U.S. stocks traded lower Tuesday as the Dow Jones Industrial Average fell 1.1% to 12411, the Standard & Poor's 500 slipped 7.3 points to 1322 and the Nasdaq Composite traded down 15 points to 2768. Among the companies whose shares are actively trading in the session are Hewlett-Packard Co. (HPQ), Wal-Mart Stores Inc. ($55.39, -$0.67, -1.20%) and TJX Co. ($52.53, -$1.78, -3.28%).
Hewlett-Packard ($36.55, -$3.25, -8.17%) warned of lower-than-expected results in its current quarter and again reduced its 2011 outlook as the tech company struggles with soft computer sales and faces further investment in its services business. The Palo Alto, Calif., company's disappointing outlook follows a leaked memo from Chief Executive Leo Apotheker in which he asked his lieutenants to cut back expenses and cautioned that the world's largest technology company by revenue is in for "another tough quarter."
Wal-Mart's ($55.39, -$0.67, -1.20%) fiscal first-quarter profit rose 3% on international strength while U.S. operations continued to struggle. Shares fell as the world's biggest retailer also saw its bottom line impacted by higher product costs and interest expenses.
TJX's ($52.53, -$1.78, -3.28%) fiscal first-quarter earnings fell 20% amid costs related to the discount retailer's winding down of its A.J. Wright stores and currency exchange impacts at its Canadian business.
Dick's Sporting Goods Inc.'s (DKS, $39.35, -$1.34, -3.29%) fiscal first-quarter earnings rose 43%, beating its prior guidance, as the retailer's margins continued to improve. But shares are trading down as sales were a bit disappointing. ThinkEquity analyst Mark Mandel says the quarter "breaks the pattern of strong momentum" for Dick's as same-store sales increased only 2.1%, about half of the company's guidance for the quarter.
Chinese Internet giant Tencent Holdings Ltd. (0700.HK) Tuesday announced it acquired a minority stake in online travel agent eLong Inc. (LONG, $25.50, +$8.54, +50.35%), in a co-investment with Expedia Inc. (EXPE, $25.30, +$0.35, +1.39%), eLong's largest shareholder.
Bank of America Merrill Lynch raised its stock-investment rating on American Electric Power Co. (AEP, $38.43, +$0.71, +1.88%) to buy from neutral following the results of the PJM auction. The much higher-than-expected capacity price will be an upward pressure on market prices in Ohio, the firm says, which should give American Electric a better negotiating position in its electric security plan proceeding.
Amgen Inc. (AMGN, $60.50, +$0.64, +1.07%) presented complete data from a study that showed its bone drug Xgeva helps prevent advanced prostate cancer from spreading to a patient's bone, though didn't change survival rates. The fresh information was Xgeva delayed pain related to the disease's spread. "We believe this finding supports Xgeva's clinical relevance in this setting, and increases the chances of approval and commercial adoption," says Cowen, which sees the market for that use at $1 billion a year.
Audiovox Corp.'s (VOXX, $7.63, +$0.44, +6.12%) fouth-quarter sales decreased year-over-year, but shares gained as the company's operating income jumped to $4.9 million, as compared to an operating loss the year prior.
Bank of America Merrill Lynch shook up its stock-investment ratings on alternative energy companies, cutting its ratings on Clean Energy (CLNE, $13.16, -$0.71, -5.12%), Cree Inc. (CREE, $39.35, -$2.04, -4.93%), EnerNOC Inc. (ENOC, $19.06, -$1.36, -6.66%) and SemiLEDs (LEDS, $10.50, -$0.26, -2.42%) to underperform from neutral, saying it likes the LED space longer term but it needs to see pricing stabilize to recommend Cree and SemiLEDs. The firm also says it believes Clean Energy's stock performance largely depends on the passage of the Natural Gas Act, which the firm gives a 50/50 likelihood of passing.
Bank of America Merrill Lynch also upgraded its stock-investment ratings on A123 Systems Inc. (AONE, $5.92, +$0.24, +4.23%) and Covanta Holding Corp. (CVA, $16.85, +$0.12, +0.72%) to buy from neutral, saying A123 is well-funded and has built substantial capacity, and that Covanta has seen improvement in waste and metals pricing, and it expects electricity pricing to move up over the next one to two years.
Ensign Group Inc. (ENSG, $28.79, +$0.89, +3.19%) said that its home health and hospice unit Cornerstone Health Inc. has acquired Symbii Home Health and Hospice. Ensign said it made the purchase with cash, and expects the transaction to boost earnings in 2011.
