Ultimate Market Recap: Berlusconi Falls, Priceline Rises

Tuesday Morning’s Top Stories

Investors are waiting for the outcome of the Italian (NYSE:EWI) parliament’s afternoon budget vote. This routine action is on last year’s budget plan and comes as Italian Prime Minister Silvio Berlusconi is resisting calls to resign.

If the vote is defeated, it will most likely be followed by a confidence vote.

Don’t Miss: EU Prepares to Launch New Rescue Fund Next Month.

Toyota Motor Corp. (NYSE:TM) is the latest Japanese carmaker hit hard by the Thailand floods. The company announced in a statement today that it will discard its profit forecast and take some time to assess the financial damage from the floods.

In the second quarter ending Sept 30, Toyota’s profit declined 19 percent to YEN $80.4 billion ($1 billion), missing analysts expectations of YEN $103.5 billion.

The search for the missing MF Global Ltd (NYSE:MF) $600 million-plus money continues. The battered firm believes JP Morgan&Chase (NYSE:JPM) took longer than usual to clear transactions on its final day and this affected efforts to not only find a buyer for MF but also contributed to the missing customer money. The Commodity Futures Trading Commission and bankruptcy trustee James W. Giddens are leading the money hunt as MF customers may have to wait weeks or months to see their money again.

Trending Now: Big Banks Lose Billions On Bank Transfer Day.

Google Inc. (NASDAQ:GOOG) will continue offering its Android mobile operating system for free to the company’s handset manufacturing partners and believes its pending Motorola Mobility Holdings Inc. purchase will not affect relationships with them.

Google Executive Chairman Eric Schmidt said,

“We will run (Motorola) sufficiently independently so it will not violate the openness of Android,” Schmidt said at a news conference.

Google had announced its plans in August to buy Motorola Mobility (NYSE:MMI) for $12.5 billion, raising concerns among cellphone makers on whether the Internet search giant would treat them equally with the Android platform.

McDonald’s Corporation (NYSE:MCD) today announced global comparable sales growth of 5.5% in October. Shares are moving up on the news.

Tuesday Morning Hot Stocks

Shares of McDonald’s (NYSE:MCD) are hitting a fresh all-time high after reporting global sales at restaurants open for at least 13 months increased 5.5% in October when compared to last year.  Sales were aided by the popularity and success of its Monopoly game.  Competitors are also catching a bid this morning: Yum! Brands (NYSE:YUM), Wendy’s (NYSE:WEN), and Chipotle Mexican Grill (NYSE:CMG).

Toll Brothers (NYSE:TOL) jumped nearly 2% before the opening bell.  The company expects increased revenue and home deliveries in the fiscal fourth quarter.  The quarter’s revenue forecast is $427.7 million, which is a 6% increase from last year.

Urban Outfitters (NASDAQ:URBN) fell 2.4% in early trading after reporting a 7% decline in same-store sales for the third quarter, caused by a decline in its Anthropologie channels.  Competitors to watch: Abercrombie & Fitch (NYSE:ANF) and Gap, Inc. (NYSE:GPS).

Google (NASDAQ:GOOG) is edging higher this morning after Eric Schmidt says the tech giant will continue to offer Android operating system for free.  He also criticized Microsoft’s (NASDAQ:MSFT) litigation against cellphone makers that are using Android.  Other competitors reacting to the news include Apple (NASDAQ:AAPL) and Yahoo! (NASDAQ:YHOO).

Demand Media (NYSE:DMD) popped 7% in early trading after reporting a reduced net loss in the third quarter.  Revenue surged 25%, with adjusted earnings slightly beating estimates. “We reported another strong quarter as we continue to build Demand Media’s foundation for long-term growth,” said Richard Rosenblatt, Chairman and CEO of Demand Media. “The Company is uniquely positioned to deliver data-driven professional content through its robust content publishing platform.” Dig Deeper: Demand Media Inc. Earnings Cheat Sheet: Loss Narrows.

