24/7 Wall St. » AIG

24/7 Wall St. Closing Bell (AIG, COP, HSY, PSX, DMD, AOL, AGU, DTG, M, MPEL, TM, SODA, AMCX, MT, ESRX, MCP, JWN, NUAN, HNR, KSS, PEIX, CPWM, AMRS, ACI)

Paul Ausick — Wed, 09 May 2012 20:06:42 +0000

The major US stock indexes opened sharply lower again this morning as investors consider Greece’s commitment to the austerity measures it had previously agreed to. Renegotiating the deal seems out of the question (more coverage here) and there is even the threat that the EU will not pay the first tranche of the bailout deal when it is due tomorrow (more coverage here). US oil inventories rose last week, putting more pressure on prices today (more coverage here).The US dollar index rose today, now up 0.43% at 80.077. The GSCI commodity index is down -0.5% at 648.60, with commodities mixed on the stronger dollar. WTI crude oil closed down -0.5% at $96.71/barrel and Brent crude trades up 0.02% at $112.75/barrel. Gold settled down -0.6% today, at $1,594.20/ounce, the yellow metal’s first sub-$1,600/ounce closing since December.

The unofficial closing bells put the DJIA down nearly 97 points to 12,835.44 (-0.75%), the NASDAQ fell more than11 points (-0.39%) to 2,934.71, and the S&P 500 fell 0.67% or more than 9 points to 1,354.61.

There were several analyst upgrades and downgrades today, including American International Group Inc. (NYSE: AIG) raised to ‘buy’ at Goldman Sachs; ConocoPhillips (NYSE: COP) resumed as ‘neutral’ at Credit Suisse; The Hershey Co. (NYSE: HSY) raised to ‘buy’ at Argus; Phillips 66 (NYSE: PSX) started as ‘outperform’ at Credit Suisse; and Demand Media Inc. (NYSE: DMD) raised to ‘buy’ at Citigroup.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: AOL Inc. (NYSE: AOL) is up 3.8% at $26.55; Agrium Inc. (NYSE: AGU) is down -2.2% at $82.69 (more coverage here); Dollar Thrifty Automotive Group Inc. (NYSE: DTG) is up 0.2% at $80.68; Macy’s Inc. (NYSE: M) is down -3.6% at $38.07 (more coverage here); Melco Crown Entertainment Ltd. (NASDAQ: MPEL) is down -0.2% at $13.96; Toyota Motor Corp. (NYSE: TM) is up 3.1% at $80.58; and SodaStream International Ltd. (NASDAQ: SODA) is up 28% at $37.35.

On Wednesday we are scheduled to get earnings from AMC Networks Inc. (NASDAQ: AMCX), ArcelorMittal (NYSE: MT), Express Scripts Holding Co. (NASDAQ: ESRX), Molycorp Inc. (NYSE: MCP); Nordstrom Inc. (NYSE: JWN); Nuance Communications Inc. (NASDAQ: NUAN); Harvest Natural Resources Inc. (NYSE: HNR); Kohl’s Corp. (NYSE: KSS); and Pacific Ethanol Inc. (NASDAQ: PEIX).

Other standouts from today include the following stocks:

Cost Plus Inc. (NASDAQ: CPWM) is up 21.9% at $21.92 after posting a new 52-week high earlier today. The company is being acquired by Bed Bath & Beyond Inc. (NASDAQ: BBBY) for $495 million.

Amyris Inc. (NASDAQ: AMRS) is down -21.7% at $1.98 after posting a new 52-week low of $1.89 earlier today. The biofuels and biotech company posted much higher-than-expected shortfalls in both EPS and revenues.

Arch Coal Inc. (NYSE: ACI) is up 10.1% at $8.37. The coal miner had no news today, but investors are piling in at a very low price. Volume today topped 25 million shares, more than double Arch’s daily average.

