A great company is a great company. More importantly, in today’s economy, a weak and weakening company is just that — weak. And the stocks of weak or lousy companies, over time, go down. There are a lot more of them than great companies, setting up great short positions you can play buying puts.
In the 13 trading days since the S&P 500 Index closed at a new bear-market low of 676 on March 9, the index rocketed 23% to close Thursday’s trading at 833. Do these strong gains suggest the bear market is over? It’s doubtful this rally is sustainable beyond the next few weeks.
China is planning to make it easier for small and medium-sized companies to go public, setting up a new trading platform with looser listing rules, and also winning praise from investors and analysts.
The business environment for Chinese manufacturers continues to deteriorate at a quick pace, though the drop in March is less severe than in preceding months.
Hitachi Displays executive is indicted by a federal court in San Francisco for allegedly conspiring to fix prices for display panels sold to U.S. computer maker Dell.
The Bank of Japan’s quarterly tankan survey shows business sentiment among big manufacturing firms in the world’s second-largest economy falling to their lowest level on record.
HONG KONG (MarketWatch) — Japanese shares advanced early Wednesday in spite of weaker-than-expected results from the central bank’s tankan survey of business sentiment, with exporters such as Sony Corp. pacing the advance after overnight gains on Wall Street. The Nikkei 225 Average climbed 1.1% to 8,197.92, and the broader Topix Index added 1.4% to 784.36. The tankan survey showed business sentiment among Japan’s big manufacturing firms plunged to negative 58 in the first quarter, from negative 24 in the previous quarter. However, Sony shares climbed 3.9%, and shares of Mizuho Financial Group advaned 2.1%. Toyota Motor Corp. added 2.2% ahead of industry data on Japanese auto sales due out later Wednesday. Nippon Steel Corp. gained 1.1%, and Komatsu rose 2.7%.
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TOKYO (MarketWatch) — The Bank of Japan’s quarterly tankan survey showed that business sentiment among the nation’s big manufacturing firms fell to negative 58 in the first quarter, down from the negative 24 seen in the fourth quarter of last year. The negative reading was reportedly the lowest level on record. Consensus expectations were for a reading of minus 55, according to poll conducted by Reuters. The Royal Bank of Scotland’s Junko Nishioka expected a fall to negative 50.
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California’s “liquidity problems” may force the state to seek federal backstops for sales of its short-term notes this summer, even though it received heavy demand from retail buyers in a recent bond sale, its state treasurer says.
Convertible bonds were among the potentially valuable assets left trampled underfoot as hedge funds stampeded out of securities in the past half year, leaving bargains for investors who want to look through the rubble.
The great recession of 2008 and 2009 is likely to be not only the longest downturn since World War II, but also the most geographically widespread recession since at least the 1970s.
Since 1974, Americans have had the ability to use IRA assets to buy investment property. Yet the means to do that — called a self-directed IRA — remains one of the least known and unheralded investment vehicles in the vast financial marketplace.
SAN FRANCISCO (MarketWatch) — Honda Motor Co. will cut North American production by another 62,000 units, reduce pay of its salaried employees in North America, and force its hourly workers to take unpaid leave as car sales continue to plunge, the Wall Street Journal reported in its online edition Tuesday. Honda had already reduced production in North America by 204,000 units, bringing its unofficial output to 1.25 million in the fiscal year ending Tuesday, the newspaper said. In addition to pay cuts, bonuses this year will be greatly reduced or eliminated, a company spokesman told the Journal.
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Major Latin American equity markets rise as investors pick up stocks battered in the previous session, and as they move to close the books on the month and the first quarter of 2009.
SAN FRANCISCO (MarketWatch) — A Minnesota state panel dealt a setback to Sen. Norm Coleman’s re-election campaign Tuesday, when it said it will review only 400 rejected ballots dating from the November election. Coleman, a Republican, fought a hotly contested campaign against Democratic challenger Al Franken, leading to a recount and legal challenge from Coleman. But while Coleman had pressed for the inclusion of a wider number of wrongly rejected absentee ballots, a three-judge state panel said it will allow only for the review of 400 ballots. The ballots are expected to be reviewed by Minnesota’s secretary of state on April 7.
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It seems like a bad time for a company’s chief financial officer to leave, right in the middle of a reported search for more debt financing for more equipment to run its fast-growing business.
As bankers prepare to release their first-quarter results, they are looking to accounting regulators and their auditors to make changes that would beef up the value of their illiquid assets and in doing so, improve their profits and revenues.
