U.S. Movers: Chicos, Manor Care, Benihana

123jump.com Staff
11 Apr, 2007
New York City

U.S. stocks stumbled after minutes from the Federal Reserve''s most recent meeting said more interest rate hikes might be necessary to curb inflation. Benihana climbed 5.9%. Manor Care gained 9% after the operator of nursing homes and rehabilitation centers announced it hired JPMorgan to explore strategic alternatives. Chicos rose 7% on 5% rise in same-store sales.

[R]2:30PM NY, U.S. Market Movers[/R]

Benihana Inc. ((BNHN)), which operates a chain of Japanese and sushi restaurants, said its same-store sales climbed 5.8% in its fiscal 2007 fourth quarter ended April 1. The chain said total restaurant sales rose 17.2% to $71.3 million from $60.8 million in the fourth quarter of fiscal 2006. Benihana said $5.5 million of its sales came from an additional week in the quarter. Temporary closures related to renovations hurt sales by $3.2 million in the quarter, according to the company. Shares climbed 5.9%.

Cell Therapeutics Inc. ((CTIC)) shares jumped 14.7% after the company received ""fast track"" designation from the Food and Drug Administration for the company''s Xyotax drug, a treatment of certain types of non-small cell lung cancer in certain women.

Chico''s FAS Inc. ((CHS)) shares climbed 7% after the clothing retailer posted solid March same-store sales. For the five weeks ended April 7, the Chico''s posted an increase of 5.2% in same-store sales and a 22% jump in total sales. Total sales rose to $191.2 million from $156.8 million a year ago.

Manor Care ((HCR)) Shares hit 8.9% after the operator of nursing homes and rehabilitation centers announced it hired JPMorgan as its exclusive financial adviser to explore strategic alternatives. Manor Care booked 2006 revenue of $3.61 billion and net income of $167.1 million.

Tractor Supply Co. ((TSCO)) shares climbed 10.5% after the retail farm and ranch store chain put first-quarter results above expectations and boosted its full-year guidance. The company sees first-quarter earnings of $4 million to $5.1 million, or 10 cents to 12 cents a share. The company said that revenue came in at $559.8 million. Looking ahead, Tractor Supply now sees full-year earnings of $2.49 to $2.56 a share, up from an earlier view of $2.45 to $2.52 a share. It now projects revenue of $2.7 billion to $2.75 billion, up slightly from an earlier forecast of $2.7 billion to $2.74 billion.

Tvia Inc. ((TVIA)) shares fell 5% after the chipmaker said that its audit committee had undertaken a review of stock option grant practices and related matters since the company''s initial public offering in 2000. Tvia said its review of the 2006 and 2007 fiscal years ended March 31 preliminarily determined that affected periods may extend beyond those originally indicated.

American Medical Systems ((AMMD)), medical device maker, shares fell 14.7% after the company said it will miss its first-quarter revenue forecast due to supply chain problems. The company said it would not meet its forecast of $113 million to $118 million in sales due to ""vendor quality issues"" and inventory shortages for several key products, including items related to female incontinence. American Medical Systems now expects $108.4 million in revenue and earnings of 5 cents to 7 cents per share for the quarter ended March 31.

Biolase Technology Inc. ((BLTI)), dental and cosmetic laser maker, warned it will post a first-quarter loss and lower-than-expected revenue. The company sees sales for the period ended March 31 coming in between $14.5 million and $15 million. In the fourth quarter, Biolase posted a $1 million profit and revenue of $19.8 million. Shares fell 16.7%.

Cell Genesys ((CEGE)), biotechnology company, said that it is selling 10.8 million shares of its common stock and warrants to buy 2.2 million shares through a registered direct offering. Proceeds are seen at $60 million, prior to deducting offering fees and expenses. Shares fell 12%.

Checkfree ((CKFR)) shares sank 6.3% after an analyst downgraded the electronic payments processor, saying it may lose part of a major contract from its largest client, Bank of America Corp. JMP Securities analyst David Scharf downgraded CheckFree to ""market outperform"" from ""strong buy"" and cut his price target to $42 from $48. Profit for CheckFree totaled $127 million, or $1.36 per share, for the year ended June 30. Profit from continuing operations totaled $1.29 per share.

