Ultimate Market Recap: Amazon Wins with Online Customer Service, Oil and Metals Down

Wednesday Morning’s Top Stories

After closing down almost 9 percent, shares of Computer Sciences Corp. (NYSE:CSC) continue to attract heavy attention.  The company warned it may write down a $1.5 billion contract with Britain’s National Health Service.

Shares of Morgan Stanley (NYSE:MS) are edging .20 percent higher in late trading after a report leaked that the bank plans on cutting 580 jobs in New York City.  Other financial firms such as Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C) are trading lower on the news.

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Although IPOs such as LinkedIn Corp. (NYSE:LNKD), Groupon Inc. (NASDAQ:GRPN) and Pandora Media Inc. (NYSE:P) have dominated headlines this year, other IPOs deserve some attention. Forbes recently released a list of the worst IPOs in 2011. The list contains FriendFinder Networks (FFN) with a 94% loss from its IPO. Imperial Holding (NYSE:IFT) and Kips Bay Medical (NASDAQ:KIPS) followed with losses of 83% and 79%, respectively.  Mission New Energy Limited (NASDAQ:MNEL), Sequans Communications S.A. (NYSE:SQNS), Renren (NYSE:RENN) and Tudou Holdings (NASDAQ:TUDO) also rounded out the list.

Shares of The New York Times Co. (NYSE:NYT) are jumping 1.6% in late trading. The media company announced it reached an agreement to sell its Regional Media Group to Halifax Media Holdings for $143 million in cash.

HOT FEATURE: China Cracks Down on Gold Exchanges>>

Wednesday Morning Hot Stocks

Numerous Asian electronics companies, including Sharp Corp. (SHCAY) and Samsung Electronics Co., have agreed to a$550 million-plus settlement for the alleged price-fixing of LCD screens. Consumers will receive partial refunds from a pool of $501 million and about $37 million will pay governments and other public groups for damages, according to Bloomberg.

Don’t Miss: Iran Threatens to Block Oil Flow Through Vital Strait of Hormuz in Response to U.S. Sanctions.

Italy (NYSE:EWI) has sold EUR $9 billion euros ($11.8 billion) of six-month bills, with sharply declining yields as compared to November’s auction levels, according to MarketWatch. The sale saw an average yield of 3.25 percent, a decrease from November’s 6.50 percent.

The Obama administration plans to ask Congress to raise the nation’s borrowing limit by $1.2 trillion this week, representing the third and last increase from summer’s negotiated deal. On Tuesday, treasury officials said the increase is necessary because the government will be within $100 billion of its current limit by Friday, according to CNBC.

The latest boost will increase the limit to $16.4 trillion, which officials believe should be enough for the government to continue borrowing until 2012′s end–right after the presidential election.

Investing Insights: China Cracks Down on Gold Exchanges.

The New York Times Co. (NYSE:NYT) announced that it has agreed to sell its its Regional Media Group, the owner of 16 regional newspapers and other publications, to the privately-owned Halifax Media Holdings for $143 million in cash ($150 million in post-tax proceeds).

The transaction is expected to close in the first quarter of 2012 and the net proceeds will go to general corporate purposes.

Many believed this was the year of an IPO comeback, but 2011 will end with less IPOs than in 2010. The money raised in the offerings will be approximately six percent less than last year and approximately 40 percent below 2007′s peak, reported the Wall Street Journal. For the companies with U.S. offerings, around two-thirds of them are trading below their IPO prices. LinkedIn Corp. (NYSE:LNKD), Groupon Inc. (NASDAQ:GRPN) and Pandora Media Inc. (NYSE:P) have all fallen short after hitting the public markets.

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Wednesday’s Trending Stocks

After falling 27 percent yesterday, Sears Holdings Corp. (NASDAQ:SHLD) continues to fall more than 3% early Wednesday after news of Kmart store closings. Goldman Sachs (NYSE:GS) remains bearish on shares, and also cut their price target from $43 to $30.  The bank said, “The weaker fundamentals reaffirmed our view that SHLD’s weak positioning will only be exacerbated in an uncertain environment.”

