24/7 Wall St. » HUM

Closing Bell for Monday on Wall Street: Markets Mixed at Open, Mixed at Close

Paul Ausick — Mon, 06 May 2013 20:06:49 +0000

U.S. equity markets opened mixed this morning after most of the day’s economic data was delivered in Europe. Eurozone PMI rose slightly more than expected (more coverage here) and Spain reported that it added more than 17,000 jobs (seasonally adjusted) as the country’s tourist season ramps up (more coverage here). Markets were closed in London and Japan today for a holiday. In Asia, China’s PMI came in weaker than expected. There was no significant data released in the U.S. today, so corporate earnings pushed investors along. The S&P 500 posted another new high today, as did the DJ Transportation index.

The U.S. dollar index is trading up 23% today, now at 82.313. The GSCI commodity index is up 1.4% at 631.08. WTI crude oil closed up 0.6%, at $96.16 a barrel, although we continue to look for prices to fall (more coverage here). Brent crude trades up 1.2% at $105.40 a barrel. Natural gas is down 0.7% today at about $4.01 per million BTUs. Gold settled up 0.3% today at $1,468.00.

The unofficial closing bells put the DJIA down about 4 points to 14,969.50 (-0.03%), the NASDAQ rose more than 14 points (0.42%) to 3,392.97, and the S&P 500 rose 0.19% or about 3 points to 1,617.51.

There were a several analyst upgrades and downgrades today, including:

Banco Santander (NYSE: SAN) cut to ‘sell’ at Citigroup;
Banco Bilbao Vizcaya Argentaria S.A. (NYSE: BBVA) cut to ‘sell’ at Citigroup;
Cliffs Natural Resources Inc. (NYSE: CLF) raised to ‘outperform’ at FBR Capital Markets;
Humana Inc. (NYSE: HUM) raised to ‘overweight’ at J.P. Morgan; and
YRC Worldwide Inc. (NASDAQ: YRCW) raised to ‘hold’ at BB&T Capital.

Earnings reports since markets closed last Friday resulted in some price moves today, including these as of the last half hour of trading:

Apollo Global Management LLC (NYSE: APO) is up 0.8% at $26.80 after posting a new 52-week high of $28.14 earlier today;
Bridgepoint Education Inc. (NYSE: BPi) is down 0.9% at $10.91;
Sysco Corp. (NYSE: SYY) is down 0.9% at $34.34; and
Westlake Chemical Corp. (NYSE: WLK) is up 7.9% at $88.97 (more coverage here).

Before markets open tomorrow morning we are scheduled to hear earnings reports from Anadarko Petroleum Corp. (NYSE: APC), First Solar Inc. (NASDAQ: FSLR), Plains All American Pipeline LP (NYSE: PAA) (more pipelines coverage here), Vornado Realty Trust (NYSE: VNO), Carrizo Oil & Gas Inc. (NASDAQ: CRZO), Checkpoint Systems Inc. (NYSE: CKP), DirecTV (NASDAQ: DTV), and Fossil Inc. (NASDAQ: FOSL).

Some standouts among heavily traded stocks today include:

MBIA Inc. (NYSE: MBI) is up 42.3% at $13.99. The insurer reached a settlement with Bank of America Corp. (NYSE: BAC) related to mortgage securities that went bad during the financial crisis.

Groupon Inc. (NASDAQ: GRPN) is down 6.3% at $5.47. The daily deals company is expected to miss estimates by at least one broker when it reports results on Wednesday .

Linn Energy LLC (NASDAQ: LINE) is down 6% at $35.45 after posting a new 52-week low of $34.27 earlier today. The independent oil & gas producer got a poor write-up in Barron’s magazine over the weekend.

Stay tuned for Tuesday. We have noted the following events on the schedule (all times Eastern):

11:30 a.m. – 4-week bill auction
1:00 p.m. – 3-year note auction
3:00 p.m. – Consumer credit

Filed under: Investing Tagged: APC, APO, BAC, BBVA, BPI, CKP, CLF, CRZO, DTV, FOSL, FSLR, GRPN, HUM, LINE, MBI, PAA, SAN, SYY, VNO, WLK, YRCW

Top Wall Street Analyst Upgrades: Intel, YRC, Dollar General and More

Jon C. Ogg — Mon, 06 May 2013 12:20:43 +0000

Investors and traders are constantly looking for fresh research ideas that will lead to higher income or more profits. 24/7 Wall St. reviews many fresh research calls to find great ideas from value stocks to growth stocks to dividend stocks. We are breaking out the positive analyst calls as far as stocks to buy and positive research calls today. These are some of this Monday’s top analyst upgrades, initiations and positive analyst research calls seen from Wall Street today.

Cliff’s Natural Resources Inc. (NYSE: CLF) raised to Outperform from Market Perform at FBR Capital Markets.

Dollar General Corp. (NYSE: DG) was raised to Buy from Neutral at Bank of America/Merrill Lynch.