Robert W. Baird raised its stock-investment rating on Forward Air Corp. (FWRD, $32.51, +$0.60, +1.88%) to outperform from neutral citing the potential for earnings upside over the next several quarters as numerous catalysts develop, including firming industry rates, core operating leverage, expedited freight demand and acquisitions.
Grubb & Ellis Co.'s (GBE, $0.66, -$0.03, -4.04%) first-quarter loss narrowed despite weaker revenue as compensation costs slid and it booked some real-estate recoveries.
Home Depot Inc.'s (HD, $37.27, +$0.29, +0.78%) fiscal first-quarter profit rose 12%, topping Wall Street's views despite a surprise drop in sales though costs declined, margins rose and it bought back more than half the stock it had projected for the entire year in just the first three months.
J.M. Smucker Co. (SJM, $76.42, +$1.20, +1.60%) said it completed a $360 million acquisition of the coffee brands and business operations of Rowland Coffee Roasters Inc., a deal the food maker said will strengthen its position in the U.S. retail space.
Monro Muffler Brake Inc.'s (MNRO, $32.06, +$2.78, +9.49%) fiscal fourth-quarter earnings rose 41% as the undercar-repair and tire chain benefited from higher prices and vendor rebates. Separately, Monro on Tuesday said it agreed to acquire Vespia Tire Centers Inc., which has 24 locations in New Jersey and eastern Pennsylvania. Financial terms weren't disclosed.
Netflix Inc. (NFLX, $234.40, -$2.69, -1.13%) said it reached a multiyear deal with film distributor Miramax to stream hundreds of titles through the movie rental company's instant-viewing service. Financial terms of the deal weren't disclosed.
Argus cuts its stock-investment rating on NYSE Euronext (NYX, $34.41, -$1.32, -3.69%) to hold from buy after Nasdaq OMX (NDAQ, $26.07, -$0.16, -0.61%) and IntercontinentalExchange's (ICE, $120.86, -$1.36, -1.11%) nix their bid for the Big Board. The bottom line is that Deutsche Boerse's (DB1.XE) offer isn't as sweet for shareholders. "With Nasdaq and ICE out of the picture, it's highly unlikely that another suitor for NYX will emerge; it's also unlikely that Deutsche Boerse will increase its own offer."
O'Charley's Inc.'s (CHUX, $7.44, +$0.90, +13.76%) first-quarter results beat analysts' expectations as comparable sales and guest counts increased in all three of its restaurant concepts. The restaurant company also forecast second-quarter revenue above what the Street was estimating.
Photronics Inc. (PLAB, $8.82, +$0.82, +10.25%) swung to a loss in the fiscal second quarter because of a big hit from extinguishing debt, but the imaging-technology company's adjusted earnings jumped.
A pair of upbeat commentaries from analysts is sending shares of stem-cell company Pluristem Therapeutics Inc. (PSTI, $2.79, +$0.23, +8.95%) higher. Oppenheimer starts coverage with a stock-investment rating of outperform, noting upbeat study data. Pluristem is developing placenta-based stem-cell therapies which "can be administered to the patient immediately by the treating physician" instead of cell harvesting, processing and reinfusion. And Needham says Pluristem has enough cash to last it through 2013 and that it is "considering pharma partnerships...which may provide further capital infusion."
RailAmerica Inc.'s (RA, $15.11, -$0.87, -5.44%) carload traffic fell 2.4% in April from a year earlier, including a large drop in coal, its No. 1 commodity group, as several railroads were impaired by flooding.
Shares of TranSwitch Corp. (TXCC, $3.01, -$0.29, -8.79%) slid in after-hours trading Monday after the semiconductor maker said it would sell shares to fund general corporate purposes, including working capital.
Steel-tube maker Tenaris SA (TS, $47.13, -$0.81, -1.69%) (TEN.MI) agreed to pay about $9 million in fines in connection with allegations of bribing Uzbek officials, a substantially reduced sum that marked the first time the U.S. Securities and Exchange Commission has used its new deferred prosecution agreement to reward cooperation with its investigations.
Trina Solar Ltd.'s (TSL, $22.97, -$1.83, -7.36%) first-quarter earnings rose 7% as the Chinese solar-products maker reported soaring revenue, though margins declined. But shares traded down as the results missed analysts' expectations.
Urban Outfitters Inc.'s (URBN, $33.05, +$0.76, +2.35%) first-quarter profit fell 27% despite solid sales growth that just beat the Street consensus, while margins continued to slip.