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Shares of Overstock.com (NASDAQ:OSTK) are attracting attention Wednesday morning. The company finished dead last in a survey by ForSee measuring customer satisfaction with online shoppers this holiday season. Gap Inc. (NYSE:GPS) finished second to last, and Netflix (NASDAQ:NFLX) posted the largest year-over-year decline. Amazon (NASDAQ:AMZN) was the big winner again, as its score improved from 86/100 last year to 88/100 this year.

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Shares of The New York Times Co. (NYSE:NYT) are receiving a boost this morning after a late Tuesday announcement.  The media company announced it reached an agreement to sell its Regional Media Group to Halifax media Holdings for $143 million in cash.

Apple Inc. (NASDAQ:AAPL) shares are climbing more than .40% higher this morning. After reporting that Apple will release a TV set in Q2 or Q3, Digitimes reports that Apple will finalize hardware standards for its sets by the end of Q2. Apple may also turn to Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) for assistance.

Wendy’s Company (NYSE:WEN) fell 1.3% early Wednesday. The company expects to open about 100 or more stores over the next 5 years in Japan. Other fast-food restaurants such as McDonald’s (NYSE:MCD) and Yum! Brands, Inc. (NYSE:YUM) are also trading lower.

Google Inc. (NASDAQ:GOOG) is climbing .50% after Goldman Sachs raises estimates and its price target to $685 from $660.  Goldman expects Google’s core search business has the potential to post better-than-expected fourth quarter results.

Don’t Miss: Iran Threatens to Block Oil Flow Through Vital Strait of Hormuz in Response to U.S. Sanctions.

Market Recap

During Wednesday’s market trading action, the DJIA is off over 100 points to 12,172, the S&P 500 Index is trading above 1,250 and the Nasdaq is trading at 2,598. Here are the stocks driving the Wall Street trader chatter today:

EMCORE Corporation (NASDAQ:EMKR): Shares of EMCORE Corporation are trading higher 17% today. The company delivered a wider than expected loss in its earnings report yesterday. Shares are popping heavily following yesterday’s selloff. EMCORE Corporation offers a broad portfolio of products for the broadband, fiber optic, satellite and terrestrial solar power markets. The Company’s products include optical components and systems for high-speed data and telecommunications networks, cable television, and fiber-to-the-premises applications, and products for both satellite and terrestrial power generation.

Cavium Inc (NASDAQ:CAVM): Shares of Cavium Inc are trading lower 1.9% today. The company reduced its financial guidance due to weak demand from both the enterprise and service provider markets. Cavium Networks, Inc. provides semiconductor processors that enable intelligent networking, communications and security applications. The Company offers a broad portfolio of software compatible processors and accelerator boards ranging in performance from 10 Mbps to 10 Gbps.

Sears Holdings Corporation (NASDAQ:SHLD): Shares of Sears Holdings Corporation are trading slightly lower today. Following yesterday’s plunge, Goldman Sachs remains bearish on shares, cutting their price target from $43 to $30. Sears Holdings Corporation is a broadline retailer with full-line and specialty retail stores in the United States and Canada. The Company retails home appliances, as well as tools, lawn and garden products, home electronics, and other products. Sears Holdings also provides automotive repair and maintenance.

Arctic Cat Inc. (NASDAQ:ACAT): Shares of Arctic Cat Inc. are trading higher 20% today. The company announced a cash buyback of 6.1 mln class B shares from Suzuki Motor, Arctic Cat Inc. designs, engineers, manufactures, and markets snowmobiles and all-terrain vehicles under the Arctic Cat brand name. The Company also sells personal watercraft products under the Tigershark brand name. In addition, Arctic Cat sells related parts, garments, and accessories.

Medicis Pharmaceutical Corporation (NYSE:MRX): Shares of Medicis Pharmaceutical Corporation are trading lower 2% today. The company reduced its fourth quarter earnings guidance. Medicis Pharmaceutical Corporation provides pharmaceuticals focusing on the treatment of dermatological, pediatric, and podiatric conditions, as well as aesthetics medicine. The Company has branded prescription products in therapeutic categories such as acne, asthma, eczema, fungal infections, hyperpigmentation, photoaging, psoriasis, and rosacea.