Hanesbrands Inc. (NYSE: HBI) was initiated with an Outperform rating at Wells Fargo.

Humana Inc. (NYSE: HUM) was raised to Overweight at J.P. Morgan.

Intel Corp. (NASDAQ: INTC) was raised to Outperform from Sector Perform at RBC Capital Markets.

Knot Offshore Partners L.P. (NYSE: KNOP) saw its quiet period end. This was initiated as Buy at Bank of America/Merrill Lynch, started as Overweight at Barclays and started as Outperform at Raymond James.

Privatebancorp Inc. (NASDAQ: PVTB) was named Bull of the Day at Zacks Investment Research.

Thoratec Corp. (NASDAQ: THOR) was raised to Neutral from Underperform at Credit Suisse.

UnitedHealth Group Inc. (NYSE: UNH) was raised to Overweight at J.P. Morgan.

YRC Worldwide Inc. (NASDAQ: YRCW) was raised to Hold from Underweight at BB&T Capital.

We also have the top analyst downgrades and cautious calls for this Monday.

Filed under: Investing Tagged: CLF, DG, HBI, HUM, INTC, KNOP, PVTB, THOR, UNH, YRCW

24/7 Wall St. Closing Bell — Wednesday: Markets Cannot Shake-off Low Open and Sink to Close

Paul Ausick — Wed, 01 May 2013 20:08:40 +0000

U.S. equity markets opened lower this morning following a weaker-than-expected employment report from ADP and concern that Friday’s report from the Bureau of Labor Statistics will follow the ADP lead (more coverage here). In other U.S. data out today, the April ISM manufacturing index ready came in lower than expected and the March report on construction spending was substantially weaker than forecast (more coverage here). In Asia, China’s PMI was lower than expected and raised worries that the Asian growth is slowing down (more coverage here). Markets in China and Hong Kong were closed today for the May Day holiday. The FOMC announcement in mid-afternoon offered a slightly different view on how the Fed’s asset buying may proceed (more coverage here).

The U.S. dollar index is trading down 0.28% today, now at 81.521. The GSCI commodity index is down 0.9% at 624.44. WTI crude oil closed down 2.6%, at $91.03 a barrel, following a massive increase in commercial inventories (more coverage here). Brent crude trades down 2.4% at $99.89 a barrel, as the spread between WTI and Brent now falls below $10 a barrel (more coverage here). Natural gas is down 0.4% today at about $4.32 per million BTUs. Gold settled down 1.8% today at $1,446.20 an ounce.

The unofficial closing bells put the DJIA down about 139 points to 14,700.95 (-0.94%), the NASDAQ about 30 points (-0.89%) to 3,299.13, and the S&P 500 fell -0.93% or nearly 15 points to 1,582.70.

There were a several analyst upgrades and downgrades today, including Biogen Idec Inc. (NASDAQ: BIIB) removed from “Conviction Buy” list and cut to ‘neutral’ at Goldman Sachs; Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) raised to ‘buy’ at Nomura; Berkshire Hathaway Inc. (NYSE: BRK-A) raised to ‘buy’ at Nomura; Amgen Inc. (NASDAQ: AMGN) added to “Conviction Buy” list at Goldman Sachs; and Oil States International Inc. (NYSE: OIS) cut to ‘underperform’ at BMO Capital Markets and cut to ‘market perform’ at Raymond James.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading: Affymetrix Inc. (NASDAQ: AFFX) is down 8% at $3.35; Bankrate Inc. (NYSE: RATE) is up 14.7% at $15.46; Leap Wireless International Inc. (NASDAQ: LEAP) is down 3.2% at $5.54; Spectrum Brands Holdings Inc. (NYSE: SPB) is down 4.6% at $53.44; Trulia Inc. (NYSE: TRLA) is up 13.1% at $32.86; Vanguard Health Systems Inc. (NYSE: VHS) is down 8.3% at $13.41; ADT Corp. (NYSE: ADT) is down 6.9% at $40.65; Chesapeake Energy Corp. (NYSE: CHK) is down 2.1% at $19.14 (more coverage here); Comcast Corp. (NASDAQ: CMCSA) is up 1.2% at $41.81 (more coverage here); Humana Inc. (NYSE: HUM) is up 4.4% at $77.38; James River Coal Co. (NASDAQ: JRCC) is up 32.8% at $2.19; Mastercard Inc. (NYSE: MA) is down 2.3% at $540.47; Phillips 66 (NYSE: PSX) is down 2.1% at $59.68 (more coverage here); and Viacom Corp. (NASDAQ: VIAB) is up 3.2% at $66.01 after posting a new 52-week high of $69.00 earlier today.