Stay tuned for Thursday. Fed Chairman Ben Bernanke and Minneapolis Fed President Naryana Kocherlakota are giving speeches. We have noted the following events on the schedule (all times Eastern):

8:30 a.m. – International trade report
8:30 a.m. – New claims for unemployment benefits
10:30 a.m. – EIA weekly natural gas storage report
1:00 p.m. – 30-year note auction
2:00 p.m. – Treasury budget
4:30 p.m. – Federal Reserve balance sheet and money supply

Paul Ausick

Filed under: General Tagged: ACI, AGU, AIG, AMCX, AMRS, AOL, BBBY, COP, CPWM, DMD, DTG, ESRX, HNR, HSY, JWN, KSS, M, MCP, MPEL, MT, NUAN, PEIX, PSX, SODA, TM

Top Analyst Upgrades & Downgrades (AIG, ADI, ARNA, COP, DMD, DOW, FOSL, HSY, JIVE, MRVL, MELI, PSX, QIHU, UBNT, YOKU)

Administrator — Wed, 09 May 2012 12:24:41 +0000

These are some of the top analyst upgrades, downgrades and initiations seen in Wall Street research calls this Wednesday.

American International Group, Inc. (NYSE: AIG) Raised to Buy at Goldman Sachs.

Analog Devices, Inc. (NASDAQ: ADI) Cut to Neutral at UBS.

Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) Raised to Outperform at BMO.

ConocoPhillips (NYSE: COP) Resumed as Neutral at Credit Suisse.

Demand Media, Inc. (NYSE: DMD) Raised to Buy at Citigroup.

The Dow Chemical Company (NYSE: DOW) Raised to Overweight at Morgan Stanley.

Fossil, Inc. (NASDAQ: FOSL) Cut to Neutral at JPMorgan.

The Hershey Company (NYSE: HSY) Raised to Buy at Argus.

Jive Software, Inc. (NASDAQ: JIVE) Started as Hold at Needham

Marvell Technology Group Ltd. (NASDAQ: MRVL) Cut to Neutral at UBS.

Mercadolibre, Inc. (NASDAQ: MELI) Cut to Market Perform at Raymond James.

Phillips 66 (NYSE: PSX) Started as Outperform at Credit Suisse.

Qihoo 360 Technology Co. Ltd (NYSE: QIHU) Started as Buy at ThinkEquity.

Ubiquiti Networks, Inc. (NASDAQ: UBNT) Started as Outperform at Wedbush (late Tuesday call).

Youku Inc. (NYSE: YOKU) Started as Hold at ThinkEquity.

If you enjoyed the top analyst upgrades and downgrades, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox. We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

JON C. OGG

Filed under: Analyst Calls Tagged: ADI, AIG, ARNA, COP, DMD, DOW, FOSL, HSY, JIVE, MELI, MRVL, PSX, QIHU, UBNT, YOKU

Media Digest (5/8/2012) Reuters, WSJ, NYT, FT, Bloomberg

247wallst — Tue, 08 May 2012 10:30:38 +0000

The GAO says the government could make $15.1 billion on its AIG (NYSE: AIG) bailout investment. (Reuters)

Facebook CEO Mark Zuckerberg begins the company’s IPO road show. (Reuters)

Comscore says people spent more time on Facebook via mobile devices than on PCs during March. (Reuters)

Yahoo! (NASDAQ: YHOO) CEO Scott Thompson issues an apology to employees over a resume misstatement scandal as its board meets to determine his fate. (Reuters)

Gasoline prices fall for the fifth-consecutive week. (WSJ)

The political turmoil in Greece threatens to break its bailout agreement with Europe. (WSJ)

Walt Disney’s (NYSE: DIS) ABC News and Univision to start a 24-hour news channel broadcast in English. (WSJ)

Electronic Arts (NASDAQ: EA) stock is hurt as its delays launching important games. (WSJ)

The Ontario Teachers Pension Plan says it is opposed to Sprint-Nextel (NYSE: S) CEO Dan Hesse’s reelection to the board of the telecom firm. (WSJ)

