Friday Morning’s Top Stories
The EFSF bailout fund is discussing if the final version of its investor prospectus should include the language, “risk factors.” The current draft says that either a country may leave the eurozone or the euro could end as a “lawful currency.”
Adding fuel to the fire for investors, Italy (NYSE:EWI) and Spain (NYSE:EWP) are set to contribute 32 percent of the fund. The debt can also be used “for repos with commercial banks to support the EFSF’s liquidity management” meaning it can repeatedly be borrowed against.
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Fitch Ratings downgraded the credit ratings for eight banks to A from either A+ or AA- as the banks’ business models are “particularly sensitive” to economic and regulatory challenges. The banks are Bank of America (NYSE:BAC), Barclays (NYSE:BCS), BNP Paribas (NYSE:BNP), Credit Suisse (NYSE:CS), Deutsche Bank AG (NYSE:DB), Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), Societe General (SCGLY) and UBS AG (NYSE:UBS).
Another day of bad news for Research in Motion (NASDAQ:RIMM). Shares of RIM plummeted in postmarket trading on Thursday after the company reported its fourth quarter earnings per share, revenue and BlackBerry shipment forecasts came in below analyst expectations. RIMS said its adjusted third quarter earnings per share dropped 27 percent to $1.27 while revenue fell 5.5 percent to $5.17 billion.
Don’t Miss: Zynga Raises $1 Billion in IPO.
RIM also took a large charge on the launch of its disappointing PlayBook tablet. One positive spot? RIM’s subscription base increased 35 percent, indicting that new customers are interested in its core product, notably in emerging markets.
Just in time for Christmas, Sony Corporation (NYSE:SNE) plans to release its next-generation PlayStation Vita game machine in Japan on Saturday. The company is very positive and believes the dedicated consoles can do well against the backdrop of the competitive and popular Apple Inc. (NASDAQ:AAPL) iPhone and Android (NASDAQ:GOOG) games. Pre-orders for the consoles have been “extremely favorable,” according to the New York Times.
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Friday Morning Hot Stocks
Zynga (NASDAQ:ZNGA) will be in the spotlight Friday. The social gaming company priced its initial public offering at $10 per share. It was previously estimated to price at $8.50 to $10 per share. Skeptics still remain, as other social stock offerings such as LinkedIn Corp. (NYSE:LNKD) and Groupon Inc. (NASDAQ:GRPN) have performed poorly this year.
Don’t Miss: Zynga Raises $1 Billion in IPO.
Shares of Pfizer Inc. (NYSE:PFE) are receiving a 1 percent boost this morning. The company said a Phase III study of its Lyrica drug met each of its three co-primary endpoints. The drug is for restless-leg syndrome. Other pharmaceutical companies such as Bristol Myers Squibb Co. (NYSE:BMY) and Merck & Co. (NYSE:MRK) are also trading higher.
Molycorp Inc. (NYSE:MCP) is jumping more than 3 percent before the opening bell. The rare earth company won approval from the U.S. Bureau of Land Management to drill near its operating in Mountain Pass, California.
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Darden Restaurants Inc. (NYSE:DRI) is trading down 1.17 percent this morning. The parent company of the Olive Garden and other restaurants reported that fiscal second quarter net earnings decreased 28 percent to $53.7 million (40 cents per share).
Shares of Adobe Systems Inc. (NASDAQ:ADBE) are climbing 5.09 percent after the opening bell. The company announced fourth quarter profits of $173.7 million (35 cents per share), compared to $269 million (53 cents per share) last year.
Cablevision Systems Corp. (NYSE:CVC) is trading more than 13% lower after being downgraded from buy to hold at ISI Group. The company also unexpectedly announced that its chief operating officer will be leaving the company.
Friday’s Trending Stocks
The Dow Jones Industrial Average is trading up at 11,935, while the S&P 500 Index is trading up at 1,227 on Friday. Here are the hottest stocks among investors and traders on Wall Street today:
- Zynga Inc. (NASDAQ:ZNGA): Shares of Zynga Inc. are trading lower 5% today.
- RSC Holdings Inc. (NYSE:RRR): Shares of RSC Holdings Inc. are trading higher 55% today. RSC Holdings, Inc. rents equipment. The Company operates equipment rental locations in the United States and Canada.
- ISTA Pharmaceuticals, Inc. (NASDAQ:ISTA): Shares of ISTA Pharmaceuticals, Inc. are trading higher 69% today. Ista Pharmaceuticals, Inc. develops proprietary therapeutic products that save and improve eyesight. The Company’s product candidates and programs address diseases and conditions such as vitreous hemorrhage, diabetic retinopathy, glaucoma, ocular pain, and inflammation.
- Cablevision Systems Corporation (NYSE:CVC): Shares of Cablevision Systems Corporation are trading lower 14% today. Cablevision Systems Corporation provides telecommunications and entertainment services. The Company has operations in multimedia delivery, subscription cable television services, championship professional sports teams, and national television program networks.