Before markets open tomorrow morning we are scheduled to hear earnings reports from Archer Daniels Midland Co. (NYSE: ADM), Avis Budget Group Inc. (NASDAQ: CAR), CBS Corp. (NYSE: CBS), Facebook Inc. (NASDAQ: FB), JDS Uniphase Corp. (NASDAQ: JDSU), Las Vegas Sands Corp. (NYSE: LVS), Seagate Technology PLC (NASDAQ: STX), Tesoro Corp. (NYSE: TSO), Visa Inc. (NYSE: V), Alpha Natural Resources Inc. (NYSE: ANR), Cigna Corp. (NYSE: CI), Goldcorp Inc. (NYSE: GG), and Monster Worldwide Inc. (NYSE: MWW).

Some standouts among heavily traded stocks today include:

Advanced Micro Devices Inc. (NYSE: AMD) is up 13.1% at $3.19. The chipmaker had no big news today, although it did introduce two new microprocessors and made some pricing changes that indicate that the company’s pricing may have stabilized.

Sirius XM Radio Inc. (NASDAQ: SIRI) is up 3.4% at $3.36 after posting a new 52-week (and 5-year) high of $3.39 earlier today. The satellite radio company posted a second consecutive high today, continuing to feast off yesterday’s earnings report.

Merck & Co. (NYSE: MRK) is down 2.8% at $45.67. The drug maker slid on its lackluster earnings results and took a slice out of its sales and earnings targets for the rest of the year.

Stay tuned for Thursday. We have noted the following events on the schedule (all times Eastern):

7:30 a.m. – Challenger job-cut report
8:30 a.m. – International trade
8:30 a.m. – New claims for unemployment benefits
8:30 a.m. – Productivity and costs
10:30 a.m. – EIA weekly natural gas storage report
4:30 p.m. – Fed balance sheet and money supply

Filed under: Investing Tagged: ADM, ADT, AFFX, AMD, AMGN, ANR, BIIB, BRK-A, CAR, CBS, CHK, CI, CMCSA, FB, FCX, GG, HUM, IOS, JDSU, JRCC, LEAP, LVS, MA, MRK, MWW, PSX, RATE, SIRI, SPB, STX, TRLA, TSO, V, VHS, VIA-B

24/7 Wall St. Closing Bell — Tuesday: Markets Mixed at Open, Closes Slightly Higher

Paul Ausick — Tue, 30 Apr 2013 20:06:01 +0000

U.S. equity markets opened mixed this morning as investors weighed conflicting data from the U.S., Europe, and Asia. In Europe, retail sales declined more than expected in Germany, Italy’s unemployment rate remained unchanged at 11.5%, and eurozone inflation moderated to 1.2%, below a forecast for inflation of 1.6%. In Asia, Japanese industrial production rose less than expected, retail unexpectedly fell, and unemployment came in below expectations. In the U.S., the S&P Case-Shiller housing price index rose more than expected (more coverage here), while the Chicago PMI came in well below expectations and chilled investors for a spell this morning (more coverage here). The latest U.S. consumer confidence index came in higher than expected, which put some heat back into the morning trading session (more coverage here).

The U.S. dollar index is trading down 0.47% today, now at 81.762. The GSCI commodity index is up 1.2% at 629.99. WTI crude oil closed down 1.1%, at $93.46 a barrel, down 3.9% for the month of April. Brent crude trades down 1.6% at $102.19 a barrel. Natural gas is down 0.4% today at about $4.15 per million BTUs. Gold settled up 0.3% today at $1,472.10 an ounce, but lost 7.8% for the month, the largest drop in 16 months.

The unofficial closing bells put the DJIA up more than 20 points to 14,839.18 (0.14%), the NASDAQ rose nearly 22 points (0.66%) to 3,328.79, and the S&P 500 rose 0.24% or nearly 4 points to 1,597.45.

There were a several analyst upgrades and downgrades today, including Pandora Media Inc. (NYSE: P) initiated as ‘sector perform’ at RBC Capital Markets; Buffalo Wild Wings Inc. (NASDAQ: BWLD) cut to ‘hold’ at KeyBanc; Best Buy Co. Inc. (NYSE: BBY) raised to ‘buy’ at Deutsche Bank (more coverage here); PulteGroup Inc. (NYSE: PHM) cut to ‘neutral’ at J.P. Morgan; and SINA Corp. (NASDAQ: SINA) raised to ‘buy’ at Jefferies.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading: Embraer SA (NYSE: ERJ) is up 6.7% at $34.94; Express Scripts Holding Co. (NASDAQ: ESRX) is up 1.6% at $59.38; General Growth Properties Inc. (NYSE: GGP) is up 2.2% at $22.50 after posting a new 52-week high of $22.80 earlier today; Herbalife Ltd. (NYSE: HLF) is up 2.7% at $39.78 (more coverage here); Hertz Global Holdings Inc. (NYSE: HTZ) is up 0.2% at $24.03 after posting a new 52-week high of $24.79 earlier today; Newmont Mining Corp. (NYSE: NEM) is down 5% at $32.27 after posting a new 52-week low of $31.33 earlier today; Riverbed Technology Inc. (NASDAQ: RVBD) is up fractionally at $14.86; 3D Systems Corp. (NYSE: DDD) is up 7.3% at $38.39; Aetna Inc. (NYSE: AET) is up 2.5% at $57.55 after posting a new 52-week high of $58.63 earlier today; Anheuser-Busch InBev SA (NYSE: BUD) is up 0.3% at $95.72; Avon Products Inc. (NYSE: AVP) is up 4.5% at $23.23 after posting a new 52-week high of $24.30 earlier today; BP plc (NYSE: BP) is up 2.3% at $43.61 (more coverage here); Harvest Natural Resources Inc. (NYSE: HNR) is down 5.5% at $3.25; Marathon Petroleum Corp. (NYSE: MPC) is down 4.9% at $78.39; Office Depot Inc. (NYSE: ODP) is up 4.9% at $3.88; United States Steel Corp. (NYSE: X) is up 0.3% at $17.59; and Valero Energy Corp. (NYSE: VLO) is down 2.5% at $40.17 (more coverage here).

