Trader Talk

Financials in Focus


Bob Pisani is off today, this was written by CNBC producer Robert Hum

Stock futures are up modestly this morning as the U.S. Dollar is giving up all of its gains from the past two days. The dollar/commodity play continues to hold as commodities are rising 1 percent to 2 percent in early trading, sending commodity stocks 2 percent to 3 percent higher pre-open.

Also in focus this morning are financials:

a) AIG continues to extend its rally from yesterday, rising 10 percent pre-open on heavy volume. Yesterday, the insurance firm soared 21 percent after the Government Accountability Office noted that some signs of stabilization at the company are visible, as AIG’s insurance operations are showing some improvement.

Separately, the House Oversight Committee Chairman, Edolphus Towns, is also reportedly asking his staff to examine Hank Greenberg’s restructuring proposal that would reduce the federal government’s stake from 80 percent to 20 percent of the insurance firm.

b) Citigroup is up 3% despite news of Singapore’s largest sovereign wealth fund GIC has halved its stake in the bank from 9 percent to under 5 percent, realizing profits of $1.6 billion. Despite the sale, GIC says it remains “confident of (Citi’s) long-term prospects.”

c) Bank of America is up 2% after Rochdale Securities analyst Dick Bove raised his price target from $19 to $25, as he remains encouraged by the bank’s improved financial condition.


1) Lowe’s fell 2 percent after reaffirming 2009 guidance and providing a cautious 2010 outlook. The home improvement retailer continues to see this year’s earnings of $1.13-$1.21 vs. $1.20 est., but also sees 2010 earnings of $1.24-$1.34, below current Street forecasts of $1.34.

The company also expects same­-store sales to return to growth in 2010 (up 1 percent) compared to the 7 percent-9 percent decline it sees for this year.

2) CarMax is up 7% after Q2 sales and earnings easily surpassed analyst estimates. The auto retailer noted that the government’s “Cash for Clunkers” helped traffic during late July and August. Same-store sales of used cars rose 8 percent from last year, reversing the 17 percent year-over-year same-store sales decline in the first quarter.

3) ConAgra saw its Q1 earnings topping estimates despite disappointing sales as the performance in its consumer food business helped its bottom line. The food maker, whose brands include Slim Jim, Healthy Choice, and Orville Redenbacher, also boosted its 2010 earnings guidance to $1.70 from prior guidance of $1.63-$1.66 and above analyst estimates of $1.66.



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