Trader Talk

Monday Morning Movers


Pre-open action this morning:

Freddie Mac up nearly 100 percent after reporting its first quarterly profit in nearly two years (excluding the dividend payment to the government). A change in accounting rules, lower funding costs, lower provisions for credit losses, and gains on the company's derivative portfolio were all factors.

They said they didn't need any additional financial aid from the U.S. government "at this time." They saw some signs pointing to a recovery in housing, but their outlook "remains cautious due to rising foreclosures, growing unemployment, tight lending standards and buyer's reluctance to re-enter the market."

Fannie and Freddie are the two most actively traded stocks pre-open.


1) Dow component McDonald's up 1.5 percent pre-open after reporting stronger-than-expected July comparable store sales. Global same-store sales for the fast food giant were up 4.3 percent, led by strength in Europe where sales surged 7.2 percent. U.S. same-store sales were up 2.6 percent, while sales at restaurants open for at least one year in Asia/Pacific, Middle East and Africa were only up 2.1 percent, as growth was "partly offset by China."

2) Rio Tinto down 4 percent after China's spy agency alleged that the company was spying on Chinese companies, alleging that the spying cost the country more than $100 billion by stealing state secrets; Australian officials (where Rio Tinto is located) said the allegations were not new.

3) Chinese stocks fell for a 4th straight day, but Wen Jiabao, China's top economic official says China has no plans to halt its easy credit policy .

4) Hormel up 2 percent pre-open after the meat producer raised full-year guidance on strength from its refrigerated foods and Jennie-O Turkey operations. The company now expects earnings to come in between $2.36 and $2.42 per share, up from prior guidance of $2.15-$2.25 and ahead of analyst forecasts of $2.29.

5) Shares of Priceline are up 5 percent pre-open after Q2 earnings rose 35 percent and beat estimates that had already been upwardly revised. The online-travel company saw hotel reservations surge 44 percent and airline bookings rise 14 percent in the quarter.

Demand for summer leisure travel has been strong too, so the company is guiding above estimates ($2.70-$2.85 vs. $2.52 est.) for the third quarter, with sales rising a strong 19 to 20 percent (vs. +9.2 percent est.).

The question remains: Are these results evidence of a broader rise in demand in travel, or is Priceline just taking market share from competitors Orbitz Worldwide and Expedia?



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