Ultimate Market Recap: Urban Outfitters Plummets 15%, Apple CEO Tim Cook’s Payday
Tuesday Morning’s Top Stories
China’s (NYSE:FXI) trade surplus sharply expanded in December to $16.52 billion, surpassing expectations of $7.8 billion, according to the General Administration of Customs. Exports stayed strong, rising to 13.4 percent from the previous year after increasing to 13.8 percent in November. This beat estimates of a 12.5 percent rise. Imports didn’t fare as well. They rose 11.8 percent in December but came in lower than an 18 percent estimate and down from November’s 22.1 percent increase. Full-year numbers did see a narrowing trend for the Chinese trade gap.
Investing Insights: Alcoa Reports First Earnings Loss Since 2009.
Fitch Rating’s Head of Global Sovereign Ratings David Riley sees a significant chance for Italy (NYSE:EWI) to receive a downgrade “in the absence of a credible financial firewall in Europe” reported MarketWatch. Speaking at Fitch’s European Credit Outlook conference, Riley added that Italy is “front line of the crisis” and that the euro’s future “would be decided at the gates of Rome.” Fitch also said that the euro zone will not break up and that the agency doesn’t see a collapse of the monetary union.
MF Global’s Treasurer Edith O’Brien, who is a “person of interest” and is key to the ongoing search for the missing client money, is allegedly refusing to meet with the investigators. She has asked for immunity from prosecution, according to The New York Times. O’Brien has frequently testified as an expert in the protection of customer funds at futures firms at the Commodities Futures Trading Commission.
Apple Inc. (NASDAQ:AAPL) Chief Executive Tim Cook received compensation close to $378 million in 2011, widely exceeding former CEO Steve Job’s $1 annual salary. Cook’s pay was primarily comprised of a grant of restricted stock, which has been implemented to keep the CEO while the stock vests for the next 10 years.
Don’t Miss: Gold Market Giving Off Mixed Signals.
Tuesday Morning Hot Stocks
Alcoa Inc. (NYSE:AA) shares are jumping more than 3 percent early Tuesday morning. The company reported fourth quarter results late Monday. After restructuring and other special items costs, the loss from continuing operations was $34 million ($0.03 per share). Looking at revenue, Alcoa reported a fourth quarter revenue of $6 billion, a 7 percent drop from the $6.4 billion in the previous quarter but a 6 percent increase from the fourth quarter’s 2010 $5.7 billion revenue.
Investing Insights: Alcoa Reports First Earnings Loss Since 2009.
Shares of Tiffany and Co. (NYSE:TIF) were crushed 9.5 percent after cutting its full year forecast. “After achieving very strong and better-than-expected sales and earnings growth in the first three quarters of 2011, sales weakened markedly in the United States and Europe during the holiday season, reflecting restrained spending by consumers for fine jewelry,” said Chief Executive Michael J. Kowalski.
WebMD Health Corp. (NASDAQ:WBMD) plummeted more than 30 percent this morning after ending merger talks. Wayne Gattinella has also resigned as president and chief executive officer. WebMD said it expects 2012 revenue may decline 2% to 8% compared to 2011 revenue.
Lululemon Athletica Inc. (NASDAQ:LULU) is surging almost 13 percent after the opening bell. The company announced it expects fourth quarter profit and revenue to be higher than expected. Revenue is seen between expectations of $327 million to $332 million and well ahead of $245 million in the fourth quarter a year ago. Shares of Nike Inc. (NYSE:NKE) and Under Armour (NYSE:UA) are also trading higher.
Fossil Inc. (NASDAQ:FOSL) shares are edging lower after agreeing to purchase Skagen for $236.9 million in cash and stock. “Skagen is unique and has enormous potential as a lifestyle brand,” said Fossil Chief Executive Kosta Kartsotis. “We see many similarities in the history and values of our two companies and look forward to creating something greater together.”
Investor Insight: Can Precious Metals Overcome U.S. Dollar Strength?
Tuesday’s Trending Stocks
This afternoon, markets are searching for direction after a solid morning lift of stock market prices. Here are a few of the top stocks driving the investor and trader chatter today:
lululemon athletica (NASDAQ:LULU): Comparable-store sales for Q4 are predicted to show a low- to mid-twenties percentage increase on a constant-dollar basis. This compares to the company’s previous guidance for Q4 of low- to mid-teens comparable-store sales.