Priceline.com (NASDAQ:PCLN) is flying 4% higher this morning.  The company reported net income above Wall Street’s expectations for the second quarter.  Net income for the entertainment company rose to $469.5 million ($9.43 per share), compared to $223 million ($4.41 per share) in the same quarter last year. This is a more than twofold rise from the year earlier quarter.  Shares of competitor Expedia Inc. (NASDAQ:EXPE) are in the red, while Orbitz (NYSE:OWW) trades 2% higher.

Investing Insights: Priceline.com Inc. Earnings Cheat Sheet: Profit Up.

Tuesday’s Trending Stocks

As the Dow Jones Industrial Average traders above 12,000 and the S&P 500 Index is at 1,261, here are stocks that are grabbing headlines among the trading and investing community:

  1. Targacept, Inc. (NASDAQ:TRGT): Shares of Targacept , Inc. are trading lower 57% today. Targacept Inc. is a a biopharmaceutical company engaged in the design, discovery and development of a new class of drugs to treat multiple diseases and disorders of the nervous system by selectively targeting neuronal nicotinic acetylcholine receptors.
  2. McCormick & Schmick’s Seafood Restaurant (NASDAQ:MSSR): Shares of McCormick & Schmick’s Seafood Restaurant are trading higher 27% today. McCormick & Schmick’s Seafood Restaurants, Inc. operates a chain of seafood restaurants. The Company’s restaurants are located throughout the United States.
  3. Dynegy Inc. (NYSE:DYN): Shares of Dynegy Inc. are trading higher 26% today. Dynegy Inc. provides electricity to markets and customers throughout the United States. The Company’s sell electric energy, capacity and ancillary services on a wholesale basis from its power generation facilities.
  4. Fossil, Inc. (NASDAQ:FOSL): Shares of Fossil, Inc. are trading lower 4% today. Fossil, Inc. designs, develops, markets, and distributes consumer fashion accessories. The Company’s products include an extensive line of men’s and women’s fashion watches and jewelry sold under proprietary and licensed brands, handbags, small leather goods, belts, sunglasses, and apparel.
  5. Rockwell Automation (NYSE:ROK): Shares of Rockwell Automation are trading higher 7% today. Rockwell Automation, Inc. is a global provider of industrial automation power, control, and information solutions. The Company’s products include Low voltage and medium voltage electro-mechanical and electronic motor starters, motor and circuit protection devices, AC/DC variable frequency drives, contactors, push buttons, signaling devices, termination and protection devices, and relays.
  6. Activision Blizzard, Inc. (NASDAQ:ATVI): Shares of Activision Blizzard, Inc. are trading higher over 1% today. Activision Blizzard, Inc. publishes, develops, and distributes interactive entertainment software and peripheral products. The Company’s products cover diverse game categories, including action/adventure, action sports, racing, role playing, simulation, first-person action, music-based gaming and strategy.
  7. priceline.com Incorporated (NASDAQ:PCLN): Shares of priceline.com Incorporated are trading higher 6% today. Priceline.com Incorporated enables consumers to use the Internet to save money on a variety of products and services. The Company’s product allows customers to name their own price on products or services and communicates that demand directly to participating sellers or to their private databases. Participants include domestic and international airlines, and hotel chains.
  8. Opexa Therapeutics Inc. (NASDAQ:OPXA): Shares of Opexa Therapeutics Inc. are trading higher 35% today. Opexa Therapeutics, Inc. is biotechnology company. The company develops cellular therapies for the treatment of multiple sclerosis, rheumatoid arthritis, pancreatic, and cardiac conditions. Opexa holds a worldwide license for an autologous T cell vaccine for rheumatoid arthritis.
  9. International Flavors & Fragrances Inc. (NYSE:IFF): Shares of International Flavors & Fragrances Inc. are trading lower 10% today. International Flavors & Fragrances Inc. creates and manufactures flavor and fragrance products. The Company’s fragrance products are sold to manufacturers of perfumes, cosmetics, soaps and detergents, and its flavor products to manufacturers of prepared foods, beverages, dairy foods, pharmaceuticals, and confectionery products.
  10. Procera Networks, Inc. (AMEX:PKT): Shares of Procera Networks, Inc. are trading higher 16% today. Procera Networks, Inc. develops and markets hardware and software which can be applied to a range of data switching and management applications. The Company’s products enable full layer 7 packet processing to be integrated with switching and routing without degrading network speed or latency.

