Ultimate Market Recap: HP Merger, Home Sales Slide

Wall Street Watch: Oracle Shares to Dictate Tech’s Direction, HP’s Reorg

Oracle Corp. (NASDAQ:ORCL) shares should lead the Nasdaq today. The software company earned 62 cents per share in the third quarter, an increase from 54 cents a year earlier and beating expectations. Revenue also climbed 2.2 percent to $9.04 billion.

As part of its reorganization plan, Hewlett Packard (NYSE:HPQ) will merge its PC and printing operations; the plan also includes the exit of printing leader chief V.J. Joshi as the new business unit will be led by Executive Vice President Todd Bradley. In the company’s fiscal quarter one, the divisions had poor sales numbers as they tried to deal with competing technologies.

Responding to pressure from its investors, Hartford Financial (NYSE:HIG) will leave the annuity business and explore selling a large chunk of its life insurance unit. In a press release, Hartford CEO Liam McGee said the changes will enable the company to address its property-casualty unit, which is the area that the company began in with its start more than 200 years ago.

In its monthly report, Japan’s government has said that its economy is slowly improving, painting a brighter picture than February’s report thanks to the global economy being more upbeat. Japan’s domestic demand is rising, increasing its picture of private spending for the second consecutive month and its estimate of capital spending, according to Reuters. The Cabinet Office said in the report, “The economy is still picking up slowly, while difficulties continue to prevail due to the earthquake.”

Royal Dutch Shell PLC (NYSE:RDSA) signed its first production-sharing contract with China. This will allow them to explore, develop and produce shale gas in the country, according to The Wall Street Journal. This will bode well with China’s strategy to bring in technical and operational knowledge to help develop the unused reserves of shale. Shell didn’t state the contract’s details in a statement on Tuesday.

7 Buzzing Stocks: HP Announces Merger, Oracle Jumps 2% and Apple Trades Lower

Shares of Hewlett Packard Co. (NYSE:HPQ) increased almost 1 percent before the opening bell.  The company confirmed plans to merge its personal computer business with its printer business.  “This realignment is expected to provide opportunities for cost savings and accelerate HP’s ability to pursue profitable growth and reinvest in the business,” the company said.

Apple Inc. (NASDAQ:AAPL) shares edged slightly lower Wednesday morning.  The tech giant hit a fresh all-time high yesterday of $606.90, despite reports about the new iPad running 12 degrees warmer than the iPad 2.

Oracle Corp. (NASDAQ:ORCL) shares gained about 2 percent in early morning trading.  The software company earned 62 cents per share in the third quarter, an increase from 54 cents a year earlier and beating expectations.  Revenue also climbed 2.2 percent to $9.04 billion.

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Despite downgrades, shares of The Hartford Financial Services Group Inc. (NYSE:HIG) jumped 6.7 percent in early trading.  The company announced it will leave its annuity business and weigh a sale of a large portion of its life-insurance operation.

General Mills Inc. (NYSE:GIS) shares fell .70 percent after announcing third-quarter financial results.  The food company reported a profit of $391.5 million (58 cents per share), compared to $392.1 million (59 cents per share) a year earlier.

Activision Blizzard Inc. (NASDAQ:ATVI) shares edged .56 percent higher Wednesday morning.  The video game company announced a deal with NetEase.com (NASDAQ:NTES) to renew a three year agreement to offer World of Warcraft in China.

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Oracle, ASGN, FSII, HIG, OMN Attracting Major Trading Interest Mar. 21st

Oracle Corporation (NASDAQ:ORCL): The California State University, or CSU, is currently standardizing its 23-campus system and the Chancellor’s Office on Oracle’s PeopleSoft Applications. Meanwhile, after Oracle reported stronger than expected Q3 results, Wells Fargo is confident in the company’s growth prospects and ability to execute. The firm thinks that the company’s Q4 guidance is solid and it reiterates an Outperform rating on the stock. Shares of Oracle Corporation are trading 0.86% higher today.

On Assignment, Inc. (NASDAQ:ASGN): After On Assignment agreed to buy IT staffing company Apex Systems for $600M, BMO Capital notes that the IT staffing sector has performed well, while Apex has a similar margin profile to that of On Assignment. The firm maintains an Outperform rating on On Assignment. Shares of On Assignment, Inc. are trading 29.68% higher today.

FSI International, Inc. (NASDAQ:FSII): Reported Q2 revenue $38.5M versus consensus $32.09M. Shares of FSI International, Inc. are trading 8.91% higher today.