Tiffany (NYSE:TIF) dropped its full-year EPS guidance to $3.60-$3.65 from its previous outlook of $3.70-$3.80. Analysts’ consensus estimate was $3.76. The luxury retailer claimed that during the two months ended December 31 its sales had slumped markedly in the U.S. and Europe. However, the company’s holiday sales still rose 7 percent year-over-year, and its same-store sales increased 4 percent. Tiffany CEO Michael Kowalski said, “We remain confident of our ability to expand our worldwide presence, to serve the growing global demand for Tiffany products and to achieve a solid rate of annual growth in sales and earnings in 2012.” Tiffany fell $6.99, or 10.44 percent, in early trading to $59.95. Other luxury retailers also dropped, with Saks (NYSE:SKS) declining 2.79 percent to $9.41 and Nordstrom (NYSE:JWN) down 0.99 percent to $49.17.
RBC forecasts that bank stocks could climb 20 percent to 25 percent in 2012, and Fifth Third Bancorp (NASDAQ:FITB) is one of analyst Gerard Cassidy’s top picks for 2012.
JetBlue Airways (NASDAQ:JBLU): American (NYSE:AMR), Delta (NYSE:DAL), United (NYSE:UAL) and US Airways (NYSE:LCC) have all tacked a $3 fee onto flights to Europe, as a means of offsetting the expense of a rigorous new European emission plan, The Los Angeles Times reported.
Green Mountain Coffee Roasters (NASDAQ:GMCR) today announced that it will reveal financial results for its fiscal 2012 first quarter in a press release following the close of the financial markets on Feb. 1, 2012.
Markets closed up on Wall Street today: Dow +0.56%, S&P +0.89%, Nasdaq +0.97%, Oil +0.86%, Gold +1.46%.
On the commodities front, Oil (NYSE:USO) climbed to $102.18 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,631.60 an ounce while Silver (NYSE:SLV) rose 3.75% to settle at $29.86.
Today’s markets were up because:
1) Europe. Fitch Ratings said today that Europe is on the right path toward solving its debt problems, while reiterating the agency’s December stance that it does not plan to downgraded AAA-rated France this year. The ratings agency will give a decision on all European countries it currently has on negative watch by the end of the month, but though the company indicated there’s a “significant chance” that Italy will be downgraded, Italian Prime Minister Mario Monti was in the news today saying he would unveil a package of measures meant to encourage competition and expansion and stimulate economic growth at a meeting of European Union finance ministers later this month.
2) Earnings. An upbeat report from Alcoa (NYSE:AA) kicked off earnings season after the bell on Monday, with investors brushing off the company’s fourth-quarter loss, instead focusing on the fact that the nation’s largest aluminum producer topped sales estimates and issued a positive outlook for aluminum demand in 2012. Though no major corporate reports are scheduled for today, Lennar (NYSE:LEN) and JPMorgan (NYSE:JPM) are on deck for this week.
3) Banks. Financial stocks led today’s rally, with Bank of America (NYSE:BAC) surging 6 percent, making it the best performer on the Dow. Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) were both up around 4 percent, while Citigroup (NYSE:C) and JPMorgan (NYSE:JPM) each rose more than 2 percent.
After Hours Radar Stocks
Shares of Microsoft Corp. (NASDAQ:MSFT) are down more than 1.3 percent after saying PC sales will be worse-than-expected, due to Thailand flooding. Shares of Hewlett Packard Co. (NYSE:HPQ) and Apple Inc. (NASDAQ:AAPL) are also trading lower in late trading.
Urban Outfitters Inc. (NASDAQ:URBN) shares are plummeting more than 15 percent after the closing bell. In order to pursue other opportunities, Glen Senk, the company’s Chief Executive announced he would be leaving immediately.
Don’t Miss: Eastman Kodak’s New Business: Suing for Dollars.
After closing 4.25 percent higher on Tuesday, shares of Crocs Inc. (NASDAQ:CROX) continue to gain another 6.14 percent in extended trading. The company announced that fourth-quarter revenue will be in its high end of $200 million to $205 million forecast. Annual revenue is poised to surpass $1 billion for the first time. Nike Inc. (NYSE:NKE) is also trading slightly higher in late trading.
In late trading, shares of Eastman Kodak Co. (NYSE:EK) jumped 1.6 percent. EK said it is suing Apple and HTC Corp. According to EK, infringement of certain patents related to digital imaging technology was made. Kodak claims Apple’s iPhones, iPads, and iPods, and some of HTC’s smartphones and tablets use Kodak patents for transmitting images, and therefore EK is seeking to prevent further patent infringement from Apple and HTC. It will seek compensation as well.
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