Endeavour International Corporation (NYSE:END): Shares of Endeavour International Corporation are trading higher 12% today. Rodman & Renshaw raised its rating to Outperform from Market Perform with a $12.50 target price. The analyst report issues 2012 upside on strong, oil-weighted production growth. Endeavour International Corporation is an international oil and gas exploration and production company that acquires, explores, and develops energy reserves. The Company conducts operations in the North Sea sectors of the United Kingdom and Norway. Endeavor holds license rights to a 3-D seismic dataset of the North Sea.

Noble Energy, Inc. (NYSE:NBL): Shares of Noble Energy, Inc. are trading flat today. Noble Energy, Inc. is an independent energy exploration and production company. The Company explores for and produces crude oil, natural gas, and natural gas liquids. Noble Energy operates primarily in the Rocky Mountains, Mid-continent, and deepwater Gulf of Mexico areas in the US, with key international operations offshore Israel, the North Sea and West Africa.

Whirlpool Corporation (NYSE:WHR): Shares of Whirlpool Corporation are trading flat today. The company’s shares sold off on the negative news out of retailer Sears Holdings’ store closings. Sears is a distributor of Whirlpool’s products at the retail level. Whirlpool Corporation manufactures and markets major home appliances. The Company’s principal products include laundry appliances, refrigeration and room air conditioning equipment, cooking appliances, dishwashers, and mixers and other small household appliances. Whirlpool’s products are sold worldwide

Piedmont Natural Gas Company Inc. (NYSE:PNY): Shares of Piedmont Natural Gas Company Inc. are trading off almost 1% 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.

Bank of America Corporation (NYSE:BAC): Shares of Bank of America Corporation are trading lower 3% today. Europe’s central bank reported its overnight deposits hit another record, dragging major banking stocks down today on the fearful news. Bank of America Corporation accepts deposits and offers banking, investing, asset management, and other financial and risk-management products and services. The Company has a mortgage lending subsidiary, and an investment banking and securities brokerage subsidiary.

(Note: Selected financial data are sourced from Google Finance. All data are assumed to be accurate.)

After Hours Radar Stocks

Markets closed down on Wall Street today: Dow -1.14%, S&P -1.25%, Nasdaq -1.31%, Oil -1.78%, Gold -2.55%.

On the commodities front, Oil (NYSE:USO) fell to $99.54 a barrel. Precious metals were also down, with Gold (NYSE:GLD) falling to $1,554.80 an ounce while Silver (NYSE:SLV) fell 6.02% to settle at $27.01.

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Today’s markets were down because:

1) Holidays. Trading will be light throughout the holiday week, and so far little is going on in the U.S. market, leaving investors with few economic or corporate cues. However, low trading volumes can lead to more pronounced swings that today pulled the three major indices down more than 1 percent. With little news to rock markets today, investors are instead looking at the bigger picture — the U.S. economy has shown signs of major improvement in terms of consumer spending and unemployment, but the debt crisis in Europe continues to threaten the global economic outlook, and could reverse progress made in the last quarter. 

2) Euro. European equities advanced earlier in today’s session after an Italian debt auction where short-term borrowing costs were halved, which could be a good sign for a sale of longer-dated bonds on Thursday. However, those gains were short-lived, as the euro fell to $1.2938, its lowest since January. With little else for investors to latch on to, the declining euro sparked a sell-off in early morning trading that continued throughout the day.

3) Oil. Iran has threatened to cut off access to the Strait of Hormuz, a vital artery through which one-fifth of the world’s oil supply is transported, if the U.S. follows through on planned economic sanctions meant to thwart Iran’s nuclear ambitions. The sanctions would substantially reduce Iran’s oil revenue by penalizing foreign corporations doing business with Iran’s central bank, which collects payment for most of the country’s energy exports. Oil exports finance as much as half of Iran’s budget. Iran’s response — to threaten blocking access to the strait — may have been calculated to cause a spike in oil prices, which rose above $100 a barrel shortly after the threat was issued, as a warning to American trading partners against joining the new sanctions, but that does not mean that it won’t follow through on its threat should the U.S. continue to threaten the nation’s livelihood.

BONUS: Obama to Ask Congress for $1.2 Trillion Increase in Debt Limit

To contact the reporter on this story: Stella Mariz at staff.writers@wallstcheatsheet.com

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