Wall Street Trends Lower, Oil Volatile; Kodak, Shutterfly in a Deal

Nichole Harper
02 Mar, 2012
New York City

U.S. stocks traded sideways and the Nasaq and the S&P 500 indexes are flirting at highs in several years. Oil was volatile after conflicting reports of a pipeline explosion in Saudi Arabia. Sara Lee said it plans to spin-off its coffee and tea business.

[R]1:20 AM New York – U.S. stocks traded sideways and the Nasaq and the S&P 500 indexes are flirting at highs in several years. Oil was volatile after conflicting reports of a pipeline explosion in Saudi Arabia. Sara Lee said it plans to spin-off its coffee and tea business.[/R]

Stocks in early trading in New York were trading sideways after oil declined from its recent highs and commodities prices eased.

The S&P 500 index is expected to close higher for the third week in a row and up 9% in the year so far and the Nasdaq gained for the eight out of last nice weeks and has jumped 14% in the year.

The Nasdaq closed above 3,000 level on Wednesday for the first time since 2001 and the once widely followed the narrow index of large companies Dow Jones broke 13,000 Tuesday for the first time since May 19, 2008.

Investors were focused on the crude oil prices after the Iranian state controlled television channel reported that Saudi Arabia faced a pipeline explosion. However, Saudi Arabia denied the reports.

The online photo service provider Shutterfly agreed to acquire online photo service of Eastman Kodak for $23.8 million according to Kodak spokesman Christopher Veronda.

Eastman Kodak plans to sell its portfolio of 1,100 patents that are expected to generate more than $3 billion as the company restructures in bankruptcy and focuses on its core business.

Yelp Trades 65% Higher

The online consumer reviews provider, Yelp priced its initial public offering at $15 a share and opened 60% higher and jumped as high as $25.

Yelp filed to sell its share between $12 and $14 a share and the offering raised $96 million after expenses that valued the company at $900 million.

The online review site has gained a leading position among its other competitors and has consistently increased its advertising revenues since it was started in 2004. The site attracted more than 66 million monthly users and has grown to 25 million reviews.

The review site that relies on local advertising has never been profitable since its start and generated $83.3 million in 2010 revenues, an increase of 74% from a year ago. The net loss in the year declined to $9.6 million from $16.7 million a year ago

Analysts are wondering if the company has a long term earnings potential on its local advertising base as it competes with several other players including Google, Facebook, Groupon and Angie’s List.

Stock Movers

Big Lots, Inc. ((BIG)) decreased 3.1% or $1.41 to $43.08 after the consumables retailer reported fourth quarter net sales increased 7.5% to $1.63 billion from $1.52 billion in the same quarter last year. Comparable store sales increase of 3.4%. Net income in the quarter increased 7% to $114.7 million or $1.75 per diluted share compared to $110.1 million or $1.46 per diluted share in the year ago earlier.

CVR Energy Inc ((CVR)) after the Texas based oil refiner rejected $2.6 billion hostile offer from the hedge fund investor Carl Ichan.

Foot Locker, Inc. ((FL)) rose 11 cents to $29.63 after the athletic footwear and apparel retailer reported fourth quarter sales grew to $1.50 billion from $1.39 billion in the same quarter last year. Net income in the quarter increased to $81 million or 53 cents per diluted share compared to $57 million or 36 cents per diluted share in the year ago.

For 2011 sales increased to $5.62 billion from $5.01 billion in last year. Net income for the year rose to $278 million or $1.80 per diluted share compared to $169 million or $1.07 per share in the prior year.

Overstock.com, Inc. ((OSTK)) declined 13.7% or 93 cents to $5.95 after the online retailer reported fourth quarter revenue decreased 10% to $314.1 million from $348.9 million in the same quarter last year. Net loss in the quarter narrowed to $3.4 million or 15 cents per diluted share compared to $14.9 million or 63 cents per diluted share in the year ago period.

Sara Lee Corporation ((SLE)) gained 4.8% or 99 cents to $21.38 after the food processing company said it will spin off its Coffee & Tea business and list it on an exchange in Amsterdam that may be valued as much as $4.55 billion and shareholders will receive a special dividend of $3 a share.