Before markets open tomorrow morning we are scheduled to hear earnings reports from Affymetrix Inc. (NASDAQ: AFFX), Bankrate Inc. (NYSE: RATE), Leap Wireless International Inc. (NASDAQ: LEAP), Spectrum Brands Holdings Inc. (NYSE: SPB), Trulia Inc. (NASDAQ: TRLA), Vanguard Health Systems Inc. (NYSE: VHS), ADT Corp. (NYSE: ADT), Chesapeake Energy Corp. (NYSE: CHK), Comcast Corp. (NASDAQ: CMCSA), Humana Inc. (NYSE: HUM), James River Coal Co. (NASDAQ: JRCC), Mastercard Inc. (NYSE: MA), and Viacom Corp. (NASDAQ: VIAB).

Some standouts among heavily traded stocks today include:

Sirius XM Radio Inc. (NASDAQ: SIRI) is up 5.5% at $3.24 after posting a new 52-week high of $3.25 earlier today. The satellite radio company posted good numbers and made permanent the hire of interim CEO James Meyer.

Delcath Systems Inc. (NASDAQ: DCTH) is down 39.8% at $0.84. The pharmaceutical and medical device maker will have to repeat a clinical trial.

Pitney Bowes Inc. (NYSE: PBI) is down 16.6% at $13.52. The business equipment company had a 57% drop in profits and cut its dividend.

Stay tuned for Wednesday. The Federal Open Market Committee (FOMC) concludes a two-day meeting. We have also noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
8:15 a.m. – ADP employment report
8:58 a.m. – PMI manufacturing index
10:00 a.m. – ISM manufacturing index
10:00 a.m. – Construction spending
10:30 a.m. – EIA weekly petroleum status report
2:00 p.m. – FOMC meeting announcement

Filed under: Investing Tagged: ADT, AET, AFFX, AVP, BBY, BP, BUD, BWLD, CHK, CMCSA, DCTH, DDD, ESRX, GGP, HLF, HNR, HTZ, HUM, JRCC, LEAP, MA, MPC, NEM, ODP, P, PBI, PHM, RATE, RVBD, SINA, SIRI, SPB, TRLA, VHS, VIA-B, VLO, X

Argus Makes Model Portfolio Changes (NUE, HCP, MDT, AMGN, HUM, ADI, JNPR, ELX, IPG)

Jon C. Ogg — Thu, 11 Apr 2013 12:15:46 +0000

Argus offers what is truly considered to be independent investment research. This gives the firm the lack of any or most of the traditional conflicts of interest that can be the case as far as Wall St. sell-side upgrades and downgrades are concerned. That is perhaps one of the top reasons why we give them high marks when their team of CFAs and analysts come up with research ideas.

In the Equity Income model portfolio, the firm says to add to positions in Nucor Corp. (NYSE: NUE) and in HCP Inc. (NYSE: HCP).

In the Growth & Income model portfolio, Argus said to buy Medtronic Inc. (NYSE: MDT) and Amgen Inc. (NASDAQ: AMGN). It also said to sell its positions in Humana Inc. (NYSE: HUM) and in Analog Devices Inc. (NASDAQ: ADI).

The final model portfolio changes came in the Mid-Cap Growth portfolio. Argus recommended buying a full position in Juniper Networks Inc. (NYSE: JNPR) at $17.82 and selling the full position in Emulex Corp. (NYSE: ELX), as well as selling out the position in Interpublic Group of Companies Inc. (NYSE: IPG).

Filed under: Investing Tagged: ADI, AMGN, ELX, HCP, HUM, IPG, JNPR, MDT, NUE

Top Analyst Upgrades and Downgrades (CELG, CMCSA, FB, FFIV, JPM, JNPR, KMB, NWSA, PDCE, AET, CI, HUM, UNH, WLP)

Jon C. Ogg — Fri, 05 Apr 2013 12:15:50 +0000

Investors and traders are usually on the hunt for new ideas that will generate positive returns or income. 24/7 Wall St. looks over numerous research calls to find great ideas from value stocks to growth stocks to dividend stocks. Many of these are for stocks to buy and stocks to sell, and some come from Wall St. and some come from independent research firms.