Winn-Dixie Stores Inc.'s (WINN, $8.13, +$0.79, +10.76%) fiscal third-quarter profit climbed 12%, easily topping analysts' expectations, as the regional supermarket chain reported stronger gross margins. Analysts had expected its bottom line to drop sharply.
Hewlett-Packard ($36.55, -$3.25, -8.17%) warned of lower-than-expected results in its current quarter and again reduced its 2011 outlook as the tech company struggles with soft computer sales and faces further investment in its services business. The Palo Alto, Calif., company's disappointing outlook follows a leaked memo from Chief Executive Leo Apotheker in which he asked his lieutenants to cut back expenses and cautioned that the world's largest technology company by revenue is in for "another tough quarter."
Wal-Mart's ($55.39, -$0.67, -1.20%) fiscal first-quarter profit rose 3% on international strength while U.S. operations continued to struggle. Shares fell as the world's biggest retailer also saw its bottom line impacted by higher product costs and interest expenses.
TJX's ($52.53, -$1.78, -3.28%) fiscal first-quarter earnings fell 20% amid costs related to the discount retailer's winding down of its A.J. Wright stores and currency exchange impacts at its Canadian business.
Dick's Sporting Goods Inc.'s (DKS, $39.35, -$1.34, -3.29%) fiscal first-quarter earnings rose 43%, beating its prior guidance, as the retailer's margins continued to improve. But shares are trading down as sales were a bit disappointing. ThinkEquity analyst Mark Mandel says the quarter "breaks the pattern of strong momentum" for Dick's as same-store sales increased only 2.1%, about half of the company's guidance for the quarter.
Chinese Internet giant Tencent Holdings Ltd. (0700.HK) Tuesday announced it acquired a minority stake in online travel agent eLong Inc. (LONG, $25.50, +$8.54, +50.35%), in a co-investment with Expedia Inc. (EXPE, $25.30, +$0.35, +1.39%), eLong's largest shareholder.
Other Stocks In Focus:Akamai Technologies Inc. (AKAM, $31.88, -$1.07, -3.25%) slides to a 13-month low, putting this year's losses above 30%, as Pacific Crest says the Internet content-delivery company is seeing continued traffic-growth slowdowns, based on the investment bank's analysis. It sees traffic up 57% so far in the second quarter from a year earlier, while growth the prior two quarters had 67% and 76%, respectively.
Bank of America Merrill Lynch raised its stock-investment rating on American Electric Power Co. (AEP, $38.43, +$0.71, +1.88%) to buy from neutral following the results of the PJM auction. The much higher-than-expected capacity price will be an upward pressure on market prices in Ohio, the firm says, which should give American Electric a better negotiating position in its electric security plan proceeding.
Amgen Inc. (AMGN, $60.50, +$0.64, +1.07%) presented complete data from a study that showed its bone drug Xgeva helps prevent advanced prostate cancer from spreading to a patient's bone, though didn't change survival rates. The fresh information was Xgeva delayed pain related to the disease's spread. "We believe this finding supports Xgeva's clinical relevance in this setting, and increases the chances of approval and commercial adoption," says Cowen, which sees the market for that use at $1 billion a year.
Audiovox Corp.'s (VOXX, $7.63, +$0.44, +6.12%) fouth-quarter sales decreased year-over-year, but shares gained as the company's operating income jumped to $4.9 million, as compared to an operating loss the year prior.
Bank of America Merrill Lynch shook up its stock-investment ratings on alternative energy companies, cutting its ratings on Clean Energy (CLNE, $13.16, -$0.71, -5.12%), Cree Inc. (CREE, $39.35, -$2.04, -4.93%), EnerNOC Inc. (ENOC, $19.06, -$1.36, -6.66%) and SemiLEDs (LEDS, $10.50, -$0.26, -2.42%) to underperform from neutral, saying it likes the LED space longer term but it needs to see pricing stabilize to recommend Cree and SemiLEDs. The firm also says it believes Clean Energy's stock performance largely depends on the passage of the Natural Gas Act, which the firm gives a 50/50 likelihood of passing.
Ensign Group Inc. (ENSG, $28.79, +$0.89, +3.19%) said that its home health and hospice unit Cornerstone Health Inc. has acquired Symbii Home Health and Hospice. Ensign said it made the purchase with cash, and expects the transaction to boost earnings in 2011.
Robert W. Baird raised its stock-investment rating on Forward Air Corp. (FWRD, $32.51, +$0.60, +1.88%) to outperform from neutral citing the potential for earnings upside over the next several quarters as numerous catalysts develop, including firming industry rates, core operating leverage, expedited freight demand and acquisitions.
