Dollar Strength Goes On as Korea Strife Boils
The North Korean attack, and continued concerns over the spreading European debt crisis (specifically Spain, which has a GDP almost twice as large as Ireland, Portugal and Greece combined) are weighing on stocks today. Spain's stock market is down 2 percent.
The dollar is stronger again today...huh? It was assumed that QE2 would weaken the dollar...but in the interim, more bad news from Europe made the euro weaker, and China is trying to slow growth. The dollar has become the best of the worst currencies.
1) Big topic this morning is the Fed Minutes: the November 2-3 FOMC minutes will be released this afternoon. There has been talk that the Fed will reduce their economic outlook for 2011.
2) J Crew up 21 percent pre-open amid reports that TPG Capital and Leonard Green & Partners are in talks to buy the company in a deal worth $43.50 per share, according to the WSJ, well above yesterday's closing price of $37.65 (TPG was a former owner). J Crew reports earnings after the bell today.
3) The proposed purchase of Dynegy by Blackstone Group is off due to lack of shareholder support, despite the fact that Blackstone had raised its bid by 11 percent. The largest shareholders, Carl Icahn and Seneca Capital, both opposed the deal. Dynegy said a special committee will examine strategic alternatives.
4) Hewlett-Packard rises 2 percent after its Q4 earnings topped expectations ($1.33 vs. $1.27 consensus) on a better-than-expected 8 percent rise in revenues. PC shipments rose 2 percent, and the unit saw profits surge 23 percent.
The tech firm raised its outlook for its new fiscal year to $5.16-$5.26 above $5.11 consensus and provided aggressive earnings and revenue guidance for its first quarter ($1.28-$1.30 vs. $1.22 consensus on revenues of $32.8 billion-$33.0 billion vs. $32.7 billion consensus).
5) Hormel rises 3 percent and the meat processor easily surpassed Q4 earnings estimates ($0.90 vs. $0.79 consensus). Revenues surged a much stronger-than-expected 23 percent as volumes jumped 14 percent with strength coming at both its Jennie-O turkey and refrigerated foods segments.
The company's guidance for its new year of $3.10-$3.20 exceeds current Street estimates of $3.06.
6) Johnson & Johnson falls 1 percent after it recalled 4 million boxes of children's Benadryl pills and 800,000 bottles of children's Motrin caplets from retailers and wholesalers — citing "insufficiencies" in their manufacturing process. Despite the manufacturing issues, J&J isn't asking consumers to return the products, and instead gives assurance that the products are safe.
7) Medtronic falls 1 percent despite beating Q2 earnings estimates by a penny. Sales of its defibrillators and pacers fell and shares are trading lower as the medical devices maker sees a weaker 2nd half, cutting its full-year guidance again to $3.38-$3.44 vs. $3.41 consensus.
8) Semiconductor testing equipment maker Teradyne announced a $200 million stock buyback program.
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