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Last Call: Greed Has Something to Do With It

Monday, 9 Jul 2012 | 11:50 PM ET
Curlin
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Curlin

“Certainly greed has something to do with it… one offer was 4x higher in cash than the best offer here… I couldn’t rationalize not selling him overseas.”

-J. Paul Reddam, owner of “I’ll Have Another”

— Below the winner of the Kentucky Derby and the Preakness is heading to Japan for $10 million.

Market Musings WithCNBCMarket Guru Robert Hum

  • Yet another bad case of the Mondays: Dow slumps 36 points, falls for 6th straight Monday
  • Dow, S&P see first 3-day losing streaks in over a month
  • Nasdaq posts first back-to-back declines in over a month
  • MS Healthcare Payors Index surges 10 percent on Wellpoint’s acquisition of Amerigroup , has best day in 3.5 years

Bonus “Look-Ahead” Musing: A good “case of the Tuesdays” for stocks: Dow has risen in each of the past 6 Tuesdays, S&P up 7 straight Tuesdays.

The Word on the Street Tonight

Alcoa Kicks Off Earnings Season With a Slight Beat/CNBC.com w/ AP: “Alcoa reported quarterly earnings and revenue that beat Wall Street's expectations on Monday, but its shares wavered in extended-hours trading. Following the release, the largest U.S. aluminum producer's shares initially rose but last traded flat.”

Alcoa Harbinger of Strength Elsewhere: Najarian/CNBC – Lee Brodie: “Can you extrapolate Alcoa results to other areas of the market? Pete Najarian, co-founder OptionMonster.com, thinks you can. Although Alcoa posted a second-quarter loss, if you're a long-term investor, Najarian suggests focussing on what CEO Klaus Kleinfeld said about the aerospace and automobile markets in an interview on CNBC. “Alcoa is successfully capitalizing on accelerating demand in high-growth end markets such as aerospace and automotive," Kleinfeld told CNBC. Najarian takes the commentary as confirmation that companies such as Ford and Toyota – Alcoa customers – are experiencing solid demand for their lighter more fuel efficient vehicles.”

Chip Maker AMD Cuts Revenue Forecast; Shares Fall/Reuters: “Advanced Micro warned on Monday that its revenue would decrease about 11 percent sequentially due to softer-than-expected sales in China and Europe.”

Norway intervenes to avert oil industry closure/Reuters: “Norway's government ordered on Monday a last-minute settlement in a dispute between striking oil workers and employers in a move to alleviate market fears over a full closure of its oil industry and a steep cut in Europe's supplies. The strike over pensions has kept oil prices on the boil as a lack of government action to avert a plan by the oil industry to lock out all offshore staff from their workplaces from midnight (2200 GMT) has taken markets by surprise.”

Beazer Homes stock drops 7% after hours on this announcement: Beazer estimates higher orders for 3rd qtr/Reuters: “Homebuilder Beazer Homes USA Inc estimated higher orders for the third quarter and said it plans to raise $150 million in share offering. It plans to offer $75 million of its common stock and 3 million tangible equity units.”

May Consumer Credit Expands Most in Five Months/Reuters: “U.S. consumer credit expanded in May by the most in five months as Americans used their credit cards more readily, offering hope consumer spending will help the sputtering economy. Consumer credit grew by $17.12 billion in May, the Federal Reserve said on Monday. That was well above the $8.5 billion advance Wall Street economists had forecast in a Reuters poll.”

USDA reports condition of corn in 18 major production states hurt by widespread drought/AP: “Corn and soybean prices surged Monday after the latest government report showed a widespread drought in the middle of the country is hurting this year’s crop. The U.S. Department of Agriculture report said 30 percent of the corn in the 18 states that produce most of the nation’s crop is now considered in poor or very poor condition. A week ago, it was 22 percent. Indiana and Illinois have been particularly hard hit. The USDA said 61 percent of Indiana’s corn is now rated poor or very poor, compared to 50 percent last week. In Illinois, 48 percent of the corn is rated as poor or very poor, compared to 33 percent a week ago. Nationwide, the amount of corn rated good to excellent also is dropping, to 40 percent this week from 48 percent a week ago. Corn surged 31 cents to $7.74 per bushel in afternoon trading.”

Patriot Coal files for bankruptcy protection/Reuters: “Patriot Coal Corp , a coal producer and marketer that has struggled as customers have switched to cheaper natural gas, on Monday filed for bankruptcy protection saying it would undergo a comprehensive financial restructuring. The company said it had arranged for $802 million in bankruptcy financing that will enable it to continue its usual mining operations and customer shipments throughout the reorganization. Shares in Patriot fell 72 percent to close at 61 cents on Monday after reports that a bankruptcy filing was imminent.”

Secretary Geithner is heading to the Hill tomorrow: At the invitation of Majority Leader Reid, Secretary Geithner will meet Tuesday afternoon on Capitol Hill with members of the Senate Democratic Caucus at their weekly caucus lunch to discuss the economic and fiscal case for the President's proposal to extend tax cuts for middle-class families as well as the Senate's efforts to provide tax relief for small business owners. This meeting is closed press. Later, the Secretary will meet with Senator Baucus on Capitol Hill. This meeting is closed press.

Owner of I’ll Have Another says Japan’s $10M topped any US offer for Derby, Preakness winner/AP: “The owner of I’ll Have Another says he sold his Kentucky Derby and Preakness winner to a farm in Japan for $10 million, a price that far exceeded any amount he was offered in the United States. J. Paul Reddam made his comments in a blog appearing on the bloodhorse.com website. He writes there were two offers from U.S. breeding operations, one valued at just under $5 million, the other at $3 million.”

Big Apple bites into tiny apartments/Crain’s – Amanda Fung: “The New York City pilot program breaks zoning rules and allows units as small as 275 square feet — 30% smaller than currently permitted—to meet today's households' down-scaled needs/budgets.”

Denny's Expanding Global Franchising Presence to China/Press Release: "New Franchisee to Open 50 Denny's Restaurants - Denny's Corporation , the international restaurant concept known as America's Diner, today announced that it has signed an agreement with Great China International Group (GCIG) for the development of 50 new Denny's restaurants in southern China over the next 15 years."

Economic Data

730am et Jun NFIB Survey

1000am et May JOLTS

1300am et 3-Yr Note Auction

Earnings

Before the bell:

Shaw

After the bell:

OCZ Tech

Key Guests

Thomas Stemberg, Highland Consumer Fund Managing Director (700a)

Stephen Dubner, Freakanomics Co-Author (700a)

David Einhorn, Greenlight Capital President (730a)

Michael Brown, City Year CEO (730a)

William Dunkelberg, NFIB Chief Economist (730a)

Stephen Pagliuca, Bain Capital Managing Director (830a)

David Segal, Davids Tea Co-Founder (840a)

Kendall Powell, General Mills CEO (945a)

Sen. Ron Johnson, R-WI (1120a)

Demos Parneros, Staples President of US Retail (140p)

Shawn Matthews, Cantor Fitzgerald CEO (200p)

Hardeep Walla, Motif Investing Co-Founder (200p)

Jeffrey Ettinger, Hormel Foods CEO (315p)

Follow Tom Rotunno on Twitter: @tomrotunno

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