Stocks News

The Euro lost its earlier gains from a five-day upward trend against the dollar and German 10-year bonds rose while the majority of European stocks fell ahead of tomorrow’s EU summit. Industrial metals turned out to be the leaders in growth among trading instruments. The 17-nation unified currency fell 0.2% to $1.3905 as of 8:11AM in London. Yields on 10-year German bonds dropped 2 basis points to 2.10%. Approximately two stocks fell for each stock that rose on the Stoxx Europe 600 Index; the index as a whole lost 0.2%. Futures on the Standard & Poor’s 500 Index fell 0.2%, while copper rose 1.1%, continuing its biggest two-week growth trend since 2009. Rice rose to its highest level in over a month. DT Trading analysts think that the world-wide growth in demand for products from Asian auto manufacturers is the main driving factor behind the growth in commodities prices, in spite of the market’s overall incredulity toward equity instruments and...

The company Oracle (ORCL) reported that their profit exceeded analysts’ predictions despite the fact that the company increased expenses on software creation – databases and applications that are helping it run its business. Oracle’s first quarter profit, excluding some points of the financial report, was 48 cents per share, exceeding the average prediction of 47 cents per share. Sales increased 12% to $8.37 billion, coinciding with analysts’ predictions. Oracle’s CEO Larry Ellison continues to benefit from more than $40 billion of mergers and acquisitions since 2005. These acquisitions added several programs to Oracle’s arsenal which are helping the giant corporation manage operations and solve complex computational problems. The income helped the company close the second quarter in a row with increased profit despite decreased sales of machinery and devices. The DT Trading Analytical Department thinks that the company’s optimized expenses during the escalating crisis and drop in production will help the company develop further given its decent profit figures. Oracle is...

US stocks rose during trading in New York yesterday, forming a peak in the best eight-day growth for the Standard & Poor’s 500 Index since 2009 amid expectations that the economy will continue to recover. However, DT Trading analysts observed that such growth still didn’t prevent speculation arising as a result of the antitrust suit the US Justice Department brought against AT&T Inc (T). Shares of the Ford Motor Co (F) and Alcoa Inc went up 2.3% each since the companies most tied to the real economy experienced growth. Joy Global Inc (JOYG) added 1.3% growth after the mining equipment producer published its income forecast which exceeds analysts’ expectations. Shares of AT&T fell 3.9%, limiting the growth of the Broad Market Index. This occurred after the US government filed a suit to prevent the company’s planned purchase of competitor T-Mobile USA Inc. The government said that the purchase would hinder competition on the wireless communications market. DT Trading analysts noted that...

GKN (LON:GKN), the engineering group, said this morning that it had signed an agreement with the shareholders of Germany’s Stromag Holding GmbH to acquire the business. The move will bolster GKN’s Land Systems division which was set up last summer to service customers in the off-highway market and pursue growth opportunities in high speed rail, renewable energy and defence. Stromag is a market leading engineer of industrial power management components. Its main products include hydraulic clutches, electro-magnetic brakes and flexible couplings serving end-markets including agricultural equipment, construction and mining machinery, renewable energy and the metal processing industry. The business is based in Unna, Germany and has operations in Germany, France, US, Brazil, India and China. GKN is paying €164 million (£146 million) in cash from existing resources for the equity and repayment of debt of €31 million (£28 million). Stromag is being acquired from shareholders including private equity firm Equita and a large number of other organisations and individuals, including management. In...

Stocks   Global equities were lower on Monday as traders are worried about the financial conditions of European banks. Stress tests last week revealed that many banks may need to raise additional capital due to falling sovereign debt bond prices. Debt worries were also headlining losses in the US, traders continue to worry about the lack of political agreement for raising the US’s debt ceiling. As such, financial stocks were the big losers today. Bank of America was lower by 2.8% while Deutsche Bank fell over 3.2%. Overall, the S&P 500 was 0.8% lower while the Dow lost 0.76%, while in Europe the CAC 40 was slightly more than 2.0% lower with the FTSE and DAX both losing 1.55%. Looking ahead, tech stocks will be in the spotlight tomorrow as bellwethers IBM and CSCO both released earnings after the close. Commodities With the exception of precious metals commodities were lower across the board. Agricultural and Soft commodities were especially hit hard as cotton fell 2.5%,...

