Ultimate Market Recap: Dow Breaks 12,000, Germany Faces Recession

Wednesday Morning’s Top Stories

According to the German Institute for Economic Research (known as DIW Berlin), Germany (NYSEARCA:EWG) may find itself in a recession in the upcoming months as the euro zone debt crisis affects industrial output; however, it’s not likely to be as bad as the one three years ago. The research institute added that Germany’s economy will probably shrink by 0.2 percent in the fourth quarter and may contract in the first quarter of 2012.

Ferdinand Fichtner, head of economics at DIW, said of Germany’s economic outlook, ”The euro zone crisis is having an ever-increasing effect on Germany’s economy. We therefore don’t rule out further negative growth in the first quarter of 2012.”

Don’t Miss: Euro Finance Ministers Approve Critical Greek Aid Payment.

China’s (NYSE:FXI) central bank, the People’s Bank of China, cut reserve requirements for banks by 0.5 percentage points; this will begin on December 5. This is the first cut since December 2008 and it is intended to boost liquidity and support for China’s economy during the European debt crisis.

S&P (NYSE:MHP) reviewed the credit ratings on 37 of the world’s largest banks (NYSEARCA:KBE) on Tuesday with new rating criteria and went on a cutting spree for several of them. This included U.S. banks: Bank of America (NYSE:BAC), Citigroup (NYSE:C), Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS), Wells Fargo (NYSE:WFC), J.P. Morgan (NYSE:JPM), and the Bank of New York Mellon (NYSE:BK); the Bank of China had been cut from A- to A and across the pond, UK banks including Barclays (NYSE:BCS), HSBC (NYSE:HBC), Lloyds (NYSE:LYG)and Royal Bank of Scotland (NYSE:RBS) were also slashed by the rating agency.

AT&T (NYSE:T) faced another hurdle in its proposed T-Mobile USA merger when the Federal Communications Commission (FCC) issued a scathing 109-page review of the acquisition on Tuesday. The regulator said the acquisition would limit competition in almost all U.S. cities and cause increased customer prices. The FCC’s decision to release the report came from an effort to show transparency in the proposed plan.

Investing Insight: These are the Most Popular Financial Stocks Held by Hedge Funds.

Wednesday Morning Hot Stocks

Shares of AT&T (NYSE:T) bounced 1.7% before the opening bell.  The announced early Wednesday that it will expand its current internet and voice services to multinational companies in China.  Competitors trading on the news include: Verizon(NYSE:VZ) and Sprint (NYSE:S).

Don’t Miss: AT&T and T-Mobile Withdraw Merger Application After FCC Report Undermines Deal.

Transocean (NYSE:RIG) is popping nearly 2% early Wednesday.  The oil drilling giant held a sale of 26 million shares, as the company seeks to raise funds to help refinance its acquisition of Norway rival Aker Drilling ASA.

Despite a 19% rise in profits, Jos A Bank Clothiers Inc.(NASDAQ:JOSB) is falling 5% early this morning. For the third quarter, the company reported a profit of $15 million (54 cents per share), compared to $12.6 million (45 cents per share) last year.  Competitors to watch include: The Men’s Wearhouse, Inc. (NYSE:MW) and Macy’s Inc. (NYSE:M).

Investing Insights: These are the Most Popular Financial Stocks Held by Hedge Funds.

Shares of Raytheon (NYSE:RTN) are jumping 3% this morning, after winning approval from the US Congress and the State Department to upgrade Saudi Arabia’s missile defense system for $1.7 billion.

Although a number of banks received a downgrade late Tuesday, large US banks such as Morgan Stanley (NYSE:MS), JP Morgan (NYSE:JPM), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), and Goldman Sachs (NYSE:GS) are surging after a joint effort by central banks to inject liquidity into the markets.

Don’t Miss: Here’s Why the Eurozone Solution is Fraught with Uncertainty.