These are some of this Thursday’s top analyst upgrades, downgrades and initiations seen from select Wall St. research calls.

Celgene Corp. (NASDAQ: CELG) raised to Buy at Deutsche Bank.

Comcast Corp. (NASDAQ: CMCSA) started as Neutral at Baird.

Facebook Inc. (NASDAQ: FB) raised to Buy from Hold with $36 target at Argus.

F5 Networks Inc. (NASDAQ: FFIV) cut to Neutral at Piper Jaffray, cut to Neutral at Citigroup and cut to Market Perform at William Blair; earnings warning has shares down 17% around $75 this morning to a new 52-week low.

J.P. Morgan Chase & Co. (NYSE: JPM) raised to Overweight at Evercore.

Juniper Networks Inc. (NYSE: JNPR) cut to Equal Weight at Barclays; shares are down 5% after F5 Networks warning too.

Kimberly-Clark Corp. (NYSE: KMB) cut to Underperform at BMO Capital Markets.

News Corp. (NASDAQ: NWSA) raised to Outperform from Neutral at Credit Suisse.

PDC Energy Inc. (NASDAQ: PDCE) raised to Buy at SunTrust Robinson Humphreys; maintained Outperform but cut target to $63 from $65 at Credit Suisse.

Health care insurance stocks started in new coverage at UBS: AETNA Inc. (NYSE: AET) started as Buy, CIGNA Inc. (NYSE: CI) started as Buy, Humana Inc. (NYSE: HUM) started as Neutral, UnitedHealth Group Inc. (NYSE: UNH) started as Buy and WellPoint Inc. (NYSE: WLP) started as Neutral.

Filed under: Healthcare (Business) Tagged: AET, CELG, CI, CMCSA, FB, FFIV, HUM, JNPR, JPM, KMB, NWSA, PDCE, UNH, WLP

What Medicare Reimbursement Increases Really Mean (AET, CI, HUM, UNH, WLP, UAM)

Lee Jackson — Wed, 03 Apr 2013 11:45:28 +0000

After promising voters that the Affordable Healthcare Act (aka Obamacare), and other health care initiatives designed by the current administration would not result in any increase in costs for citizens, just the opposite is starting to emerge. The American Action Forum in Washington issued a report last week that points out that Obamacare has so far cost $30.8 billion and 111.4 million hours to complete paperwork to individuals, health care institutions and small businesses.

Regarding an increase in premiums, the organization surveyed health care costs in five major U.S. cities: Atlanta, Austin, Chicago, Phoenix and Milwaukee. The results, to say the least, are sobering. Young and healthier individuals, including small employers, can expect a 169 percent premium increase, averaged across the five cities, the report concluded. Consumers in Milwaukee could experience the greatest sticker shock, with an estimated 190 percent increase in 2014.

Yesterday, in a stunning and unexpected move, the Centers for Medicare and Medicaid Services (CMS) announced a 2.96% increase in the Medicare Advantage (MA) per capita growth rates for 2014. The headline news was that Secretary of Housing and Human Services (HHS) Kathleen Sebelius reversed the long-standing policy to include the sustainable growth rate (SGR) formula in the following year’s per capita growth rate calculation. Now the department will assume that Congress will pass the SGR fix at some point prior to January 1, 2014, thus averting the scheduled 25% cut to physician payments. The bottom line is that too many physicians were ready to leave the Medicare business, and somebody has to pay to keep them in the game.

A full press lobbying effort was used to overturn what the industry and some other observers saw as draconian government cuts that were expected to be in the 2.2% range. Also included in the decision was a CMS ruling that will allow total member cost sharing of $34 per member, per month (PMPM), up from the current $30. Not a gigantic increase, but one consumers will pay. The ultimate winners are the stocks in the managed care industry.

Year to date, health care and equipment services is one of the top performing market sectors, up more than 12% through the first quarter. The question for investors is which stocks will benefit the most? The answer, according to the market’s response, is the top diversified managed care organizations and other assorted industry niche players. Top names rallied sharply yesterday on the news.

Aetna Inc. (NYSE: AET) was up 3.67% yesterday, closing at $54.33. Cigna Corp. (NYSE: CI) rose 2.92% to close at $64.75. Humana Inc (NYSE: HUM), which is a large Medicare provider, was up a whopping 5.47% to close at $79.12. UnitedHealth Group Inc. (NYSE: UNH), one of the nation’s largest providers of business health plans, rose 2.77% to close at $61.74 . WellPoint Inc. (NYSE: WLP) was up 1.50% and closed at $68.46. Speciality health and life insurance company, Universal American Corp. (NYSE: UAM), which focuses almost exclusively on Medicare services, was the day’s big winner. Universal American ended the day 8.29% higher, to close at $9.40. Profit takers cut many of the stocks gains in half by the end of the day.