SAN FRANCISCO (MarketWatch) — H.B. Fuller Co. said late Tuesday that its fiscal first-quarter profit fell to $6.1 million, or 13 cents a share, from $18.2 million, or 32 cents a share, in the year-ago period. Excluding one-time items, the specialty chemical maker would have reported earnings of 14 cents a share for the latest quarter. Revenue declined to $278.6 million from $322.7 million last year. Analysts surveyed by FactSet Research estimated a quarterly profit of 15 cents a share on revenue of $288.9 million.
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Apollo Group Inc. swings to a quarterly profit, but the educational services provider’s shares struggle in late trading.
SAN FRANCISCO (MarketWatch) — Macy’s Inc. said late Tuesday it revised its fiscal 2008 results to a net loss of $4.8 billion, or $11.40 a share, from a net income of $280 million, or 66 cents a share. The dramatic revision is due to a pre-tax goodwill charge of about $5.5 billion which it had previously detailed in its fourth-quarter earnings report. The department store company said the goodwill impairment estimate may be further adjusted in the first quarter. “The non-cash write-down of goodwill is expected to have no impact on the company’s business, bank credit agreement or bond indentures. The primary causes for the goodwill impairments are the deterioration in the general economic environment and the resulting decline in the company’s share price and market capitalization,” Macy’s said in a statement.
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SAN FRANCISCO (MarketWatch) — A Connecticut judge froze the assets of Bernard Madoff’s relatives and feeder funds that invested in the disgraced financier’s Ponzi scheme, according to media reports Tuesday. Connecticut Superior Court Judge Arthur Hiller reportedly froze assets of sons Mark Madoff and Andrew Madoff, as well as assets of wife Ruth Madoff and brother Peter Madoff. The judge also froze the assets of hedge fund Fairfield Greenwich founders Walter Noel and Jeffrey Tucker; Fairfield Greenwich managing director Andres Piedrahita; Maxam Capital manager Sandra Manzke; and Robert Schulman, who once ran Tremont Group Holdings, according to Reuters.
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NEW YORK (MarketWatch) — U.S. stocks on Tuesday closed the chapter on March with their strongest monthly gains in more than six years amid hopes of a fix for ailing financial firms. On Tuesday, the Dow Jones Industrial Average gained 86 points, or 1.2%, to end at 7,608, lifted by strong gains in shares of Citigroup , Bank of America and JP Morgan Chase . For the month, the Dow gained 7.7%, its best monthly gain since Oct. 2002. The S&P 500 index gained 10 points, or 1.3%, to 797 on Tuesday. It rose 8.5% for the month, also its best monthly performance since Oct. 2002. The Nasdaq Composite gained 26 points, or 1.8%, to end at 1,528 Tuesday. It rose 10.9% in March, its best monthly gain since Nov. 2002. Stocks remain down for the first quarter, however, with the Dow off 13.3%, the S&P 500 down 11.7%, and the Nasdaq off 3.1%.
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SAN FRANCISCO (MarketWatch) — Apollo Group Inc. late Tuesday reported it recovered to a net income of $125.3 million, or 77 cents a share, in the second quarter from a net loss of $32 million, or 19 cents a share, a year earlier. Revenue rose to $876.1 million from $693.6 million a year ago due to a 20.4% rise in degree enrollments, the Phoenix-based education company said. Analysts polled by FactSet Research had forecast earnings of 64 cents a share on revenue of $840.1 million.
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SAN FRANCISCO (MarketWatch) — Hewlett-Packard Co. is reportedly testing Google Inc.’s Android operating system for possible use in some of the computer giant’s netbook PCs. The Wall Street Journal reported that H-P has been running tests on Android, which Google originally developed for use in mobile phones. The Journal reported that H-P didn’t say if it would use Android instead of Microsoft Corp.’s Windows operating system in any of its netbooks, or mini-PCs, but the company is studying the Google software. H-P shares fell 6 cents to close Tuesday at $32.06 while Google rose $5.37 a share to end the day at $348.06.
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SAN FRANCISCO (MarketWatch) — California will try to target European investors with a planned sale of bonds, estimated in the range of $3 billion to $4 billion, next month under a new federal program that subsidizes municipal bond issuance, state Treasurer Bill Lockyer said Tuesday. Bonds issued under what’s known as the Build America program, part of the February economic stimulus package, would not be tax exempt — unlike most municipal bonds. That makes them attractive to a different type of institutional investor. “There are huge banks and insurance pools. We’re hoping it will be a door to European investors,” Lockyer said in an interview here. “Maybe some day we’ll need to figure out how to access Middle Eastern and Asian investors,” he said.
