Market Musings (Robert Hum)
- Stocks end lower, but Dow nearly halves earlier 184-point drop
- Nasdaq Composite down 4 consecutive days for worst 4-day losing streak in 5 months
- Nasdaq Composite closes at lowest level since March 8
- Wal-Mart knocks 22 points off the Dow, today’s worst performer on the Dow
- CBOE Gold Index closes at 2-year low, copper settles at 3-month low
- Apple extended its losses for the ninth session out of ten.
In the News Tonight
NETFLIX BEATS EXPECTATIONS BUT STOCK PLUMMETS ON SUBSCRIBER CONCERNS/CNBC.COM - Julia Boorstin: “Netflix shares have plummeted after hours, despite the fact that the top and bottom line both came in better than expected. The DVD and streaming video service reported revenue of $870 million, three million more than Wall Street projected. And the company lost just 8 cents per share, compared to the 27 cent-per-share loss Wall Street expected.”
NETFLIX STILL VOLATILE EVEN WHEN ON TARGET/Marketwatch – Therese Poletti: “Investors don’t often sell off a stock when a company’s earnings are pretty much in line or slightly better than expectations. But in the case of the beleaguered Netflix Inc. after what the company calls its “brand hit” last year, it still has the capacity to earn the wrath of Wall Street. The company reported a first-quarter loss that was far less than Wall Street had projected, with revenues that were slightly above analysts’ range.”
TXN CEO is calling the bottom for his company: "As we expected, our business cycle bottomed in the first quarter, and early signs of growth began to emerge," said Rich Templeton, TI's chairman, president and CEO. "Orders were up 13 percent, and backlog is growing again. Particularly encouraging is the breadth of increased orders across geographical regions and markets, including the industrial sector."
TEXAS INSTRUMENTS PROFITS TOP FORECAST, SHARES JUMP/CNBC.COM: "Texas Instruments posted a 60 percent decline in its quarterly profit but revenue was slightly ahead of analysts' expectations and the chip maker said a prolonged inventory related decline in demand had come to an end. The semiconductor maker delivered first-quarter earnings excluding items of 32 cents per share, down from 55 cents a share in the year-earlier period."
FACEBOOK TO SHAKE OFF WINTER BLUES/WSJ – Rolfe Winkler: “Facebook is still adding users at a rapid clip. But revenue is having trouble keeping up. According to first-quarter results published Monday, the social network has surpassed 900 million monthly active users. Considering that 12% of the world was already using the site at least once per month when the quarter started—and Facebook isn't in China—it is impressive that user growth actually accelerated slightly. The number of users grew 7% compared with the fourth quarter, which itself was up 6% compared with the third.”
THAT $1B FOR INSTAGRAM? IT’S 23M SHARES OF FACEBOOK + $300M IN CASH (AND A $200M TERMINATION FEE)/AllThingsD - Kara Swisher: "Here is a relevant and juicy new detail about Facebook’s acquisition of photo-sharing start-up Instagram, which is buried deep in the new S-1 document the social networking giant just filed." ... "That means in the deal, Facebook is valuing its share price at just under $31 a share or $77 billion for the whole tamale."
BEFORE ITS I.P.O., GOOGLE LOOKED STRONGER THAN FACEBOOK/NY Times – Peter Eavis: “How did Google do?
That might be a good question for investors interested in buying Facebook shares to ask ahead of the company’s initial public offering, which is expected in mid-May. And it’s worth posing that question after Facebook released earnings on Monday for the first quarter of 2012. In that quarter, Facebook’s expenses nearly doubled from the previous year. That hit profit, which fell to $205 million in the quarter, from $233 million in the year-earlier period. It’s easy to explain away the drop in profit; of course, costs are going to soar in fast-growing company like Facebook.”
SOCIAL SECURITY FINANCIAL LIFESPAN SHORTENED THREE YEARS/USA Today - David Jackson: “The lifespan of Social Security trust fund has been shortened three years because of high energy prices and a slow economy, trustees said Monday. Social Security benefits will now run out in 2033, said its trustees in an annual report released today.”
UNITED CONTINENTAL NEARS DEAL WITH BOEING FOR PLANES/WSJ – Daniel Michaels: “United Continental Holdings Inc. will soon finalize a deal with Boeing Co. for more than 100 of its 737 single-aisle jetliners, according to a person familiar with the matter. If completed, the deal would mark a significant win for Boeing, which last year placed far behind its European rival Airbus in landing orders for small airliners.”
MANAGERS POCKET 28 PERCENT OF HEDGE FUND PROFITS – STUDY/Reuters – Laurence Fletcher
Hedge fund managers pocketed 28.1 percent of profits generated by their funds over the past 18 years, new research from London's Imperial College found. The research, commissioned by KPMG and hedge fund industry body the Alternative Investment Management Association, found investors' share of annual profits delivered by hedge funds from 1994-2011 was 71.9 percent. It also found funds delivered an average annual return of 9.07 percent from 1994-2011, compared with 7.27 percent from global commodities, 7.18 percent from stocks, and 6.25 percent from global bonds.
Tomorrow’s Movers Tonight (JeeYeon Park)
Netflix - The online movie streaming company posted a loss of 8 cents a share on revenue of $870 million. Analysts had expected a loss of 27 cents on sales of $866 million. Still, shares plunged sharply in after-hours trading, hurt by worries over the company's subscriber rate outlook, according to Citigroup.
Big Lots - The retailer's stock plunged after the firm announced it is slashing its first-quarter U.S. same-store sales expectations. "U.S. comp store sales were on plan for the first six weeks of the quarter. However, sales compared to plan began to slow in late March and trends have further softened as we move through the month of April," according to the company's press release.
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Tomorrow's Economic Data
900 am et Feb S&P/Case-Shiller HPI
1000am et Mar New home sales
1000am et Apr Consumer confidence
1000am et Feb FHFA HPI
1000am et Apr Richmond Fed Survey
1300pm et 2-Yr Note Auction
***FOMC Meeting Day 1
Tomorrow on CNBC
7-9am ET, Squawk Box — Jon Huntsman, Fmr. Utah Gov. (R)
7-9am ET, Squawk Box — Ralph De la Vega, AT&T Mobility President & CEO
12:30p ET, Fast Money Halftime Report, Whitney Tilson, T2 Partners LLC Managing Partner, Tilson Mutual Funds Co-Portfolio Manager
12:30p ET, Fast Money Halftime Report, Hikmet Ersek, Western Union, President & CEO
3:10p ET, Closing Bell — Lew Frankfort, Coach, Chairman & CEO
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