Ultimate Market Recap: Italian Debt Fears, IBM’s New Suitor, Amazon Double Take

Monday Morning’s Top Stories

German Chancellor Angela Merkel spoke on Monday and reiterated the country’s rejection of euro-zone countries to jointly issue government bonds, according to a Reuters’ story.  She also told her center-right Christian Democratic Union party that a “new Europe” needed to be created through political union and that automatic sanctions should be used for countries violating rules governing deficit and debt levels.

Merkel also reiterated her call  for financial market transaction taxes, bank levies and a short sale ban.

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During July to September, the Japanese economy (NYSE:EWJ) exceeded economists’ forecasts and grew at a 6 percent annualized rate as compared to the second quarter’s 2.1 percent contraction. This exceeds the U.S.’s 2.5 percent annualized growth during the same time period.

Exports and consumption helped Japan see a recovery from its March 11 earthquake and tsunami and grab this high growth number last seen 18 months ago.

Feeling confident about the industry amid a shaky global economy, Emirates airline ordered 50 Boeing Company (NYSE:BA) 777 jetliners at the Dubai Air Show on Sunday. The order is valued at $26 billion and comes with an option to buy 20 additional aircraft.

The private Emirates now stands as the largest operator of Boeing’s most profitable plane.

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While Bank of America (NYSE:BAC) and other major lenders (NYSEARCA:KBE) recently dropped their controversial debit card customer fees, they are still imposing other fees on the QT. According to the New York Times, Bank of America charges $5 for lost debit cards ($20 for quick delivery); U.S. Bancorp (NYSE:USB) asks $0.50 per check when depositing money via mobile phone and TD Bank (NYSE:TD) will soon charge $15 for incoming wired domestic payments.

Banks anticipate anger from customer and regulators with the fees but will say they need ways to make money on checking accounts.

Monday Morning Hot Stocks

Shares of Boeing (NYSE:BA) are up more than 3% after announcing the largest dollar-value order in its history.  Boeing has signed an $18 billion deal with Emirates to supply the airline with 50 aircrafts.

International Business Machine (NYSE:IBM) received a billionaire endorsement from Warren Buffett (NYSE:BRKA).  In an interview with CNBC, Buffett announced he has accumulated $10.7 billion  in IBM shares at an average price of $170 per share.  IBM shares are currently popping 1% before the opening bell.

J.C. Penny (NYSE:JCP) is down 3% after reporting a third quarter loss.  The company reported a loss of $143 million (67 cents per diluted share) in the quarter. The department store had net income of $44 million or 19 cents per share in the year earlier quarter.

Investing Insights: J.C. Penney Earnings Cheat Sheet: Swinging to a Loss After Two Quarters of Profit.

Intel (NASDAQ:INTC) and Mastercard (NYSE:MA) are trading lower after forming a multi-year collaboration to enhance online shopping security and payment options.  “Our goal is to enable users of Ultrabook devices and future generations of Intel-based PCs to enjoy the convenience of e-commerce while making online payments safer from malware and hackers with the advanced security capabilities of Intel Identity Protection Technology,” said George Thangadurai, general manager of Intel’s PC Client Services division.  Shares of Visa (NYSE:V) and American Express (NYSE:AXP) are also trading lower.

Despite four straight quarters of profit drops, shares of Lowe’s Companies Inc. (NYSE:LOW) are edging higher early Monday.  Net income for the home improvement store fell to $225 million (18 cents per share) vs. $404 million (29 cents per share) a year earlier. This is a decline of 44.3% from the year earlier quarter.  Competitor Home Depot (NYSE:HD) is also edging higher before the opening bell. Dig Deeper: Lowe’s Companies Inc. Earnings Cheat Sheet: Four Straight Quarters of Profit Drops.

Coca-Cola (NYSE:KO) is trading slightly lower after announcing it will invest $2 billion in India over the next five years.  The investment is aimed at capitalizing on the opportunity in the Indian non-alcoholic beverage market.  Shares of Pepsi Inc. (NYSE:PEP) are also trading lower.

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Monday’s Trending Stocks

As the Dow Jones Industrial Average trades pretty much flat around 12,109 and the S&P 500 Index at 1,255, here are today’s top stocks on Wall Street buzzing among traders:

  1. J.C. Penney Company, Inc. (NYSE:JCP): Shares of J.C. Penney Company, Inc. are trading lower today. J.C. Penney Company, Inc., through a subsidiary, operates department stores in the United States and Puerto Rico. The Company provides merchandise and services to consumers through department stores, catalog departments, and the Internet. JCPenney markets primarily family apparel, jewelry, shoes, accessories, and home furnishings.
  2. Ctrip.com International, Ltd. (NASDAQ:CTRP): Shares of Ctrip.com International, Ltd. are trading lower today. Ctrip.com International, Ltd. is a consolidator of hotel accommodations and airline tickets in China.
  3. Lowe’s Companies, Inc. (NYSE:LOW): Shares of Lowe’s Companies, Inc. are trading higher today. Lowe’s Companies, Inc. is a home improvement retailer that distributes building materials and supplies through stores in the United States. The Company offers a complete line of products and services for home decorating, maintenance, repair, remodeling, and property maintenance.
  4. Cray Inc. (NASDAQ:CRAY): Shares of Cray Inc. are trading higher today. Cray, Inc. designs, develops, manufactures, markets and services high performance computing systems commonly known as supercomputers. The Company’s products provides sustained performance on critical applications, scalability to handle larger problems and the reliability to run jobs to completion.
  5. Bluegreen Corporation (NYSE:BXG): Shares of Bluegreen Corporation are trading higher today. Bluegreen Corporation acquires, develops, markets, and sells timeshare resorts and residential land. The Company’s timeshare resorts are located in a variety of vacation destinations such as Myrtle Beach, Orlando, and Aruba. Bluegreen’s land operations are primarily located in the southeastern and southwestern United States.
  6. International Business Machines Corp. (NYSE:IBM): Shares of International Business Machines Corp. are trading flat today. International Business Machines Corporation provides computer solutions through the use of advanced information technology. The Company’s solutions include technologies, systems, products, services, software, and financing. IBM offers its products through its global sales and distribution organization, as well as through a variety of third party distributors and resellers. Get the most recent company news and stock data here >>
  7. China GrenTech Corporation Limited (NASDAQ:GRRF): Shares of China GrenTech Corporation Limited are trading higher today. China GrenTech Corporation Limited provides wireless products and services in China. The Company also develops radio frequency (NYSE:RF) technologies.
  8. The Boeing Company (NYSE:BA): Shares of The Boeing Company are trading higher today. The Boeing Company, together with its subsidiaries, develops, produces, and markets commercial jet aircraft, as well as provides related support services to the commercial airline industry worldwide. The Company also researches, develops, produces, modifies, and supports information, space, and defense systems, including military aircraft, helicopters and space and missile systems.
  9. SIGA Technologies, Inc. (NASDAQ:SIGA): Shares of SIGA Technologies, Inc. are trading lower today. SIGA Technologies, Inc. explores, develops, and markets products for use in defense against biological warfare agents. The Company’s also offers products such as novel anti-infectives or the prevention and treatment of serious infectious diseases.
  10. Piedmont Natural Gas Company Inc. (NYSE:PNY): Shares of Piedmont Natural Gas Company Inc. are trading flat 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.

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

Market Recap

Markets closed down on Wall Street today: Dow -0.61%, S&P -0.95%, Nasdaq -0.80%, Oil -0.87%, Gold -0.38%.

On the commodities front, Oil (NYSE:USO) fell to $98.13 a barrel. Precious metals also declined, with Gold (NYSE:GLD) falling to $1,781.30 an ounce while Silver (NYSE:SLV) fell 1.17% to settle at $34.28.

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Today’s markets were down because:

1) Europe. Following Friday’s big rally, markets witnessed a slight pullback today as investors grew wary of whether political transitions in Italy and Greece would be enough, in and of themselves, to effect the necessary changes to see the region through it’s sovereign debt crisis. That uncertainty led investors to reel in their enthusiasm until further developments prove the interim governments’ mettle.

2) Apple and Amazon. Apple (NASDAQ:AAPL) sold off to a 5-week low today after a bearish note from Goldman’s Bill Shope inferred that iPad demand could be a bit soft, and that a cheaper iPad could be needed to encourage price-sensitive tablet buyers. Meanwhile, though fairing poorly against the iPad in its first round of reviews, Amazon’s (NASDAQ:AMZN) Kindle Fire tablet has the benefit of being significantly cheaper than its main competition, allowing Amazon shares to move counter to market trends today. Apple closed down 1.39% while Amazon closed up 0.71%.

3) Banks. Financial stocks were under pressure, with JPMorgan (NYSE:JPM) and Bank of America (NYSE:BAC) leading the Dow’s decline, while shares of Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS), and Citigroup (NYSE:C) all fell more than 2%. 

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After Hours Radar Stocks

Shares of Reynolds American Inc (NYSE:RAI) are edging higher in late trading after the board authorized the repurchase of $2.5 billion of the company’s stock over the next 2 1/2 years.  Shares are up 18% year-to-date.

Urban Outfitters (NASDAQ:URBN) is falling more than 4% in late trading.  After the closing bell, the company reported results for the third quarter.  Net income for the apparel store fell to $50.7 million (33 cents per share), compared to $73.1 million (43 cents per share) a year earlier. This is a decline of 30.6% from the year earlier quarter.  Shares of Abercrombie & Fitch(NYSE:ANF) and American Eagle Outfitters (NYSE:AEO) are trading slightly higher.

Investing Insights: Urban Outfitters Inc. Earnings Cheat Sheet: The Profit Streak Continues.

Carlisle Cos. (NYSE:CSL) is popping more than 1% after agreeing to buy Tri-Star Electronics International Inc. for $285 million.  “Tri-Star has been consistently profitable and expands our product and service range to our customers. We remain focused on adding higher margin, highly engineered products, and from this perspective, Tri-Star is an excellent fit for Carlisle,” said Carlisle Chief Executive David A. Roberts.

Despite a downgrade by Moody’s, shares of Lowe’s (NYSE:LOW) are edging .30% higher after the close.  The ratings firm downgraded Lowe’s senior unsecured rating to A3, four notches into investment grade, from A1. The outlook is stable.  Shares of competitor Home Depot Inc (NYSE:HD) are also trading higher.

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