There was one very interesting component that we thought our readers would find interesting. In an almost unprecedented move, HHS Secretary Sebelius overruled the “professional judgement” of the CMS actuary in obtaining the rate increases that rallied the stocks.

In another move that the administration must have shuddered at, Secretary Sebelius suggested just last week that Obamacare would cause higher premiums for some in the individual insurance market. While Sebelius tried to smooth out the prediction saying that the hikes involved would be “slight,” insurance industry representatives and research data have suggested otherwise.

Stock market investing always has rewarded the savvy stock picker who anticipated an event that sends the price of their chosen stocks higher. In the case of the managed care stocks, the CMS rate increase did that trick. Affordable health care is not looking like what was sold at the ballot box. The spiraling costs of health care coming down the road are in a book the size of a New York city phone book, and it really looks like those politicians that signed it neglected to even read it.

Filed under: Politics Tagged: AET, CI, HUM, UAM, UNH, WLP

Proposed 2014 Medicare Rates Slam Humana and Other Insurers

Jon C. Ogg — Tue, 19 Feb 2013 14:00:54 +0000

Humana Inc. (NYSE: HUM) is leading the large health insurance providers lower as the week gets off to a start. The news hit going into the weekend that the Centers for Medicare and Medicaid Services Ruling has been announced for preliminary 2014 Medicare Advantage benchmark payment rates. The long and short of the matter is that Humana sees a mid-single-digit decline in its benchmark monthly rate.

While shares are being hit hard this morning, investors should know that the Centers for Medicare and Medicaid Services has invited public comment on these preliminary rates before releasing final rates on April 1, 2013. This is the equivalent of an appeal period in a legal case, although that appeal period also can be commented on by noninsurance parties as well.

The SEC filing on Tuesday said:

In the Company’s earnings release call for the fourth quarter of 2012 held on February 4, 2013, management expressed confidence in the Company’s ability to grow both Medicare membership and earnings for 2014, based upon management’s stated expectation that the base Medicare Advantage payment rate would be flat to slightly down. The Company believes the preliminary base rates included in the CMS notice would result in a mid-single-digit decline in its benchmark payment rates (excluding the impact of the industry premium tax, county rebasing and risk factor recalibration – which are anticipated to be discussed in the final rate notice). Therefore, Humana is closely analyzing all operational avenues available to address those preliminary rates and the related impact upon the Company’s ability to grow both its Medicare membership and its earnings for 2014.

At its core, this is one more incidence of where the health care business is going to remain subject to mandated government pricing. Consumers will love this, right up until they realize that the services and reimbursements and a slew of other things they count on from their insurance provider do not get handled the same with lower and lower prices for the insurers to make profits.

Humana shares are lower by 8.8% in premarket trading, at $71.10 against a 52-week range of $59.92 to $93.36. As you will see, what is bad for one health insurer is generally deemed to be bad for the others as well:

UnitedHealth Group Inc. (NYSE: UNH) is down 5.7%, at $54.00 against a 52-week range of $50.32 to $60.75.
WellPoint Inc. (NYSE: WLP) is down 4.3%, at $60.00 against a 52-week range of $52.52 to $74.73.
Aetna Inc. (NYSE: AET) is down 3.5%, at $47.48 against a 52-week range of $34.58 to $51.14.
Cigna Corp. (NYSE: CI) is down 3.5%, at $58.90 against a 52-week range of $39.01 to $62.22.

Filed under: Healthcare (Business) Tagged: AET, CI, HUM, UNH, WLP

24/7 Wall St. Closing Bell — February 5, 2013: Markets Recover from Yesterday’s Slump (CLWR, M, SWC, DRI, UNH, CYOU, GCI, HUM, GOLD, RCL, SPG, CLX, APC, BIDU, EW, YUM, AGCO, AGN, ACI, ADM, ARMH, BP, ETN, EL, SIRI, K, CMG, EXPE, GNW, TTWO, DIS, ZNGA, CVS, MRO, NUS, RL, SYT, TWX, DELL, OPXA, MHP)

Paul Ausick — Tue, 05 Feb 2013 21:04:01 +0000

U.S. equity markets opened higher this morning and maintained their upward momentum for essentially the whole day. Lacking any really bad news from Asia or Europe, U.S. markets shrugged off a weaker than expected ISM non-manufacturing PMI number (more coverage here) and focussed instead on a generally upbeat day in European markets. In Asia, China’s PMI came in better than expected and Australia’s central bank left its key interest rate unchanged. In Europe, eurozone non-manufacturing PMI came in slightly better than expected. After yesterday’s worst session of the year so far, today’s trading seems positively sprightly.

