Ultimate Market Recap: Metabolix Plummets 55%, Lions Gate to Buy Summit Entertainment
Friday Morning’s Top Stories
Shares of Shutterfly Inc. (NASDAQ:SFLY) are down almost 4 percent in late market trading. The company’s CFO, Mark Rubash, has left the company to join a medical tech company.
Diamond Foods Inc. (NASDAQ:DMND) shares fell 15 percent after the closing bell. The Department of Justice is investing the food company for possible criminal fraud associated with its accounting practices with walnut growers. Other food companies such as ConAgra Foods Inc. (NYSE:CAG) and Kraft Foods Inc. (NYSE:KFT) are flat in late trading.
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Google Inc. (NASDAQ:GOOG) is edging slightly lower after disclosing it has added VMware (NYSE:VMW) co-founder Diane Greene to its board. Shares of Apple Inc. (NASDAQ:AAPL) are slightly higher in extended trading.
Shares of Metabolix Inc. (NASDAQ:MBLX) are crashing more than 40 percent after the closing bell. The bioscience company announced that Archer Daniels Midland Co. (NYSE:ADM) has given notice to terminate its Telles, LLC joint venture for PHA bioplastics. The termination takes effect February 8, 2012.
Although shares closed almost 4 percent higher on Thursday, New York and Co. (NYSE:NWY) announced it will post a fourth quarter loss, due to a bigger-than-expected decline in same-store sales. Shares of Gap Inc. (NYSE:GPS) also closed higher, while Express Inc. (NYSE:EXPR) closed lower.
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Friday Morning Hot Stocks
Private bondholders are running out of options and may have to accept large haircuts on their Greek debt. The Greek government is ready to submit a law forcing the minority of lenders to accept terms agreed to by the majority, according to Reuters. Hedge funds including York and Marathon are taking a different approach: grabbing Greek debt at large discounts on ones set to mature in March in an effort to limit a deal. They’re hoping Troika will fold and they’ll receive full payments.
JPMorgan Chase & Co. (NYSE:JPM) earnings are out and investors are not impressed. Net income for the financial services company fell to $3.73 billion (90 cents per share) vs. $4.83 billion ($1.12 per share) a year earlier. This is a decline of 22.8% from the year earlier quarter. Revenue fell 17% to $22.2 billion from the year earlier quarter.
Apple (NASDAQ:AAPL) has stopped China sales of its iPhone 4S after customers waiting in cold temperatures overnight for the phone’s debut became aggressive in Beijing. A flagship store did not open while other stores immediately sold out of the phone. Chinese customers can still order the phone online either through Apple or China Unicom (NYSE:CHU), the country’s second largest carrier and the only official option for Chinese customers.
American Airlines (AAMRQ.PK) has a new suitor, US Airways (NYSE:LCC), who joined Delta Air Lines (NYSE:DAL) and private equity firm TPG in the bidding for the bankrupt company according to the Daily Deal. Delta could face potential problems getting a deal approved by foreign regulators because of its plans for American’s global alliances. Any deal for the airline is unlikely to happen in the short term as American needs to complete its restructuring, which could take a least a year, according to Reuters.
Eastman Kodak (NYSE:EK) is in advanced talks with Citigroup (NYSE:C) to receive financing if the troubled company files bankruptcy. Kodak is also lining up a “stalking horse” as the lead bidder for its patent portfolio if it is auctioned off due to bankruptcy, according to Bloomberg.
Earlier this week, Kodak restructured its business operations, but whether or not it was enough to boost the company’s health is unclear. The company could file for Chapter 11 by early February, according to reports.
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Friday’s Trending Stocks
Diamond Foods Inc. (NASDAQ:DMND) shares are down more than 8 percent Friday morning. The SEC and federal prosecutors are coordinating a probe to investigate the company’s accounting practices involving payments to walnut producers.
Shares of JP Morgan (NYSE:JPM) fell 3.3 percent after reporting earnings. For the fourth quarter, net income for the financial services company fell 22.8 percent to $3.73 billion (90 cents per share), compared to $4.83 billion ($1.12 per share) a year earlier. Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) are also trading lower on the news.