Lenovo plans to develop products other than PCs. (WSJ)

A court says that Google’s (NASDAQ: GOOG) Android software violates Oracle’s (NASDAQ: ORCL) IP, but the financial damages likely will be light. (WSJ)

Regulators probably will approve a plan by Anadarko Petroleum (NYSE: APC) to drill 3,700 natural-gas wells in eastern Utah. (WSJ)

The Fed says consumer borrowing rose 10.2% in March. (WSJ)

Hollande of France and Merkel of Germany will meet to talk about the future of the eurozone. (WSJ)

The FAA will delay plans to upgrade fuel tanks on many airline planes. (WSJ)

A new wave of start-ups works on programs to upload personal videos to smartphones. (WSJ)

Spain will begin a new program to help the balance sheets of its troubled banks. (WSJ)

High-yield bond yields hit record lows. (WSJ)

Amazon.com (NASDAQ: AMZN) to sell high-end fashion products. (NYT)

The sales of used SUVs remain good as people move to more fuel-efficient new cars. (NYT)

Scientists begin to look at whether airline seats are strong enough for some heavy passengers. (NYT)

A failure of Greek parties to form a coalition may lead to a new round of elections. (FT)

Spain will have to spend billions of dollars to rescue weak banks. (FT)

Iran will take yuan as payment for oil. (FT)

A credit rating agency downgrade of Morgan Stanley (NYSE: MS) would prompt it to increase its collateral sharply. (FT)

Antitrust investigations against Google (NASDAQ: GOOG) in Europe expand. (Bloomberg)

Douglas A. McIntyre

Filed under: Press Digest Tagged: AIG, AMZN, APC, DIS, EA, ETRS, GOOG, MS, ORCL, S, YHOO

Treasury Sale of AIG Shares Hammers Share Price (AIG)

Paul Ausick — Mon, 07 May 2012 14:22:03 +0000

At one time US taxpayers owned more than 90% of American International Group Inc. (NYSE: AIG). Today taxpayers own about 63% of the insurance giant, following AIG’s purchase of about 65 million shares from the US Treasury for $30.50/share. The sale totaled about $5 billion.

Following a strong quarterly earnings report, AIG shares closed last week at $32.94, well above the price the company paid for the Treasury’s shares. Traders immediately pushed the price of AIG shares down to the price paid to the Treasury Department, but prices have recovered somewhat since then.

Depending on one’s view of what the Treasury paid for AIG’s stock, US taxpayers made a profit of about 6% on the shares it sold today based on the Treasury’s stated purchase price of $28.73/share. There is an argument, however, that the AIG stock actually cost taxpayers $43.53/share, which means that today’s sale totes up to a loss of about -30%.

The one indisputable aspect of today’s sale, though, is that the Treasury received $1.50/share more from AIG than it had in two previous sales. A research note from Bernstein notes “future offerings will likely be priced at levels at or above today’s offering price, for we think the weekend trade has taken away the prospect of another offering at $29 and will force a decision on the investors who’ve been waiting for the stock to return to that level.”

Shares of AIG were down about -7% right at the opening, but have since come back slightly, to trade down -5.6% at $31.00 in a 52-week range of $19.28-$35.05.

Paul Ausick

Filed under: Banking, Economy, Politics, Stock Buybacks Tagged: AIG, featured

What’s Important In The Financial World (5/7/2012) Gas Prices Fall, U.S. to Cut AIG Stake

247wallst — Mon, 07 May 2012 10:25:34 +0000

France and Greece are not the only nations in which the forces of austerity suffered a setback. The party of Angela Merkel, the champion of government cost cuts across Europe, gave up ground in local elections. Merkel’s coalition appears to have lost its majority in the northern state of Schleswig-Holstein. National elections in Germany are a year away. Time is short for Merkel to calm the voters of her own country, many of whom are angry that their taxes have gone indirectly to bail out Greece. Merkel, who is unlikely to back down from her austerity stance against the new French government and forces in Greece, may be in trouble for her decisions to participate in bailouts at all.