- United Rentals, Inc. (NYSE:URI): Shares of United Rentals, Inc. are trading higher 3.92% today. United Rentals, Inc., through its subsidiary, is an equipment rental company operating a network of locations in the United States, Canada, and Mexico. The Company serves the construction industry, industrial and commercial concerns, homeowners, and other individuals.
- Morton’s Restaurant Group, Inc. (NYSE:MRT): Shares of Morton’s Restaurant Group, Inc. are trading higher 32% today. Morton’s Restaurant Group, Inc. operates a chain of high end steak restaurants. The Company operates internationally with their main concentration of locations in the United States. Morton’s specializes in steaks but believes their menu selection is broad enough to appeal to many taste preferences and desires. The Company uses tableside menu presentations to hightlight and personalize service.
- athenahealth, Inc (NASDAQ:ATHN): Shares of athenahealth, Inc are trading higher 2% today. athenahealth Inc. provides Internet-based business services for physician practices. The Company’s services include a revenue cycle management service that automates and manages billing-related functions for physician practices and includes a practice management platform.
- Accenture Plc (NYSE:ACN): Shares of Accenture Plc are trading lower 4% today. Accenture PLC provides management and technology consulting services and solutions. The Company delivers a range of specialized capabilities and solutions to clients across all industries on a worldwide basis. Accenture’s network of businesses provides consulting, technology, outsourcing, and alliances.
- InterMune, Inc. (NASDAQ:ITMN): Shares of InterMune, Inc. are trading lower 8% today. InterMune, Inc. is a biopharmaceutical company. The Company develops therapies for hepatology and pulmonology, including treatments for severe, malignant osteopetrosis and chronic granulomatous disease.
- 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.
Markets closed mixed on Wall Street today: Dow -0.02%, S&P +0.32%, Nasdaq +0.56%, Oil +0.11%, Gold +1.44%.
On the commodities front, Oil (NYSE:USO) climbed slightly to $93.97 a barrel. Precious metals were up, with Gold (NYSE:GLD) climbing to $1,599.90 an ounce while Silver (NYSE:SLV) climbed 1.35% to settle at $29.67.
Hot Feature: Static Consumer Prices Signal Cooling Inflation
Today’s markets were mixed because:
1) Fitch. A midday sell-off came after Fitch Ratings put seven European countries on creditwatch negative, citing a higher probability that it could downgrade Belgium, Spain, Slovenia, Italy, Ireland, or Cyprus in the next few months. Markets forfeited a good share of their earlier gains, with the Nasdaq and S&P 500 falling off session highs upwards of 1%. Still, investors breathed a sigh of relief that France was not on that list, and the euro zone’s second-largest economy would at least for now retain its pristine AAA rating.
2) Banks. After markets closed on Thursday, Fitch downgraded seven major banks, including Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS), Barclays (NYSE:BCS), Societe Generale, BNP Paribas, Deutsche Bank (NYSE:DB), and Credit Suisse (NYSE:CS). While the financial sector was mixed, all of the downgraded lenders were trading in the red today.
3) Zynga. Shares of Zynga (NASDAQ:ZNGA) rose 10% in their public debut on the Nasdaq today before falling to close the day down 5% off its initial share price of $10. The less-than-stellar debut of the biggest tech IPO since Google (NASDAQ:GOOG) raised $1.9 billion in 2004 does not bode well for markets, and joints
After Hours Radar Stocks
Zynga Inc. (NASDAQ:ZNGA) did not live up to the hype. Unlike previous social networking IPOs like Groupon (NASDAQ:GRPN) and LinkedIn (NYSE:LNKD), Zynga fell 5 percent on its opening day, and continue to head lower in extended trading. Since 2010, eight-teen out of thirty internet social stocks are now trading below their IPO price.
Investing Insights: These Wall Street Analysts Hate Zynga Stock.
Shares of Cablevision Systems Corp. (NYSE:CVC) closed down more than 8% on Friday. The company was downgraded from buy to hold at ISI Group. The company also unexpectedly announced that its chief operating officer will be leaving the company.
Comcast Corp. (NASDAQ:CMCSA) is attracting attention after Chief Executive Brian Roberts agreed to pay a $500,000 civil penalty to settle charges relating to pre-merger reporting. In a statement, Comcast said: “Comcast and Mr. Roberts appreciate the acknowledgement by the Federal Trade Commission that this was a technical and inadvertent violation that was self reported, promptly corrected, and did not involve any financial gain to the company or to Mr. Roberts.”
Don’t Miss: Gold and Silver Close Friday Higher: SLV, GLD.
For the 28th consecutive year, AT&T Inc. (NYSE:T) raised its annual dividend. The company raised its quarterly payout to 44 cents, representing a penny increase. The company pays out $10 billion in annual dividend payments, making it the largest dividend company in the world. Wireless rival, Verizon (NYSE:VZ) also pays a large dividend.
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