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Novartis (NYSE:NVS) shares are down 2.4 percent after announcing it will cut 1,960 jobs as the company restructures its U.S. business. “We recognize that the next two years will be challenging in the pharmaceuticals division,” said David Epstein, Division Head of Novartis Pharmaceuticals. “We are proactively making these changes to further focus our pipeline on the best opportunities and align our market position on our growth brands.” Shares of Bristol Myers Squibb (NYSE:BMY) and Pfizer Inc. (NYSE:PFE) are also trading lower.
Metabolix Inc. (NASDAQ:MBLX) shares are plummeting 55 percent on Friday. Archer Daniels Midland Co. (NYSE:ADM) announced late Thursday that it would end a joint venture with the maker of biodegradable plastic.
After the company’s CFO decided to leave next month, shares of Shutterfly Inc.(NASDAQ:SFLY) are falling nearly 5 percent. There is no word yet on who will replace CFO Mark Rubash.
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Markets closed down on Wall Street today: Dow -0.39%, S&P -0.49%, Nasdaq -0.51%, Oil +0.16%, Gold -0.52%.
On the commodities front, Oil (NYSE:USO) climbed to $99.26 a barrel. Precious metals were down, with Gold (NYSE:GLD) falling to $1,639.10 an ounce while Silver (NYSE:SLV) fell 1.44% to settle at $29.60.
Today’s markets were down because:
1) Downgrades. Standard & Poor’s stripped France, the euro zone’s second-largest economy, of its top credit rating on Friday, lowering it by one notch to AA+, the same rating the United States has had since the ratings company downgraded its debt in August. Though S&P has not yet issued a formal statement, French Finance Minister Francois Baroin confirmed the downgrade, which leaves Germany as the only major economy in the 17-nation euro zone with an AAA credit rating. A credit downgrade threatens to increase borrowing costs for sovereigns already weighed down by heavy debt loads and stagnating growth. Earlier reports had S&P downgrading Austria as well, but so far, no other downgrades have been confirmed.
2) Trade. The U.S. trade deficit widened in November as an increase in imports weighed on economic growth, Commerce Department data showed on Friday. Imports rose 1.3 percent as exports fell 0.9 percent. But though a wider trade deficit subtracts from gross domestic product, higher imports are a sign of increased consumer demand within the country. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose in January, suggesting a stronger consumer spending outlook consistent with the growth in imports. However, as the cooling global economy causes exports to taper off, it will soon have a negative effect on the U.S. recovery.
3) Banks. JPMorgan (NYSE:JPM) led banks stocks lower, falling as much as 3 percent after the bank announced it earned just 90 cents per share in the fourth quarter, down from $1.12 a year earlier. Citigroup (NYSE:C), Morgan Stanley (NYSE:MS), Bank of America (NYSE:BAC), and Goldman Sachs (NYSE:GS) all declined around 3 percent as well, while Wells Fargo’s (NYSE:WFC), scheduled to report earnings on Tuesday, managed to close the day only slightly in the red. Citigroup is also set to report earnings next Tuesday, while Goldman will report on Wednesday and Bank of America and Morgan Stanley will report on Thursday.
After Hours Radar Stocks
Shares of Lions Gate Entertainment Corp. (NYSE:LGF) closed 1.26 percent lower on Friday, and continue to attract attention after the closing bell. The company announced it will acquire Summit Entertainment for $412.5 million in cash and stock. Shares of Walt Disney Co. (NYSE:DIS) are ticking slightly higher in late trading.
After closing more than 10 percent lower, shares of Diamond Foods Inc. (NASDAQ:DMND) are trying to find a bottom. The company recently became a focus of a criminal probe from federal prosecutors in regards to accounting payments to walnut farmers. Shares are edging slightly higher in late Friday trading.
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DirecTV (NASDAQ:DTV) shares are lower in extended trading after the company said it has started to notify its nearly 20 million subscribers that it will be increasing rates as of February 9. Most packages will see price increases from $3 to $5. Shares of Netflix Inc. (NASDAQ:NFLX) and Dish Network (NASDAQ:DISH) are climbing higher on the news.
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