Gasoline Prices Fall

The widely followed Lundberg Survey showed that gasoline prices fell 6.75 cents to $3.8452 a gallon for the average price of regular, based on national samples. The data for was the period that ended May 4. After a brief pause, the cost of gas has begun to move lower again. It likely will continue. WTI dropped briefly below $100 last year. Most economists think that the fight over austerity in Europe will go on for months, as many nations slip further into recession. And Greece could still leave the European Union, which would likely drive it into depression. The fall-off in gross domestic product among many European nations is expected to hurt China’s export machine, which is another huge consumer of crude.

U.S. to Cut Stake in AIG

The U.S. government will cut its stake in AIG (NYSE: AIG) again. It plans to reduce its total piece of the company to 63%. The cost of the bailout to taxpayers have been calculated to be as high as $180 billion. Many experts believe that amount will never be recouped. However, Tim Massad, the U.S. Treasury assistant secretary for financial stability, said “We remain hopeful that taxpayers will ultimately recover every single dollar invested in the company, which is something few would have expected during the depths of the financial crisis.” At this point, that seems unlikely, based on the price of AIG’s stock. The Federal Reserve and Treasury supported an AIG bailout in 2008 because its huge number of relationships with other financial firms would have caused catastrophic ripples through the credit system. The Treasury will sell the stock at $30.30, about 5% below where it has recently traded. AIG may buy back some of the shares on its own.

Barclays Online Bank

Barclays, the UK-based bank, has decided to move into the U.S. online bank business. The move is a mystery, given the competition from American banks, brokers and financial advisors. Barclays believes that being in the credit card industry gives it a platform to add customers. However, competitors Citgroup (NYSE: C), Wells Fargo (NYSE: WFC), JP Morgan (NYSE: JPM) and Bank of America (NYSE: BAC) have many more card members. The “big four” American banks also have gathered deposits for years through their branch systems. They have successfully migrated many of those customers to Internet-based retail bank platforms. Barclays has little leverage to make this initiative successful.

Douglas A. McIntyre

Filed under: Market Open Tagged: AIG, BAC, C, featured, JPM, WFC

Media Digest (5/7/2012) Reuters, WSJ, NY Times, FT

247wallst — Mon, 07 May 2012 10:22:14 +0000

Voters in Greece and France turn away from German austerity measures set for the region’s weakest nations. (Reuters)

AT&T (NYSE: T) moves into the home monitoring market. (Reuters)

Ally Financial falls back into financial trouble. (Reuters)

LG Electronics will release a Google (NASDAQ: GOOG) TV later this year. (Reuters)

Lenovo to invest $800 million to move into mobile products markets. (Reuters)

The FDA could approve drugs to prevent healthy people from getting HIV. (WSJ)

India starts a Google antitrust investigation. (WSJ)

The “Avengers” will help press the results of Walt Disney’s (NYSE: DIS) movie studio higher. (WSJ)

Barclays (NYSE: BCS) will start a U.S. online bank. (WSJ)

The Oprah Winfrey Network may never make money. (WSJ)

Europe’s banks begin to hold cash again, wary of the region’s financials. (WSJ)

Berkshire Hathaway’s (NYSE: BRK-B) B shares underperform the market so far this year. (WSJ)

Wireless carriers spend less for smartphones, which means some costs will be passed to consumers. (WSJ)

The Washington Post Company (NYSE: WPO) continues to be hurt by flagging results at its Kaplan education division. (WSJ)

The United States will sell more of its shares in AIG (NYSE: AIG). (WSJ)

Rebates that stock exchanges provide brokers may hurt returns to individual investors. (NYT)

Many companies enter the business of using mobile phones for retail payments. (NYT)

The ad prices Facebook charges customers has risen by 20% recently. (FT)