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SAN FRANCISCO (MarketWatch) — Facebook Inc. Chief Financial Officer Gideon Yu will leave the company, the company said Tuesday. Facebook has started searching for a successor with more public company experience, according to the social networking Web site.
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SAN FRANCISCO (MarketWatch) — California is in talks with Treasury Department staff, including Secretary Timothy Geithner, about getting federally issued letters of credit to back upcoming issues of short-term securities known as revenue anticipation notes, State Treasurer Bill Lockyer said Tuesday. In an interview here, he said the state is talking to Treasury about “short-term liquidity problems” in the state and its municipalities. California, which has the lowest credit rating in the nation, recently issued $6.5 billion in general obligation bonds to heavy retail demand. But its deep deficit and worsening economy have created a cloud over its future borrowing abilities. Lockyer said the state will probably issue about $12 billion to $16 billion revenue anticipation notes, a type of short-term debt, this summer. But it may have trouble getting private banks to issue letters of credit to secure the notes, he said.
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Russia’s benchmark stock index surges 27% in March, as a rise in oil prices and stabilization in the ruble exchange rate encourage investors to flock to one of last year’s most neglected markets.
SAN FRANCISCO (MarketWatch) — Standard & Poor’s Ratings Services on Tuesday lowered Fiat’s long-term corporate credit rating to junk status of BB+ from BBB- and kept the rating on CreditWatch with negative implications. It also cut Fiat’s short-term rating to B from A-. “The downgrade reflects our opinion of Fiat’s weak liquidity position considering 2009 and 2010 debt maturities,” said Barbara Castellano, S&P’s credit analyst. The ratings agency also warned that the deterioration of global auto demand could negatively affect Fiat’s operating performance and increase the risk of the Italian industrial group having to burn cash again in 2009.
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NEW YORK (MarketWatch) — Crude-oil rose Tuesday, extending their monthly gains to nearly 11% as rising stock markets helped boost investment sentiment while a weakening greenback increased dollar-denominated commodities prices. Investors also bought up futures contracts to beef up their portfolios on the last day of the quarter, analysts said. The rally came even after newly released data indicated a slump in U.S. home values and analysts forecast another rise in U.S. crude inventories. Crude for May delivery ended up $1.05, or 2.2%, at $49.66 a barrel on the New York Mercantile Exchange. It fell 1.3% to $47.77 earlier. Crude ended March trading up 10.9%. It rallied 11.3% in the first quarter.
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SAN FRANCISCO (MarketWatch) — American International Group directors Virginia Rometty and Michael Sutton won’t stand for reelection at this year’s annual shareholder meeting, according to a Securities and Exchange Commission filing Tuesday by the government-owned insurer. The two directors told AIG about their decision on March 25, the company added.
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Treasury prices rise, helped by disappointing economic data and investors buying U.S. debt at the end of the quarter to show less risky holdings in their accounts.
SAN FRANCISCO (MarketWatch) — Alcoa Inc. said Tuesday it has partnered with the New York Power Authority to preserve about 1,100 jobs at the aluminum producer’s smelters in Massena, N.Y., in preparation for a modernization of the facilities. Alcoa had considered curtailing operations at the smelters because of a drop in aluminum prices.
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Tensions are on display as leaders of the 20 most powerful economies prepared to gather in less than two days to deal with the deepest global economic downturn since the end of World War II.
Americans remain pretty discouraged about the economy and are worried about losing their jobs, but judging from some recent sentiment surveys, they may be slowly regaining faith that things will look better in the fall.
NEW YORK (MarketWatch) — Gold futures rose Tuesday for the first session in three, moving higher as a weaker U.S. dollar increased gold’s appeal as an investment alternative. However, rising U.S. stocks curbed the metal’s attractiveness and limited gains in prices. Gold for April delivery rose $7.10, or 0.8%, to end at $922.60 an ounce on the Comex division of the New York Mercantile Exchange. The more actively trading June contract gained $7.30, or 0.8%, to $925 an ounce. For March, gold fell 2.1%, down for the first month in five. But the metal gained 4.3% in the first quarter.
