) assumed with a Conviction Buy at Goldman... Proofpoint (PFPT) initiated with a Buy at Goldman... Qlik Technologies (QLIK) initiated with a Market Perform at FBR Capital... Radius Health (RDUS) initiated with a Buy at Canaccord... Seventy Seven Energy (SSE) initiated with a Hold at Jefferies... Superior Energy (SPN) initiated with an Outperform at RW Baird... Tandem Diabetes (TNDM) initiated with an Outperform at William Blair... Trecora Resources (TREC) initiated with a Buy at B. Riley... Ultragenyx (RARE) initiated with an Outperform at RW Baird... United Natural Foods (UNFI) initiated with an Outperform at Oppenheimer... Viper Energy (VNOM) initiated with a Market Perform at Northland... Whiting Petroleum (WLL) initiated with a Buy at Tigress Financial.
08:09 EDTMSFT21Vianet and GigaTrust sign partnership agreement in China
21Vianet (VNET) and GigaTrust, provider of Microsoft (MSFT)-based email and document protection software solutions for mobile devices, have signed an exclusive partnership agreement for the China market. 21Vianet will market and sell the portfolio of GigaTrust security products to enterprises and Office 365 cloud subscribers in China.
08:03 EDTSNDKSanDisk announces expiration of HSR waiting period for Fusion-io purchase
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08:02 EDTSIEGYSiemens expands strategic partnership with Penn State
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06:56 EDTSNDKSanDisk volatility increases into Q2 and outlook
SanDisk July call option implied volatility is at 79, August is at 38, October is at 34; compared to its 26-week average of 30 according to Track Data, suggesting large near term price movement in the expected release of Q2 results after the market close on July 16.
06:24 EDTMSFTMicrosoft aims to reduce 1K jobs in Finland, Reuters says
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06:16 EDTSNDKSanDisk partners with Rockchip for iNAND solutions, DigiTimes reports
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06:14 EDTMSFTABI Research: More than 2B smartphones to ship in 2018, DigiTimes says
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