Grubb & Ellis Co.'s (GBE, $0.66, -$0.03, -4.04%) first-quarter loss narrowed despite weaker revenue as compensation costs slid and it booked some real-estate recoveries.
Home Depot Inc.'s (HD, $37.27, +$0.29, +0.78%) fiscal first-quarter profit rose 12%, topping Wall Street's views despite a surprise drop in sales though costs declined, margins rose and it bought back more than half the stock it had projected for the entire year in just the first three months.
J.M. Smucker Co. (SJM, $76.42, +$1.20, +1.60%) said it completed a $360 million acquisition of the coffee brands and business operations of Rowland Coffee Roasters Inc., a deal the food maker said will strengthen its position in the U.S. retail space.
Monro Muffler Brake Inc.'s (MNRO, $32.06, +$2.78, +9.49%) fiscal fourth-quarter earnings rose 41% as the undercar-repair and tire chain benefited from higher prices and vendor rebates. Separately, Monro on Tuesday said it agreed to acquire Vespia Tire Centers Inc., which has 24 locations in New Jersey and eastern Pennsylvania. Financial terms weren't disclosed.
Netflix Inc. (NFLX, $234.40, -$2.69, -1.13%) said it reached a multiyear deal with film distributor Miramax to stream hundreds of titles through the movie rental company's instant-viewing service. Financial terms of the deal weren't disclosed.
Argus cuts its stock-investment rating on NYSE Euronext (NYX, $34.41, -$1.32, -3.69%) to hold from buy after Nasdaq OMX (NDAQ, $26.07, -$0.16, -0.61%) and IntercontinentalExchange's (ICE, $120.86, -$1.36, -1.11%) nix their bid for the Big Board. The bottom line is that Deutsche Boerse's (DB1.XE) offer isn't as sweet for shareholders. "With Nasdaq and ICE out of the picture, it's highly unlikely that another suitor for NYX will emerge; it's also unlikely that Deutsche Boerse will increase its own offer."
O'Charley's Inc.'s (CHUX, $7.44, +$0.90, +13.76%) first-quarter results beat analysts' expectations as comparable sales and guest counts increased in all three of its restaurant concepts. The restaurant company also forecast second-quarter revenue above what the Street was estimating.
Photronics Inc. (PLAB, $8.82, +$0.82, +10.25%) swung to a loss in the fiscal second quarter because of a big hit from extinguishing debt, but the imaging-technology company's adjusted earnings jumped.
A pair of upbeat commentaries from analysts is sending shares of stem-cell company Pluristem Therapeutics Inc. (PSTI, $2.79, +$0.23, +8.95%) higher. Oppenheimer starts coverage with a stock-investment rating of outperform, noting upbeat study data. Pluristem is developing placenta-based stem-cell therapies which "can be administered to the patient immediately by the treating physician" instead of cell harvesting, processing and reinfusion. And Needham says Pluristem has enough cash to last it through 2013 and that it is "considering pharma partnerships...which may provide further capital infusion."
RailAmerica Inc.'s (RA, $15.11, -$0.87, -5.44%) carload traffic fell 2.4% in April from a year earlier, including a large drop in coal, its No. 1 commodity group, as several railroads were impaired by flooding.
Shares of TranSwitch Corp. (TXCC, $3.01, -$0.29, -8.79%) slid in after-hours trading Monday after the semiconductor maker said it would sell shares to fund general corporate purposes, including working capital.
Steel-tube maker Tenaris SA (TS, $47.13, -$0.81, -1.69%) (TEN.MI) agreed to pay about $9 million in fines in connection with allegations of bribing Uzbek officials, a substantially reduced sum that marked the first time the U.S. Securities and Exchange Commission has used its new deferred prosecution agreement to reward cooperation with its investigations.
Trina Solar Ltd.'s (TSL, $22.97, -$1.83, -7.36%) first-quarter earnings rose 7% as the Chinese solar-products maker reported soaring revenue, though margins declined. But shares traded down as the results missed analysts' expectations.
Urban Outfitters Inc.'s (URBN, $33.05, +$0.76, +2.35%) first-quarter profit fell 27% despite solid sales growth that just beat the Street consensus, while margins continued to slip.
Winn-Dixie Stores Inc.'s (WINN, $8.13, +$0.79, +10.76%) fiscal third-quarter profit climbed 12%, easily topping analysts' expectations, as the regional supermarket chain reported stronger gross margins. Analysts had expected its bottom line to drop sharply.