Wednesday’s Trending Stocks

The Dow Jones Industrial Average is exploding higher 429 points to 11,984 and the S&P 500 Index is up 3.68% to 1,239. Here are the hottest stocks on Wall Street buzzing among traders and investors:

  1. AMR Corporation (NYSE:AMR): Shares of AMR Corporation are trading higher 49% today. AMR Corporation operates an airline that provides scheduled passenger, freight, and mail service throughout North America, the Caribbean, Latin America, Europe, and the Pacific. The Company also provides connecting service throughout the United States, Canada, and the Caribbean. In addition, AMR provides aviation services, call center management services, and investment advisory services.
  2. The Fresh Market Inc (NASDAQ:TFM): Shares of The Fresh Market Inc are trading up 1.88% today. Fresh Market, Inc. retails food. The Company operates a chain of stores that retail fresh premium perishable food items. Fresh Market operates in the southeastern, midwestern and mid-Atlantic states.
  3. Jos. A. Bank Clothiers, Inc. (NASDAQ:JOSB): Shares of Jos. A. Bank Clothiers, Inc. are trading lower 5% today. Jos. A. Bank Clothiers, Inc. manufactures classic men’s clothing. The Company sells its clothing through conventional retail stores and catalog direct marketing located throughout the United States.
  4. Zoltek Companies, Inc. (NASDAQ:ZOLT): Shares of Zoltek Companies, Inc. are trading higher 24% today. Zoltek Companies, Inc. manufactures and markets carbon fibers and develops applications for carbon fibers. The Company also develops, manufactures, and markets reinforcements, specialty resins, consumable supplies, and manufacturing equipment. In addition, Zoltek manufactures and markets acrylic fibers, nylon products, and industrial materials.
  5. Eltek Ltd. (NASDAQ:ELTK): Shares of Eltek Ltd. are trading higher 20% today. Eltek Ltd. manufactures printed circuit boards, primarily multi-layer and flexrigid boards. The Company’s products are used as the core circuitry in sophisticated and compact electronic products.
  6. BreitBurn Energy Partners L.P. (NASDAQ:BBEP): Shares of BreitBurn Energy Partners L.P. are trading flat today. BreitBurn Energy Partners L.P. is an independent oil and gas partnership focused on the acquisition, exploitation and development of oil and gas properties. The Company primarily manages its oil and gas producing properties for the purpose of generating cash flow and making distributions to its unitholders.
  7. Ralcorp Holdings, Inc. (NYSE:RAH): Shares of Ralcorp Holdings, Inc. are trading flat today. Ralcorp Holdings, Inc. produces a variety of store brand foods that are sold under the individual labels of various grocery, mass merchandise, and drug store retailers. The Company’s products include cereals, crackers and cookies, snack nuts, chocolate candy, salad dressings, mayonnaise, peanut butter, jams, syrups, and sauces. Ralcorp also holds a partial interest in Vail Resorts, Inc.
  8. American Eagle Outfitters (NYSE:AEO): Shares of American Eagle Outfitters are trading higher 4% today. American Eagle Outfitters, Inc. retails men’s and women’s casual apparel, footwear, outerwear, and accessories. The Company’s products include jeans, khakis, T-shirts, and other similar apparel. American Eagle operates in the United States.
  9. Tiffany & Co. (NYSE:TIF): Shares of Tiffany & Co. are trading flat today. Tiffany & Co. operates jewelry and specialty retail stores and designs and manufactures its products through subsidiary companies. The Company retails its products through stores and boutiques in the United States, Mexico, Canada, and Brazil, and wholesales outside the United States. Tiffany also markets through the Internet and catalogs.
  10. Piedmont Natural Gas Company Inc. (NYSE:PNY): Shares of Piedmont Natural Gas Company Inc. are trading higher 2.82% today. Piedmont Natural Gas Company, Inc. is an energy and services company that primarily transports, distributes, and sells natural gas. The Company serves residential, commercial, and industrial customers in North Carolina, South Carolina, and Tennessee. Piedmont also, through subsidiaries, markets natural gas to customers in Georgia, and distributes propane in various states.