Deals by big pharma to buy smaller rivals continue to be driven by patent expirations. (FT)

Douglas A. McIntyre

Filed under: Press Digest Tagged: AIG, BCS, BRK-B, DIS, GOOG, T, WPO

Treasury To Sell More AIG Shares

247wallst — Mon, 07 May 2012 10:17:43 +0000

The US government will cut its stake in AIG (NYSE: AIG), again. It plans to take its total piece of the company down to 63%. The cost of the bailout to taxpayers have been calculated to be as high as $180 billion. Many experts expect that amount will never be recouped. However, Tim Massad, the U.S. Treasury assistant secretary for financial stability, sand “We remain hopeful that taxpayers will ultimately recover every single dollar invested in the company, which is something few would have expected during the depths of the financial crisis.” At this point, that seems unlikely based on the price of AIG’s stock.

The Federal Reserve and Treasury supported an AIG bailout in 2008 because its huge number of relationships with other financial firms would have caused catastrophic rippled through the credit system. The Treasury will sell the stock at $30.30, about 5% below where it has recently traded. AIG may buy back some of the shares on its own.

Filed under: Financial Stocks Tagged: AIG, featured

Media Digest (4/26/2012) Reuters, WSJ, FT, Bloomberg

247wallst — Thu, 26 Apr 2012 10:41:43 +0000

Markets are lifted by Fed comments that the economy is recovering and that it will keep rates low. (Reuters)

Chrysler posts its best earnings since being partially taken over by Fiat. (Reuters)

Samsung says its new Galaxy phone will use a quad-core processor. (Reuters)

Georgetown University’s Center on Education and the Workforce and researchers from Harvard find that, for the first time in decades, young people are not better-educated than the generation before them. (WSJ)

AIG (NYSE: AIG) bonds attract a large number of investors. (WSJ)

The CEO of Groupon (NASDAQ: GRPN) says the company must mature to be more successful. (WSJ)

The China’s Ministry of Industry and Information Technology says foreign companies could team with China to produce rare earths. (WSJ)

The Senate passes legislation to underwrite Post Office losses and allow it to keep current services. (WSJ)

The UK falls back into recession in the first quarter. (WSJ)

The FDA will set a new system to detect faulty medical devices. (WSJ)

The European divisions of General Motors (NYSE: GM) and Ford (NYSE: F) are likely to drag down corporate earnings. (WSJ)

US Airways (NYSE: LCC) continues a push for a buyout of American Airlines parent AMR. (WSJ)

Caterpillar (NYSE: CAT) raises forecasts. (WSJ)

Yahoo! (NASDAQ: YHOO) to launch a new program hosted by Katie Couric. (WSJ)

Formula One plans a $2.5 billion IPO in Singapore. (WSJ)

Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) each raise dividends. (FT)

French presidential candidate François Hollande wants Germany to take up new stimulus plans for Europe. (FT)

Nasdaq (NASDAQ: NDAQ) shortens a waiting period for the Facebook IPO as a way to get the social network’s listing. (Bloomberg)

Alcatel-Lucent (NYSE: ALU) posts poor earnings, which drags down its shares. (Bloomberg)

Douglas A. McIntyre

Filed under: Press Digest Tagged: AIG, ALU, CAT, CVX, F, GM, GRPN, LCC, NDAQ, XOM, YHOO

Media Digest (4/25/2012) Reuters, WSJ, NYT, FT, Bloomberg

247wallst — Wed, 25 Apr 2012 10:36:40 +0000

A judge objects to parts of an AIG (NYSE: AIG) suit to block a Bank of America (NYSE: BAC) settlement over mortgage bond sales. (Reuters)

Apple’s (NASDAQ: AAPL) earnings are better than even the highest expectations. (Reuters)

Facebook M&A activity may lengthen the time it takes to launch its IPO. (Reuters)

MasterCard (NYSE: MA) Spending Pulse reports that high gas prices have cut consumption. (Reuters)