The euro recovered some of its recent losses on Wednesday, in spite of Ireland being downgraded to junk by Moody's. At the moment, the euro added 0.82% to its value against the U.S. dollar to trade around $1.4091. At the same time, the euro surged against the Japanese yen as well. Currently, the euro is trading around ¥111.65, up 0.84%. The big question is where do traders find optimism about the troubled European currency? The focus of investors quickly shifted from Italy to Ireland on Wednesday, as Moody's downgraded Ireland to junk. In fact, it seems incredible how investors can follow all the debt problems in the Eurozone. A week ago it was all about Greece, yesterday it was Italy, today it is Ireland. Every day a new country it seems. Ireland, only a shadow of once mighty Celtic Tiger, has been the second Eurozone member to ask for a bailout, right after Greece. Ireland's bond spread over Germany has been growing...

We are downgrading our recommendation on Federated Investors, Inc. (FII) to Underperform from Neutral based on expected downward pressure on assets under management (AUM), flows and margins. Regulatory backdrop, waning equity markets and sluggish global economic growth are expected to keep earnings under pressure. Federated's lowered AUM has resulted in a negative organic growth in the core business as investors are transferring cash from money market funds to higher yielding bank deposits or investments across the fixed income universe and equities. A significant reduction in money market managed assets due to changes in financial markets, including increases in interest rates over a short period of time, considerable deterioration in investor confidence, prolonged periods of historically low short-term interest rates and resulting fee waivers, could have a material adverse effect on Federated's results of operations. Federated shares currently trade at 14.7x our 2011 earnings estimate, a 7.5% discount to the industry average. Our six-month target price of $22.00 equates to about 13.5x our...

A European court ruled Tuesday that internet auction website eBay (NASDAQ: EBAY) may be liable for trademark infringement committed by its users. eBay and French cosmetics manufacturer L'Oreal have been locked in legal proceedings for years. The cosmetics company previously sought $4.8 million in damages in 2009, accusing eBay of allowing counterfeit goods to be traded on its site. This year's ruling may translate to further legal action by L'Oreal, especially if eBay is determined to have an 'active role' in the criminal act. "When the operator has played an 'active role'..., it cannot rely on the exemption from liability which EU law confers, under certain conditions, on online service providers such as operators of Internet marketplaces," the court said in a statement. According to a Reuters report, "The court found that under EU law, member states had to ensure that national courts could order market operators to take measures that help to end trade mark infringements by users of a marketplace such as...

Bull Market or Blow Off Top for Stocks and ETFs? Recent stock market action has been remarkable, to say the least, confounding bulls and bears alike.  The former say it’s a new leg higher while the latter say the end of the world is nigh. Can the stock market and ETFs go higher or is this a blow off top like so many others that have preceded significant declines? Our view is that both the fundamental and technical picture point to significant downside risk for investors ahead. On My Wall Street Radar Below are two charts of the S&P 500 (SPY) with varying views and time frames.    Chart courtesy of www.stockcharts.com The above chart is a year to date view comparing three strong advances that were followed by significant downturns and you can also see how the 50 Day Moving Average has curled over from its previous upward trend. Chart courtesy of www.stockcharts.com This chart goes back to the March, 2009, lows and shows the uptrend that was just...

By:  Chuck Carnevale Earnings Yield the Foundation of Valuation Individual companies derive their value from the amount of earnings and cash flows they are capable of generating for their stakeholders.  The market will inevitably capitalize a publicly traded company’s shares based on the velocity and volume of earnings generated.  A PE ratio of plus or minus 15 generally applies to the average company growing earnings between zero and 12% a year.  The essence behind this valuation is the idea that any company that generates a profitable income stream is worth more than one times earnings. In other words, if you owned a profitable business, you would expect a prospective buyer to pay you more than one times its annual earnings, even if it wasn't growing.  As long as the business is profitable, it has a value greater than its annual profits.  From the seller's point of view, why sell your business for only what it would generate for you over such a short...