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Many of us are having trouble just slogging through the bill payments each month. Yet we have finally started saving again: From the negative savings rate we posted for much of this decade, we suddenly have decided to stash away about 4% of our earnings.
NEW YORK (MarketWatch) - Shares of oil and natural gas producers got back on their feet after bruising losses in recent sessions and ran toward the finish line in the last trading day of March on Tuesday.
As the first quarter of the year comes to an end, technology stocks are mostly on the rise in early trading, as IBM Corp. leads a rebound in an attempt to recoup some of the previous session’s losses.
WASHINGTON (MarketWatch) — It won’t be easy for the Federal Reserve to shrink its balance sheet of loans to banks once they are no longer needed, said Philadelphia Fed President Charles Plosser. In a speech in Chicago, he said he feared that pressure from special interests might delay the unwinding. Some will argue that same markets are too fragile to go alone, or that the economy’s “headwinds” are too strong. “We will need to have the fortitude to make some difficult decisions about when our policies must be reversed or unwound,” he said.
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SAN FRANCISCO (MarketWatch) — Kraft Foods Inc. said Tuesday it is recalling products that contain pistachios because of a possible salmonella contamination. The recall covers Planters and Back to Nature products that contain pistachios supplied by Setton Pistachio of Terra Bella Inc. after Sept. 1, 2008. No cases of salmonella poisoning connected with the products have been reported.
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NEW YORK (MarketWatch) The Financial Services Authority, the U.K.’s securities watchdog, said on Tuesday that it has arrested two people, including a senior corporate finance adviser, in connection with an ongoing investigation into suspected organized insider trading. It also said that it executed search warrants at a number of London locations as part of the probe. “The operation carried out this morning involved 25 FSA staff, assisted by 11 officers from the City of London Police, and is part of the FSA’s work to tackle market abuse,” the agency said Tuesday, without providing any more details.
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SAN FRANCISCO (MarketWatch) — Caterpillar said Tuesday it is concerned for the safety of its employees after workers detained four Caterpillar managers at a plant in Grenoble, France. However, no injuries have been reported so far and the managers are able to communicate with people outside of the plant, according to Caterpillar. French workers reportedly barricaded the managers in an office to demand new negotiations over lay offs at the factory, according to the AFP. “The actions that are taking place today, led by a small minority of individuals, are not helping as we work for a positive resolution of this situation,” Caterpillar said in a statement.
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Far-reaching credit card rules are moving forward in Washington after a Senate committee approves reforms that will restrict fees and charges, increase disclosure, and protect younger consumers.
The news is getting worse in the newspaper industry. The Sun-Times Media Group, which presides over the Chicago Sun-Times and 58 other newspapers, has filed for bankruptcy. It’s the fifth newspaper publisher in recent months to seek protection from creditors.
SAN FRANCISCO (MarketWatch) — Cardinal Health Inc. said Tuesday it will trim its global workforce by 800 jobs over the next six months to help cut costs. Cardinal estimates it will save about $110 million to $130 million a year within two years. The health care industry products and services provider will also trim 500 jobs through normal attrition and not filling open roles. As a result, Cardinal expects a charge of about $33 million for the remainder of the year, and an additional charge of about $24 million in fiscal 2010.
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Mark-to-market accounting may be dead on Wall Street. And dead assets may soon have new life via write-ups. Call them zombie assets. Zombie assets at zombie banks could be the reality should Rep. Barney Frank, D-Mass., get his way.
NEW YORK (MarketWatch) — The U.S. Government Accountability Office said on Tuesday that its review shows that the Treasury has had disbursed $303.4 billion of the $700 billion in Troubled Asset Relief Plan (TARP) funds. Most of the funds, almost $199 billion, went to purchase preferred shares of 532 financial institutions under the Capital Purchase Program (CPP), the GAO said. The agency said the Treasury is becoming more transparent with the TARP plan but Treasury, “should provide additional important information about how the capital investments are impacting participants’ lending activities and capital levels.”
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Among the companies whose shares are expected to see active trade in Tuesday’s session are Apollo Group Inc., KLA-Tencor., GlaxoSmithKline and Ingersoll-Rand.
LONDON (MarketWatch) — Barclays , confirming a number of press reports, said that CVC Capital Partners is a preferred bidder for its iShares exchange-traded funds business. If these negotiations reach a satisfactory conclusion, it would lead to a sale of Barclays iShares business without the attributable securities lending business. Earlier speculation assumed the sale of both iShares and securities lending.
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