Closing Bell: Profit taking beats the bull (AGN, AIG, DOW, GS, LVS)

Filed under: Allergan (AGN), Goldman Sachs Group (GS), Amer Intl Group (AIG), Dow Chemical (DOW), Las Vegas Sands (LVS)

Today's lack of a rally came with little surprise. The massive gains yesterday were reminders of the panic buying seen in the past. Profit takers used the strength to unload on the new buyers who chased stocks yesterday.

Confusing housing data caused another brief hope because of an uptick, but that was following a downward revision. The Geithner-Bernanke testimony to Congress today did very little for the markets. Here were today's unofficial closing bell levels:

Dow 7,660.37 -115.49 (-1.49%)
S&P 500 806.37 -16.55 (-2.01%)
Nasdaq 1,518.70 -37.07 (-2.38%)

Top Analyst Upgrades & Downgrades

Continue reading Closing Bell: Profit taking beats the bull (AGN, AIG, DOW, GS, LVS)

Sonic's food may be served fast, but its earnings growth is anything but

Filed under: Earnings reports

Sonic (NASDAQ: SONC), the drive-in fast-food joint that competes with McDonald's (NYSE: MCD), Wendy's/Arby's Group (NYSE: WEN), Yum! Brands (NYSE: YUM), and Burger King (NYSE: BKC), reported second-quarter earnings after the bell on Monday. You know that video-game character Sonic the Hedgehog? Know how he's fast? Well, Sonic the burger server is unlike Sonic the software character right now when it comes to growing its business.

Continue reading Sonic's food may be served fast, but its earnings growth is anything but

The Geithner Private-Public Partnership: The cure may be worse than the disease!

Filed under: Market matters, Money and Finance Today, Economic data, Politics, Financial Crisis

As more details were unveiled yesterday about the Public-Private Partnership proposed by Secretary Timothy Geithner to deal with the "Toxic Assets" currently on the balance sheets of many of the major banks, the equity markets around the world experience what can only be described as euphoria. Equity markets in the United States experienced one of the biggest one-day rallies in history. Obviously, Wall Street likes the plan at first glance.

However, Paul Krugman, the liberal Noble Prize winner, wrote an editorial in The New York Times attacking the plan as "Cash for Trash." Subsequently, Newt Gingrich, the former Republican Speaker of the House, announced on Fox News that he agreed with Professor Krugman. When senior figures on both left and right agree, it may be wise to look past the euphoria.

Continue reading The Geithner Private-Public Partnership: The cure may be worse than the disease!

Illumina (ILMN): Genetic workhorse

Filed under: Newsletters, Stocks to Buy

"Illumina (NASDAQ: ILMN) makes the Genome Analyzer, which is the workhorse of the genetic medicine revolution," says growth expert Mike Cintolo in The Cabot Top Ten Report.

"The Illumina Genome Analyzer is used by genomic research centers, academic institutions, agriculture and livestock companies, pharmaceutical companies, clinical research organizations and biotechnology companies all over the world.

"In the fourth quarter of 2008, for example, the company launched the In? nium HD HumanCytoSNP-12 BeadChip, a 12 sample BeadChip priced as low as $125 per sample that enables researchers to analyze nearly 300,000 genetic markers per sample.

Continue reading Illumina (ILMN): Genetic workhorse

Major losses in store for airlines

Filed under: UAL Corp (UAUA), Delta Air Lines (DAL)

According to the Associated Press, the International Air Transport Association (IATA) believes that world airlines will lose $4.7 billion this year. A loss of this size is more than world airlines saw following the September 11, 2001 terrorist attacks. The industry group attributes the losses to "the rapid deterioration of the global economic conditions."

This revision basically doubles the earlier forecast from December, causing the CEO of the IATA, Giovanni Bisignani, to note that "The state of the airline industry today is grim ... Demand has deteriorated much more rapidly with the economic slowdown than could have been anticipated even a few months ago." The IATA predicts revenues will drop by $62 billion to $467 billion, a 12% decline.

Continue reading Major losses in store for airlines

What happens when Lyondell Bassell defaults with CDS protection?

Filed under: International markets, Recession, Financial Crisis

Lyondell Basell is the world's third largest petrochemical group. In January Lyondell put its U.S. units into Chapter 11 bankruptcy and missed its regular coupon payment of $680 million of 2015 European bonds. It was given a 30-day grace period that ran out this week. Then all hell broke loose.

Holders of the debt, including investment banks, had to vote to decide if Lyondell was in default. They voted "yes" on Friday. Now those who sold the credit default protection must come up with payment to cover losses on Lyondell bonds.

Continue reading What happens when Lyondell Bassell defaults with CDS protection?

Oilfield services: Four favorite turnarounds

Filed under: International markets, Exxon Mobil (XOM), Newsletters, Halliburton (HAL), Schlumberger Limited (SLB), Commodities, Oil, Stocks to Buy

"Many experts believe that oil prices are at unsustainably low prices now, and they expect a sharp rise in the commodity price as supply and demand come back into line again," says turnaround expert George Putnam.

In The Turnaround Letter, he suggests, "If oil does begin to rise again, the oilfield service stocks could rebound sharply." Here, he takes a look at large cap plays on a rebound within the oilfield services sector.

"We all know that oil prices have fallen dramatically from their highs in the summer of 2008. But different types of oil-related stocks have reacted quite differently to the price change in the underlying commodity.

"For example, while oil itself has dropped nearly 70% from its 12-month high, the stock of the largest integrated oil company, Exxon-Mobil (NYSE: XOM), is down only 26%, less than the stock market as a whole.

Continue reading Oilfield services: Four favorite turnarounds