Market Recap

Markets closed up on Wall Street today: Dow +4.23%, S&P+4.33%, Nasdaq +4.17%, Oil +0.60%, Gold +1.83%.

On the commodities front, Oil (NYSE:USO) climbed to $100.39 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,750.40 an ounce while Silver (NYSE:SLV) rose 2.94% to settle at $32.89.

Hot Feature: Pent-up Demand and Record Low Interest Rates Give Pending Home Sales a Boost

Today’s markets were up because:

1) Central banks. Stocks staged a huge rally today after the Federal Reserve and five of the world’s major central banks issued a joint statement saying that they would take coordinated steps to prevent a global liquidity crunch as the euro zone fights to end the debt crisis. The Federal Reserve said it will work with the European Central Bank, as well as the central banks of Britain, Canada, Japan, and Switzerland, to boost liquidity and support the global economy.

2) Jobs. The private sector added 206,000 jobs in November for the biggest gain since December 2010, according to the ADP National Employment Report. Figures reported Wednesday far surpassed economists’ expectations for a gain of 130,000 jobs, prompting them to raise their forecasts for Friday’s more comprehensive report from the U.S. Department of Labor, which includes both public and private sector employment.

3) Banks. Bank stocks rallied on news of the central banks’ plans as investors ignored Standard & Poor’s downgrade of big bank stocks that came Tuesday evening. Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Citigroup (NYSE:C), JPMorgan (NYSE:JPM), and Wells Fargo (NYSE:WFC) all shot up more than 7% in trading today, while Bank of America (NYSE:BAC), which hit a 52-week low on Tuesday, moved up 7.30% by closing bell.

BONUS: Euro Leaders Will Seek Greater Role for IMF and ECB in Fighting Crisis

After Hours Radar Stocks

After closing 5.44% higher, Walt Disney Co. (NYSE:DIS) continues to edge higher in late market trading.  The media and theme-park giant announced it is raising its annual dividend by 50% to 60 cents per share, compared to 40 cents per share.  The dividend boost will cost the company an extra $360 million a year.

Shares of Guess? Inc. (NYSE:GES) are down .43% after reporting third quarter earnings.  Net income for the company decreased to $66.3 million (71 cents per share), compared to $69.1 million (75 cents per share) a year earlier. This is a decline of 4% from the year earlier quarter.  Competitors include: Liz Claiborne, Inc. (NYSE:LIZ), Express, Inc.(NYSE:EXPR), and The Talbots, Inc. (NYSE:TLB).

Don’t Miss: Guess Inc. Earnings Cheat Sheet: Profit Slides Again.

Krispy Kreme Doughnuts Inc. (NYSE:KKD) is trading more than 2% lower after the closing bell, despite reporting earnings above expectations.  Net income for Krispy Kreme Doughnuts Inc. rose to $4.7 million (7 cents per share), compared to $2.4 million (3 cents per share) in the same quarter a year earlier. This marks a rise of 97.4% from the year earlier quarter.

Shares of Aeropostale Inc. (NYSE:ARO) are falling .84% after reporting third quarter results. Net income for the clothing retailer fell 58.8% to $24.1 million (30 cents per share), compared to $58.5 million (63 cents per share) last year.  Thomas P. Johnson, Chief Executive Officer, commented, “We are making incremental progress on our strategic initiatives by bringing more color and fashion to our merchandise assortment, managing our inventories appropriately and controlling our expenses carefully. However, we are not satisfied with our overall performance, and we remain cautious in our outlook.”  Competitors include: Abercrombie & Fitch Co. (NYSE:ANF), American Eagle Outfitters (NYSE:AEO), and The Gap Inc. (NYSE:GPS).

Coldwater Creek (NASDAQ:CWTR) shares are surging 11% higher after posting its sixth consecutive quarterly net loss.  The company reported a third quarter loss of $29.2 million (31 cents per share), compared to a loss of $10.9 million last year.  Analysts were expecting a loss of 33 cents per share for the quarter.

Investing Insights: Aeropostale Inc. Earnings Cheat Sheet: Margins Suffer for Five Quarters Straight, Profit Drops.