Ultimate Market Recap: Kodak Files For Bankruptcy, Google Dips 10%
Thursday Morning’s Top Stories
After last Friday’s S&P downgrade, France (NYSEARCA:EWQ) received a strong demand and obtained lower yields in a medium-term bond (known as BTANs) auction, raising EUR 7.965 billion ($10.28 billion). Over in Spain (NYSE:EWP), which also received a downgrade, it also fared well in its auction. The country sold over EUR 6.6 in bonds ($8.46 billion) with long-term maturities of up to 10 years. The bonds’ demand exceeded estimates while yields came in line.
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Eastman Kodak (NYSE:EK) has filed for bankruptcy but it grabbed a $950 million,18-month credit facility from Citigroup (NYSE:CIT) that will allow it keep operating during Chapter 11 and pay its 17,000 workers. While the 130-year-old photographic company had been a pioneer with the hand-held camera and assisted in the first pictures from the moon, it could not find its place in modern technology and was unable to take advantage of its patented technology.
It is day two of the Greek debt-swap talks and the two sides are trying to reach a deal by week’s end. After a late evening of discussions, talks will resume today between the Greece government leaders and private creditors. Greece is looking for an agreement that will enable it to meet a March 20 debt repayment of EUR 14.5B ($18.5 billion).
Thursday’s earnings reports after the bell will include technology giants Google (NASDAQ:GOOG), IBM (NYSE:IBM), Intel (NASDAQ:INTC) and Microsoft (NASDAQ:MSFT). Google’s earnings per share is estimated to rise 16 percent to $9.03 with a 31 percent revenue increase to $8.4 billion. IBM’s numbers look like $4.62 and $29.7 billion vs. $4.18 and $29 billion.
For Intel, analysts have forecast $0.61 and $13.7 billion vs. $0.59 and $11.46 billion. Microsoft’s numbers will come in unchanged with earnings per share at $0.77 and a slight revenue increase to $21 billion from $20 billion.
Thursday Morning Hot Stocks
Shares of Eastman Kodak Co. (NYSE:EK) fell 30 percent in early trading. The iconic photo company announced it filed for Chapter 11 bankruptcy. The firm said the move “is intended to bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities, and enable the company to focus on its most valuable business lines.”
Johnson Controls Inc. (NYSE:JCI) declined almost 8 percent after saying it expects to earn 52 cents to 54 cents per share, below estimates of 70 cents by analysts.
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Morgan Stanley (NYSE:MS) shares are up 6 percent, despite posting a fourth quarter loss. The bank reported a loss of $227 million, compared to a gain of $871 million from the previous year.
BB&T Corp. (NYSE:BBT) shares edged higher this morning after reporting a jump of 88 percent in fourth quarter profits. Total revenue increased 3.3 percent to $2.41 billion, while analysts were expecting $2.2 billion.
Shares of BlackRock Inc. (NYSE:BLK) fell 1 percent after reporting a 16 percent decrease in fourth quarter profits. The company earned $555 million ($3.05 per share), compared to $657 million ($3.35 per share) in the previous year.
Investing Insights: BlackRock Inc. Earnings: Streak of Four Straight Profit Rises Snapped.
Bank of America (NYSE:BAC) shares are surging more than 6 percent. Shares are back over $7 as the bank reported better-than-expected fourth quarter results. Revenue of $25.1 billion beat estimates of $24.08 billion. Shares of JP Morgan (NYSE:JPM) are also climbing higher this morning.
Thursday’s Trending Stocks
Markets closed up on Wall Street today: Dow +0.36%, S&P +0.49%, Nasdaq +0.67%, Oil -0.04%, Gold -0.16%.
On the commodities front, Oil (NYSE:USO) fell slightly to $100.55 a barrel. Precious metals were also mixed, with Gold (NYSE:GLD) falling to $1,657.30 an ounce while Silver (NYSE:SLV) rose 0.12% to settle at $30.58.
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Today’s markets were up because:
1) Data. The government released housing, unemployment claims, and inflation figures today, delivering mixed messages about the state of the economic recovery. Initial claims for unemployment benefits fell by 50,000 last week to 352,000 — the lowest level since April 2008, but a separate report showed housing starts declined 4.1 percent in December as falling home prices and ongoing foreclosures continued to hamper an industry-wide recovery. The government’s key measure of inflation, the Consumer Price Index, showed prices to be relatively unchanged from November to December.