The U.S. dollar index fell 0.02% today, now at 79.536. The GSCI commodity index is down 0.8% at 673.87, with commodities prices mixed again today. WTI crude oil closed up 0.5% today, at $96.64 a barrel. Brent crude trades up 0.8% at $116.54 a barrel. Natural gas is up 2.7% today at about $3.40 per million BTUs. Gold settled down 0.2% today at $1,673.50 an ounce.

The unofficial closing bells put the DJIA up more than 98 points to 13,978.53 (0.71%), the NASDAQ rose more than 40 points (1.29%) to 3,171.59, and the S&P 500 rose 1.04% or nearly 16 points to 1,511.26.

There were a several analyst upgrades and downgrades today, including Clearwire Corp. (NASDAQ: CLWR) cut to ‘underperform’ at D.A. Davidson; Macy’s Inc. (NYSE: M) raised to ‘buy’ at Citigroup; Stillwater Mining Co. (NYSE: SWC) raised to ‘overweight’ at J.P. Morgan (more platinum coverage here); D.R. Horton Inc. (NYSE: DRI) raised to ‘overweight’ at Barclays; and UnitedHealth Group Inc. (NYSE: UNH) raised to Conviction Buy List at Goldman Sachs.

Earnings reports since markets closed last night resulted in several price moves today, including these: Anadarko Petroleum Co. (NYSE: APC) is up 3.3% at $83.15; Baidu Inc. (NASDAQ: BIDU) is down 10.4% at $96.06; Edwards Lifesciences Corp. (NYSE: EW) is down 6.7% at $86.79; Yum! Brands Inc. (NYSE: YUM) is down 2.8% at $62.15 (more coverage here); AGCO Corp. (NYSE: AGCO) is up 2.1% at $53.62; Allergan Inc. (NYSE: AGN) is up 1.6% at $106.75; Archer Daniels Midland Co. (NYSE: ADM) is up 3.4% at $29.42 (more coverage here); ARM Holdings plc (NASDAQ: ARMH) is up 4.3% at $43.76 after posting a new 52-week high of $44.00 earlier today (more coverage here); BP plc (NYSE: BP) is up 1.5% at $44.26 (more coverage here); Eaton Corp. (NYSE: ETN) is up 5.1% at $59.45 after posting a new 52-week high of $60.45 earlier today; Estee Lauder Companies Inc. (NYSE: EL) is up 6.1% at $64.79; Sirius XM Radio Inc. (NASDAQ: SIRI) is down 0.5% at $3.15; and Kellogg Inc. (NYSE: K) is up 0.8% at $58.55 after posting a new 52-week high of $59.30 earlier today.

After markets close today and before they open tomorrow morning we are scheduled to hear from Chipotle Mexican Grill Inc. (NYSE: CMG), Expedia Inc. (NASDAQ: EXPE), Genworth Financial Inc. (NYSE: GNW), Take-Two Interactive Software Inc. (NASDAQ: TTWO), Walt Disney Co. (NYSE: DIS), Zynga Inc. (NASDAQ: ZNGA), CVS Caremark Corp. (NYSE: CVS), Marathon Oil Corp. (NYSE: MRO), Nu Skin Enterprises Inc. (NYSE: NUS), Ralph Lauren Corp. (NYSE: RL), Syngenta AG (NYSE: SYT), and Time Warner Inc. (NYSE: TWX).

Some standouts from today include the following stocks:

Dell Inc. (NASDAQ: DELL) is up 1.3% at $13.45. The PC maker has agreed to be taken private in a deal worth more than $24 billion. More coverage here.

Arch Coal Inc. (NYSE: ACI) is down 12.4% at $6.07. The coal miner badly missed estimates this morning and the outlook for the first half of this year is not encouraging. More coverage here.

Opexa Therapeutics Inc. (NASDAQ: OPXA) is up 162.8% at $3.18. The biopharma company has struck a deal with Germany’s Merck related to Opexa’s treatment for multiple sclerosis. More coverage here.

The McGraw-Hill Companies (NYSE: MHP) is down 11.5% at $44.52. The financial information firm continued to get battered today as the U.S. Department of Justice announced charges against its S&P ratings agency for failure properly to let investors know the value of subprime mortgage bonds back in 2008.

Stay tuned for Wednesday. We have also noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
10:30 a.m. – EIA weekly petroleum status report
3:00 p.m. – Treasury STRIPS

Filed under: Investing Tagged: ACI, ADM, AGCO, AGN, APC, ARMH, BIDU, BP, CLWR, CLX, CMG, CVS, CYOU, DELL, DIS, DRI, EL, ETN, EW, EXPE, GCI, GNW, gold, HUM, K, M, MHP, MRO, NUS, OPXA, RCL, RL, SIRI, SPG, SWC, SYT, TTWO, TWX, UNH, YUM, ZNGA

24/7 Wall St. Closing Bell — February 4, 2013: Markets Slump on Europe Mess (YHOO, MRK, GOOG, CVX, BRCM, CYOU, GCI, HUM, GOLD, RCL, SPG, CLX, APC, BIDU, EW, YUM, AGCO, AGN, ACI, ADM, ARMH, BP, ETN, EL, K, SIRI, BBRY, APKT, ORCL, MHP)

