Ultimate Market Recap: Zynga Seeks Huge Web IPO, Under Armour Attracts Women
Friday Morning’s Top Stories
In a speech to Germany’s (NYSEARCA:EWG) Parliament, German Chancellor Angela Merkel said quick treaty changes could help make a tighter fiscal union in the 17-nation euro-zone; however, she does not support proposals for joint eurobonds, adding that the current problems in the region could take years to end.
Merkel said, according to The Wall Street Journal, “We are going to Brussels with the intention to change the [European Union] treaty. The goal is a fiscal union that enforces both fiscal discipline in its members and has the necessary instruments to allow fiscal policy coordination.”
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Fitch Ratings analyst Charlene Chu’s new report said Chinese banks are seeing increasing strains; however, it may not become visible in non-performing loan ratios until bank asset quality has significantly weakened. Chu added that liquidity stress would be reflected through loan delinquencies with an ensuing lagging cash flow from challenged borrowers and additional resources going to help weak institutions.
Zynga Inc., the online game developer, will look to raise close to $1 billion in its upcoming IPO through the sale of 100 million shares. They will be priced between $8.50 and $10. Should the stock go at $10 in the IPO, Zynga could see its valuation close to $7 billion, according to its prospectus.
Don’t Miss: Zynga Seeking Biggest Web IPO Since Google.
The stock will trade on the NASDAQ (NASDAQ:NDAQ) under the symbol ZNGA by Dec. 16.
Research In Motion Limited (NASDAQ:RIMM) finished the week with more bad news. The company announced in a press release it will take a $485 million pretax predominately non-cash provision from its PlayBook tablet. It now expects its fiscal quarter three revenue to be come in lower than its previous range of $5.3 billion to $5.6 billion. In addition, earnings per share should be at the low to mid-point of the company’s previous forecast of $1.20-$1.40.
RIM will release its the third quarter fiscal 2012 results on Dec. 15.
Friday Morning Hot Stocks
Shares of Research in Motion (NASDAQ:RIMM) are down more than 7% early Friday. The company announced it would miss its adjusted 2012 profit target of $5.25 to $6 a share. Lower unit shipments in the fourth quarter were blamed.
Big Lots Inc. (NYSE:BIG) is also falling more than 7% after posting lower net income in the third quarter. Net income for the discount store fell to $4.2 million (6 cents per share), compared to $17.7 million (23 cents per share) a year earlier. This is a decline of 76.3% from the year earlier quarter. Competitors include: Wal-Mart Stores, Inc. (NYSE:WMT), Costco Wholesale Corp. (NASDAQ:COST), and Family Dollar Stores, Inc. (NYSE:FDO).
Investing Insights: Big Lots Inc. Earnings Cheat Sheet: Profit Drops, but Beats Estimates.
After reporting a profit rise of 43%, Royal Bank of Canada (NYSE:RY) is receiving a 2.3% boost this morning. Net income from continuing operations also jumped 19%, compared to only a 4% rise in the previous quarter.
Western Digital Corp. (NYSE:WDC) is surging over 10% after raising its revenue outlook for its fiscal second quarter. The company expects Thailand flood-related costs to be $225 million to $275 million for the quarter.
CME Group Inc.’s (NASDAQ:CME) is edging higher, despite reporting a 7% decline in trading volume. The daily volume average was in November was 13.2 million contracts.
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Friday’s Trending Stocks
As the unemployment rate dropped to its lowest rate in 3 years, 8.6%, the Dow Jones Industrial Average is trading higher at 12,079 and the S&P 500 Index is trading above 1,250. Here’s the hottest stocks buzzing on Wall Street today:
- Big Lots, Inc. (NYSE:BIG): Shares of Big Lots, Inc. are trading lower 9% today. Big Lots, Inc. is a broadline closeout retailer that operates stores across the United States. The Company’s stores offer an assortment of merchandise, including consumables, seasonal products,furniture, housewares, toys, and gifts.
- PVH Corp (NYSE:PVH): Shares of PVH Corp are trading higher 6.5% today. Phillips-Van Heusen Corporation designs, sources, manufactures, and markets men’s, women’s, and children’s apparel and footwear. The Company markets its products at a wholesale level through department store chains and directly to consumers through retail stores.
- Zumiez Inc. (NASDAQ:ZUMZ): Shares of Zumiez Inc. are trading higher 21% today. Zumiez Inc., is a specialty retailer of action sports related apparel, footwear, equipment, and accessories.
- Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA): Shares of Ulta Salon, Cosmetics & Fragrance, Inc. are trading higher 6% today. Ulta Salon, Cosmetics & Fragrance, Inc. sells cosmetics, fragrances, skin and hair care products, appliances, and accessories. The Company also offers hair salon services, manicures, pedicures, massages, and other beauty & spa treatments.
- Rubicon Minerals Corp. (NYSEAMEX:RBY): Shares of Rubicon Minerals Corp. are trading higher 10% today. Rubicon Minerals Corporation is a mineral exploration company. The Company explores for gold deposits in the Red Lake gold camp of Canada, as well as Nevada and Alaska.
- Navios Maritime Holdings Inc. (NYSE:NM): Shares of Navios Maritime Holdings Inc. are trading higher 18% today. Navios Maritime Holdings, Inc. offers maritime freight transportation services. The Company specializes in worldwide carriage, trading, storage and related logistics of international bulk cargoes.
- Gildan Activewear Inc. (NYSE:GIL): Shares of Gildan Activewear Inc. are trading higher 2% today. Gildan Activewear Inc. manufactures and markets branded basic activewear. The Company sells its products principally in the wholesale imprinted activewear segment of the North American apparel market. Gildan sells cotton T-shirts, placket collar golf shirts, tank tops, and sweatshirts.
- Mitel Networks Corporation – Common Shares (NASDAQ:MITL): Shares of Mitel Networks Corporation – Common Shares are trading higher 25% today. Mitel Networks Corp., is a provider of communications solutions for organizations. The Company offers solutions, from business communications to unified communications, from prepackaged to tailored applications.
- Western Digital Corp. (NYSE:WDC): Shares of Western Digital Corp. are trading higher 10% today. Western Digital Corporation designs and manufactures hard drives for desktop computers and home entertainment applications.
- Texas Industries, Inc. (NYSE:TXI): Shares of Texas Industries, Inc. are trading higher 1% today. Texas Industries, Inc. and its subsidiaries supply construction materials such as cement, aggregate, and concrete products. The Company’s customers include the construction, original equipment manufacturers, tool, and country goods markets.
Markets closed mixed on Wall Street today: Dow -0.01%, S&P-0.02%, Nasdaq +0.03%, Oil +0.81%, Gold +0.56%.
On the commodities front, Oil (NYSE:USO) climbed to $101.01 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) climbing to $1,749.50 an ounce while Silver (NYSE:SLV) fell 0.49% to settle at $32.60.
Hot Feature: Sarkozy Calls for New Treaty to Unify Euro Zone
Today’s markets were mixed because:
1) Unemployment rate. The mood on Wall Street was positive after the Labor Department said the U.S. unemployment rate had eased to 8.6% in November as employers added 120,000 new jobs. Last month’s unemployment rate is the lowest since March 2009. Though the 8.6% figure is skewed by the number of people dropping out of the workforce, and my temporary holiday hiring, investors were still satisfied with the pick up in hiring, and markets opened sharply higher Friday morning, with all three of the major indices topping 1% in early trading.
2) Europe. News out of Europe dampened that early euphoria, putting investors on edge and leading to sharp declines off the morning’s highs. Talk of a possible downgrade to Spain’s credit rating spooked investors and sent the Spanish 10-year yield up to 5.7%. Also, reports that Republicans would try to block any move by the European Central Bank to lend funds to the International Monetary Fund to aid Europe’s cash-strapped countries further worried investors who have become disillusioned with the government and partisan politics. Conservative lawmakers are against the Washington-based IMF’s involvement because it could leave U.S. taxpayers footing the bill.
3) Banks. Bank stocks were among the top gainers today, with Bank of America (NYSE:BAC) and JPMorgan (NYSE:JPM) leading the Dow’s early advanc. Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS), and Citigroup (NYSE:C) shares all closed the day sharply higher despite the market’s general decline in the afternoon.
After Hours Radar Stocks
After falling 3.7% during regular market hours, shares of Sprint (NYSE:S) continue to edge lower in late trading. Meanwhile, shares of Clearwire (NASDAQ:CLWR) finished the day 5.4% higher. Clearwire received a boost from the Verizon(NYSE:VZ), Comcast (NASDAQ:CMCSA), and Time Warner (NYSE:TWC) big spectrum deal.
Shares of Research in Motion (NASDAQ:RIMM) continue to head .20% lower in late trading. Earlier in the day, shares dropped 9.74% after the company reduced its outlook and announced it would miss profit targets. Competitors include: Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG).
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Under Armour (NYSE:UA) continues to attract attention as it seeks to expand its product line to women. The company’s new spring launch will include its first bra line named Armour Bra. “The women’s business is critical to our growth,” said Senior Marketing Director for Women Adrienne Lofton in an interview. “Our goal is not only to be featured in sports but also in fashion and entertainment books. It’s important for us to be where she is. We are introducing the brand as a women’s brand. My biggest objective is to grow the awareness.”
Due to legal cases, Altria Group (NYSE:MO) lowered its fiscal year 2011 EPS guidance to between $1.58 and $1.64. Previously, the company had projected $1.60 to $1.66. Shares are down .21% after the closing bell.
Shares of CenturyLink (NYSE:CTL) popped 2.05% late Wednesday after the company reported a third quarter profit of $140 million (23 cents per share), compared to $232 million (76 cents per share) last year. However, revenue increased to $4.6 billion, compared to only $1.75 billion.
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