LightSquared creditors join in an effort to get money from the troubled start-up. (Reuters)

Human Genome (NASDAQ: HGSI) will consider its options after rejection of a GlaxoSmithKline (NYSE: GSK) bid. (Reuters)

China sets an Internet crackdown after online rumors cause the central government problems. (WSJ)

Economic trouble in Europe does not hurt the returns of many U.S. manufacturers. (WSJ)

S&P cuts its outlook on India’s sovereign debt. (WSJ)

Many smaller banks cannot pay back TARP loans. (WSJ)

Google (NASDAQ: GOOG) to sell its new smartphone directly to the public. (WSJ)

If Greece breaks with current austerity measures, it may lose its membership in the eurozone. (WSJ)

India may set a $10 billion fund to supply energy to expand its economy. (WSJ)

Shutterfly (NASDAQ: SFLY) will buy Eastman Kodak’s online Kodak Gallery. (WSJ)

HTC continues to face trouble selling its phones in the U.S. (WSJ)

A study in the Academy of Management Journal shows that the mental health of job seekers improves after the shock of job losses goes away, but before they are rejected for new positions. (WSJ)

Banks attack Moody’s over potential downgrades. (WSJ)

Gas futures drop 16 cents over the past eight trading days. (WSJ)

The Securities and Exchange Commission examines whether movie studios used bribes to move into China. (NYT)

Much of Spain’s $876 billion in home mortgages are close to default, which may require bailout money to offset. (NYT)

Many top oil traders believe the price of Brent crude will stay high. (FT)

Spain lowers its central budget deficit. (Bloomberg)

Angela Merkel objects to a call from French presidential candidate Francois Hollande to move away from EU austerity plans. (Bloomberg)

Douglas A. McIntyre

Filed under: Press Digest Tagged: AAPL, AIG, BAC, GOOG, GSK, HGSI, MA, SFLY

Top Analyst Upgrades & Downgrades (AIG, RATE, CMA, CEO, CREE, DECK, FSLR, INTC, IBM, SAP, TROW, TTM, UAL)

Administrator — Wed, 18 Apr 2012 12:13:23 +0000

These are some of the top analyst upgrades, downgrades and initiations seen in Wall Street research calls this Wednesday.

American International Group Inc. (NYSE: AIG) Raised to Outperform at William Blair.

Bankrate, Inc. (NYSE: RATE) Started as Buy at SunTrust Robinson Humphrey.

Comerica Inc. (NYSE: CMA) Cut to Market Perform at BMO.

CNOOC Ltd. (NYSE: CEO) Raised to Hold at Jefferies.

Cree Inc. (NASDAQ: CREE) Cut to Hold at ThinkEquity.

Deckers Outdoor Corporation (NASDAQ: DECK) Raised to Neutral at Stern Agee.

First Solar, Inc. (NASDAQ: FSLR) Raised to Hold at Cantor Fitzgerald; Cut to Sell at Wunderlich; Maintained as Buy but cut target $40 from $50 at Argus.

Intel Corporation (NASDAQ: INTC) Maintained Outperform with $35 target and raised 2013 estimates at Credit Suisse.

International Business Machines Corporation (NYSE: IBM) Cut to Neutral at Macquarie; Raised estimates but maintained as Neutral at Credit Suisse.

SAP AG (NYSE: SAP) Reiterated Buy with $84 target at Argus.

T. Rowe Price Group (NASDAQ: TROW) named as Bull of the Day at Zacks.

Tata Motors Ltd. (NYSE: TTM) maintained as the most undervalued stock on the price-to-book versus return on equity valuation model at Credit Suisse.

United Continental Holdings, Inc. (NYSE: UAL) named as Bear of the Day at Zacks.

JON C. OGG

Filed under: Analyst Calls Tagged: AIG, CEO, CMA, CREE, DECK, FSLR, IBM, INTC, RATE, SAP, TROW, TTM, UAL