2) Europe. Investors will stay focused on Europe this week as Greece continues negotiations with private creditors on the size of the writedown they will accept on their sovereign debt holdings. Yesterday, news that the International Monetary Fund would seek to increase the size of its war chest helped markets rally, while Spanish and French bond auctions today drew solid demand, calming fears about Europe’s ability to fund its debt.
3) Banks. Bank of America (NYSE:BAC) led the Dow higher today after posting fourth-quarter net income of $2 billion and revenue that topped expectations. Morgan Stanley (NYSE:MS) posted a loss, but not so deep as analysts had expected, and shares spiked over 5 percent. The news helped lift Citigroup (NYSE:C) and JPMorgan (NYSE:JPM) about 1 percent after they filed disappointing results earlier this week.
CEO Laurence D. Fink of BlackRock, Inc. (NYSE:BLK), wants corporations to adopt shareholder friendly practices, according to Bloomberg. The company holds at a minimum 5% of the shares of 2,400 companies worldwide. In letters to 600 of the firm’s biggest holdings, Fink wrote that BlackRock seeks to “engage in dialogue” with management to address issues that will be raised this year at shareholder meetings.
Shares of Johnson Controls, Inc. (NYSE:JCI) are trading 8.09% lower today, with consensus of $44.03B. Johnson Controls lowers their Euro assumption to $1.30 from $1.35, having seen Europe auto production at 20.1M units, +1.5%.
Versus a consensus of $5.06B, Union Pacific Corporation (NYSE:UNP) reports Q4 revenue of $5.1B.
Shares of Morgan Stanley (NYSE:MS) are trading 4.5% higher today, as the company is rumored to be cutting senior banker and trader pay 20%-30%, according to Bloomberg. Sources with knowledge of the plan were cited.
Shares of UnitedHealth Group Inc. (NYSE:UNH) are trading 2.97% lower today, after FY12 revenue $107B-$108B vs. consensus $108B is being projected.
Shares of Knight Capital Group Inc. (NYSE:KCG) are trading 9.28% higher today, following reports of Q4 revenue $341.3M vs. consensus $312.47M. Q4 Electronic Execution Services projects revenue $40.6M vs. $37.1M. And Market Making revenue is projecting $187.4M vs. $111.0M.
Shares of 8×8, Inc. (NASDAQ:EGHT) are trading 24.11% higher today, after it was revealed that business customer churn decreased to a record low of 2.0%, compared to a churn rate of 2.2% in the same period in 2011 and 2.1% in the 2012. Ending Q3 with 27,677 business customers, 8×8 reported Q3 revenue $23.3M vs. consensus $22.09M.
After Hours Radar Stocks
Shares of Google Inc. (NASDAQ:GOOG) dropped nearly 10 percent after reporting fourth quarter earnings late Thursday. The Internet search king reported a 6 percent rise in earnings, but missed Wall Street’s expectations. Net revenue came in at $8.13 billion — analysts were expecting $8.43 billion, according to consensus estimates from FactSet Research. Shares of Yahoo! Inc. (NASDAQ:YHOO) are climbing slightly higher, while AOL Inc. (NYSE:AOL) edges lower.
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Intel Corp. (NASDAQ:INTC) shares are rising in late market trading. The chip-maker reported a fourth quarter profit of $3.4 billion (64 cents per share), compared to $3.2 billion (56 cents per share) the previous year.
Microsoft Corp. (NASDAQ:MSFT) shares jumped more than 2 percent after the closing bell. The software company reported a fiscal second quarter profit of $6.62 billion (78 cents per share), compared to $6.63 billion (77 cents per share) the previous year.
Earnings Report: Google Revenue Grows by Double Digits for Fifth Straight Quarter
International Business Machines Corp. (NYSE:IBM) is also jumping more than 2 percent in extended trading. Net earnings for the fourth quarter increased 4 percent to $4.62 per share. Analysts had expected the company to report earnings of $4.61 a share, on revenue of $29.7 billion, according to a consensus survey by FactSet Research.
Earnings Report: IBM Earnings: Profit Rises for Third Straight Quarter.
Credit card company American Express Co. (NYSE:AXP) is seeing a drop of 2 percent in late trading. Profits increased 12 percent to $1.2 billion ($1.01 per share), but revenues of $7.7 billion missed analyst expectations. Shares of Visa (NYSE:V) and MasterCard Inc. (NYSE:MA) also traded lower.
The hardest hit credit card company in late trading is Capital One Financial Corp. (NYSE:COF). Shares are down more than 5 percent. The company reported a surprise 42 percent drop in fourth quarter profit. Profit was $407 million (88 cents per share), compared to $697 million ($1.52 per share) the previous year.
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