Paul Ausick — Mon, 04 Feb 2013 21:06:57 +0000

U.S. equity markets opened lower this morning as concerns about European markets reared up again. The U.K.’s PMI came in lower than expected and consumer confidence was lower, sending equities markets on the continent lower. Several Italian banks are being investigated for derivatives deals and a scandal in Spain also heated up over the weekend. In Asia, China reported a slightly higher-than-expected non-manufacturing PMI number (more coverage here). In the U.S., factory orders were up, but by less than expected (more coverage here). Earnings reports were scarce, so there wasn’t much for investors to take positive direction from.

The U.S. dollar index rose 0.5% today, now at 79.552. The GSCI commodity index is up 0.6% at 679.05, with commodities prices mixed today. WTI crude oil closed down 1.6% today, at $96.17 a barrel. Brent crude trades down 1% at $115.58 a barrel. Natural gas is up 0.5% today at about $3.32 per million BTUs. Gold settled up 0.4% today at $1,676.40 an ounce (more gold coverage here).

The unofficial closing bells put the DJIA down nearly 130 points to 13,880.08 (-0.93%), the NASDAQ fell about 48 points (-1.51%) to 3,131.17, and the S&P 500 fell -1.15% or more than 17 points to 1,495.72.

There were a several analyst upgrades and downgrades today, including Yahoo! Inc. (NASDAQ: YHOO) raised to ‘buy’ at Stifel Nicolaus; Merck & Co. (NYSE: MRK) cut to ‘underweight’ at Morgan Stanley; Google Inc. (NASDAQ: GOOG) cut to ‘market perform’ at BMO; Chevron Corp. (NYSE: CVX) cut to ‘neutral’ at UBS; and Broadcom Corp. (NASDAQ: BRCM) reiterated as ‘buy’ with a $46 price target at Argus.

Earnings reports since markets closed last night resulted in several price moves today, including these: Changyou.com Ltd. (NASDAQ: CYOU) is down 9.5% at $28.34; Gannett Co. Inc. (NYSE: GCI) is 6.1% at $18.64; Humana Inc. (NYSE: HUM) is up 4.5% at $78.76 (more coverage here); Randgold Resources Ltd. (NASDAQ: GOLD) is up 2.7% at $98.24 (more coverage here); Royal Caribbean Cruises Ltd. (NYSE: RCL) is down 3.8% at $35.41 (more coverage here); Simon Property Group Inc. (NYSE: SPG) is up 0.1% at $162.18; and The Clorox Co. (NYSE: CLX) is up 0.8% at $79.81 after posting a new 52-week high of $80.68.

After markets close today and before they open tomorrow morning we are scheduled to hear from Anadarko Petroleum Co. (NYSE: APC), Baidu Inc. (NASDAQ: BIDU), Edwards Lifesciences Corp. (NYSE: EW), Yum! Brands Inc. (NYSE: YUM), AGCO Corp. (NASDAQ: AGCO), Allergan Inc. (NYSE: AGN), Arch Coal Inc. (NYSE: ACI), Archer Daniels Midland Co. (NYSE: ADM), ARM Holdings plc (NASDAQ: ARMH), BP plc (NYSE: BP), Eaton Corp. (NYSE: ETN), Estee Lauder Companies Inc. (NYSE: EL), Sirius XM Radio Inc. (NASDAQ: SIRI), and Kellogg Inc. (NYSE: K).

Some standouts from today include the following stocks:

BlackBerry (NASDAQ: BBRY) is up 13.9% at $14.84. The smartphone maker, formerly known as Research in Motion, got a boost today from a report of good opening weekend sales in the U.K.. More coverage here.

Acme Packet Inc. (NASDAQ: APKT) is up 23.4% at $29.53. The networking firm is being acquired by Oracle Corp. for $1.7 billion. More coverage here.

The McGraw-Hill Companies (NYSE: MHP) is down 13.4% at $50.50. The financial information firm is getting hammered following a report that its S&P ratings agency may be investigated for its failure properly to let investors know the value of subprime mortgage bonds back in 2008. More coverage here. The company denies the any wrongdoing. More coverage here.

Stay tuned for Tuesday. Fed Governor Elizabeth Duke is giving a speech. We have also noted the following events on the schedule (all times Eastern):

10:00 a.m. – Institute for Supply Management non-manufacturing index
11:30 a.m. – 4- and 52-week Treasury bill auctions

Filed under: Investing Tagged: ACI, ADM, AGCO, AGN, APC, APKT, ARMH, BBRY, BIDU, BP, BRCM, CLX, CVX, CYOU, EL, ETN, EW, GCI, gold, GOOG, HUM, K, MHP, MRK, ORCL, RCL, SIRI, SPG, YHOO, YUM