Market Recap

Markets closed up on Wall Street today: Dow +0.84%, S&P +1.17%, Nasdaq +1.20%, Oil +1.53%, Gold -0.35%.

On the commodities front, Oil (NYSE:USO) climbed to $96.98 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) falling to $1,784.90 an ounce while Silver (NYSE:SLV) climbed 0.38% to settle at $34.96.

Today’s markets were up because:

1) Berlusconi. After a rocky morning, markets turned upward today on reports that Italian Prime Minister Silvio Berlusconiplanned to resign, a fact Berlusconi himself confirmed in the last hour of trading. The premier said he will step down after parliament approves austerity measures pledged to European Union allies in order to secure European Central Bank purchases of Italian debt. Berlusconi’s announcement comes after his center-right coalition failed to secure an absolute majority in a crucial budget vote in the lower house, with only 308 votes in the 630-seat Chamber of Deputies, fueling demand for his resignation. 

2) Earnings. Fossil (NASDAQ:FOSL) posted third-quarter earnings results that topped Wall Street’s expectations, though simultaneously lowering its guidance for the current quarter due to the strengthening dollar. Shares of Rackspace (NYSE:RAX) advanced after the company posted better-than-expected sales late Monday, while Priceline (NASDAQ:PCLN) shares also gained on an earnings beat. 

3) Banks. Citigroup (NYSE:C), JPMorgan (NYSE:JPM), BNP Paribas, Royal Bank of Scotland (NYSE:RBS), and HSBC Holdings (NYSE:HBC) could be facing capital surcharges of 2.5 percentage points on top of Basel III capital requirements, news that had the banks trading lower before markets rallied on news of Berlusconi’s resignation. Bank of America (NYSE:BAC), Barclays (NYSE:BCS), and Deutsche Bank (NYSE:DB) may face surcharges of 2 percentage points, according to a provisional list prepared by global regulators, which has Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Bank of New York Mellon (NYSE:BK), Credit Agricole, Credit Suisse (NYSE:CS), and UBS AG (NYSE:UBS) facing surcharges of 1.5 percentage points. Wells Fargo (NYSE:WFC), Societe Generale, and Dexia SA, along with the remaining 15 banks on the list, are looking at surcharges of 1 percentage point.

BONUS: EU Prepares to Launch New Rescue Fund Next Month.

After Hours Radar Stocks

After initially jumping in extended hours, shares of Activision Blizzard (NASDAQ:ATVI) are down more than 3%.  The videogame publisher reported strong third quarter results.  Net income increased to $148 million (13 cents per share), compared to $51 million (4 cents per share) in the same quarter a year earlier. This is a more than twofold rise from the year earlier quarter.  The company also raised its forecast for the year, due to the strong demand in its new Call of Duty: Modern Warfare 3 videogame.  Competitors to watch include: Microsoft (NASDAQ:MSFT), Electronic Arts (NASDAQ:ERTS), and Take-Two Interactive (NASDAQ:TTWO).

Shares of Yahoo (NASDAQ:YHOO), Microsoft (NASDAQ:MSFT), and AOL (NYSE:AOL) are all attracting attention after the closing bell.  The three internet companies announced a new display advertising agreement aimed at using numerous technologies and scale to reach more users.  Yahoo shares jumped nearly 3%, while AOL increased by 1.8%.  Microsoft shares edged slightly lower.

Take-Two Interactive (NASDAQ:TTWO) shares are declining nearly 3% in late hours.  The company swung to a loss of $47.2 million (57 cents per share) for the fourth quarter, compared to net income of $3.3 million or (9 cents per share) last year.  Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the first quarter of the next fiscal year is 15 cents per share, a drop from 27 cents. The average estimate for the fiscal year has reached a loss of 13 cents per share, down from a loss of 2 cents ninety days ago.

Shares of Adobe Systems (NASDAQ:ADBE) are plunging more than 8% after announcing 750 job cuts.  The cuts will come mostly in North America and Europe as part of a restructuring of the company.  The company expects to post about $87 million to $94 million in pre-tax restructuring charges.  Competitors include: Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG).