SAC Capital Admits to Criminal Conduct, Apple Gets New Sapphire Supplier: Morning Buzzers
U.S. stock futures fell on Tuesday morning as investors wait for a report on the services industry and weigh third-quarter earnings. Later this morning, the Institute for Supply Management will release its non-manufacturing index, which is expected to have fallen in September. Investors are closely watching reports on the health of the economy for signs as to when the Federal Reserve will decide the economy has strengthened enough to begin cutting stimulus. Data on payrolls and the GDP are also due later this week.
Futures at 8:30 a.m.: DJIA: -0.32% S&P 500: -0.27% NASDAQ: -0.27%
Here’s your cheat sheet to what’s buzzing this morning:
SAC Capital will pay a record $1.2 billion insider trading fine and be the first Wall Street firm of the generation to admit wrongdoing and criminal conduct as the 11-year case comes to a close with a big victory for the U.S. government. SAC plead guilty to five counts of insider trading. In addition to the fine, the firm is forbidden from managing money for outside investors and will be under probation for five years with an external monitor keeping an eye on it. The New York Times pointed out that the hedge fund will still manage founder and billionaire Stephen A. Cohen’s money, which will help it continue to have an influence on Wall Street.
GT Advanced (NASDAQ:GTAT) has signed a $578 million contract with Apple (NASDAQ:AAPL) to supply Apple with its advanced sapphire technology, the company revealed in its earnings report according to Apple Insider. Apple uses sapphire in its camera lenses and the home button of the iPhone 5S. GT Advanced will work on the project at its factory in Arizona. GT is working on new sapphire technology using an Advanced Sapphire Furnace that it believes will produce higher volumes of high quality sapphire at a lower cost.
LeapFrog Enterprises Inc. (NYSE:LF) shares fell on Monday after the children’s electronics and toy maker lowered its full-year guidance due to the general struggles of retail overall and fewer shopping days between Thanksgiving and Christmas this year. LeapFrog’s sales have risen 9 percent during the year, but the company is being cautious about the holiday shopping season, according to the Wall Street Journal. LeapFrog had previously expected its full-year sales to grow in the high single digit percentage range, but lowered its guidance to between a two percent drop and a two percent gain.
Hertz Global Holdings Inc. (NYSE:HTZ) reported quarterly earnings that beat expectations, partially due to the success of its purchase of the discount car rental chain Dollar Thrifty. Hertz’s earnings of 73 cents a share beat analyst expectations of 71 cents and revenue rose 22 percent to $3.1 billion, topping expectations of $3.06 billion according to analysts from Thomson Reuters. Still, Hertz reaffirmed its lower full-year guidance, but said it has been seeing improvement in sales at its Hertz locations post-government shutdown.
Follow Jacqueline on Twitter @Jacqui_WSCS