Hartford Financial Services (NYSE:HIG): The Hartford has decided to focus on its property and casualty, group benefits and mutual funds businesses, each of which has a competitive market position, strong capital generating ability and lower sensitivity to capital markets. This sharper focus positions The Hartford to deliver superior performance and greater shareholder value. As a result, the company is placing its Individual Annuity business into runoff and is pursuing sales or other strategic alternatives for Individual Life, Woodbury Financial Services and Retirement Plans. This announcement is the result of management and the Board of Directors’ rigorous evaluation of the company’s strategy and business portfolio conducted over the past several quarters and concluded this week. The company will stop new annuity sales effective April 27 and expects to take a related after-tax charge of $15M-$20M in Q2 of 2012. This action is also expected to reduce annual run-rate operating expenses by approximately $100M, pre-tax, beginning in 2013. Starting in Q2 of 2012, financial results for the Individual Annuity segment, which consists of U.S. variable, fixed and fixed indexed annuities, will be reported in Life Other Operations. Shares of Hartford Financial Services are trading 4.79% higher today.

OMNOVA Solutions Inc. (NYSE:OMN): Reported Q1 revenue $275.9M, consensus $259.5M. Shares of OMNOVA Solutions Inc. are trading 18.02% higher today.

Verizon Battles Senate, Chevron’s Brazilian Legal Woes, BofA Breaks $10/Share

Verizon (NYSE:VZ): In a testimony submitted to a Senate antitrust panel for a hearing today, Verizon (NYSE:VZ) General Counsel Randal Milch says that the proposed $3.6B purchase of airwaves by Verizon Wireless from cable companies led by Comcast (NASDAQ:CMCSA) would not reduce competition and would solve a critical need, Bloomberg reports. Milch says customers won’t see fewer choices or increased prices as a result of the deal. Shares of Verizon are trading 0.28% higher today.

Chevron (NYSE:CVX): A spokesman for the federal prosecutors’ office in Rio de Janeiro said criminal charges against executives from Chevron (NYSE:CVX) and Transocean (NYSE:RIG) “most likely” will be put before courts there today, according to The Associated Press. A judge will then decide if the executives will face trial, which could be a lengthy process given the nature of the case and Brazil’s legal system, the report noted. Shares of  are trading 1.39% lower today.

Bank of America Corporation (NYSE:BAC): Fed Chairman Bernanke said Europe must further strengthen its banks and that its financial and economic situation “remains difficult,” according to testimony prepared for delivery to U.S. lawmakers today, reports Bloomberg. Shares of Bank of America Corporation are trading 0.46% higher today.

Markets Sour as Home Sales Slump

Markets closed mixed on Wall Street today: Dow -0.35%, S&P -0.18%, Nasdaq +0.04%, Oil +0.84%, Gold +0.19%.

On the commodities front, Oil (NYSE:USO) rose to $106.96 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,650.10 an ounce while Silver (NYSE:SLV) rose 1.04% to settle at $32.17.

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Today’s markets were mixed because:

1) Housing. The latest report on home sales dampened enthusiasm about the economy today. The National Association of Realtors reported Wednesday that fewer than expected previously-occupied homes were bought last month, prompting stocks to turn lower in early trading. The report came after government data released Tuesday showed a dip in new home construction.
Check Out: Why Did Home Sales Drop?

2) Tech. Gains in technology shares buoyed the Nasdaq, though the energy services sector weighed down markets. Zynga (NASDAQ:ZNGA) was trading higher after it announced it would buy OMGPOP, the maker of the hit game “Draw Something,” currently the most popular app in Apple’s (NASDAQ:AAPL) App Store, both for iPhones and iPads. Google (NASDAQ:GOOG) was also trading higher on news that its Chrome browser surpassed Microsoft’s (NASDAQ:MSFT) Internet Explorer in terms of users for the first time. Hewlett-Packard (NYSE:HPQ) said it was merging its printer and PC businesses in a major reorganization to save costs and boost growth. And Oracle (NASDAQ:ORCL) shares rose after the world’s No. 3 software maker beat Wall Street’s earnings estimates.
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3) Stocks. Lions Gate Entertainment (NYSE:LGF) continued to draw attention as investors bet the company would win big with the opening of “The Hunger Games” movie this Friday. General Mills (NYSE:GM) shares were down after the company noted that its margins had been squeezed during the last quarter by higher input prices. And Green Mountain (NASDAQ:GMCR) was trading higher, up more than 10 percent at close, following the announcement that Starbucks (NASDAQ:SBUX) would produce coffee for its new Keurig single-cup coffee makers.
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To contact the reporter on this story: Lindsey Grossman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com