E-Z-Em Inc. ((EZEM)), which makes gastrointestinal radiology products, said that its fiscal third-quarter profit fell 45% on tough comparisons to a prior-year quarter boosted by one-time gains and discontinued operations. For the quarter the company posted a profit of $2.4 million, or 22 cents per share, compared with a profit of $4.3 million, or 39 cents per share, for the same quarter in fiscal 2006. Earnings from continuing operations fell to $2.2 million, or 20 cents per share, compared with $2.4 million, or 21 cents per share, for the prior-year period. Revenue rose 4.6% to $33.6 million from $32.1 million in the year-ago quarter. Shares fell 9.5%.

Genaera Corp. ((GENR)) said its board of directors approved a plan to lay off roughly 30% of its work force over the next three months and refocus the company''s drug research activities. Shares fell 9.3%.

Mitcham Industries Inc. ((MIND)), which supplies seismic equipment to the oil industry, said that its fourth-quarter net earnings declined to $730,000, or 7 cents per share, compared with $4.62 million, or 45 cents per share, in the year-ago period. Revenues climbed to $11.1 million against $10.1 million in the same period last year. The company expects revenue for its fiscal year ending Jan. 31, 2008, to range between $55 million and $60 million. Shares tumbled 10.9%.

SoftBrands Inc. ((SBN)) tumbled 16.4% after the software maker warned that second-quarter results would be lower than expected. The company now sees revenue of $20.5 million to $21 million, below its earlier view of $24 million. SoftBrands said that it expects to post a larger operating loss. Previously, the company had said that it would lose about $1 million. SoftBrands plans to report second-quarter results on May 15.


[R]1:00AM NY, 5:00PM Frankfurt - European stocks turned down ahead of Fed Reserve meeting.[/R]
European stock markets finished in the red on Thursday, pressured by cautiousness on Wall Street ahead of a speech by Fed Reserve Chairman Bernanke. The downward trend was also contributed by IMF after it lowered its global growth forecasts. European metals stocks traded mixed, with mining giants Rio Tinto and BHP Billiton losing ground but Xstrata rising 0.8%. Xstrata said it agreed to sell aluminum assets to private-equity firm Apollo Management for $1.15 billion in cash. Oil companies helped to limit losses, as crude-oil prices kept above $61 a barrel. Shares of BP added 0.9%, Total gained 0.7%, Repsol shares rose 1.1% in Spain and OMV climbed 1.4% in Austria. U.K. property companies were also under pressure after Lehman Brothers downgraded British Land, Land Securities, Hammerson , Slough Estates and Brixton. In other broker news, shares of France''s PPR fell 2.1% as J.P. Morgan downgraded the luxury-goods retailer, saying the company''s bid for German sportswear maker Pumaleaves valuations and debt stretched. Puma''s shares rose 1.8%. The U.K.''s FTSE 100 closed down 0.1% at 6,413.30, the German DAX Xetra 30 lost 0.2% at 7,152.83 and the French CAC-40 fell 0.3% to 5,751.92


[R]11:30AM U.S. market averages further dropped on weak gasoline stockpiles.[/R]
U.S. stock market averages moved further to the downside after the U.S. government reported the ninth straight weekly drop in the nation''s gasoline, raising concerns about supplies ahead of the peak driving season. The energy report sent the Dow Jones nearly 80 points lower. The leading drags on the blue-chip average included General Motors Corp. ((GM)), down 2.2%, IBM ((IBM)), falling 1.3%, Caterpillar Inc. ((CAT)), losing 1.1%, Citigroup Inc. ((C)), down 1.8%, and Dupont ((DD)), down 1%. Among biotech stocks, Amgen ((AMGN)) lost 0.3%, while Vertex ((VRTX)) and InterMune ((ITMN)) moved notably lower, down 2.5% and 1.7% respectively. Some health insurance stocks also came under pressure. Health Net ((HNT)) helped to lead the sector lower, falling 3% after Merrill Lynch downgraded its rating on the company''s stock to neutral from buy, citing valuation.

Housing, technology, and defense stock also posted weakness. Housing stocks declined on concerns about the outlook for the housing market. Hovnanian ((HOV)) slipped 2.3%, Pulte Homes ((PHM)) dropped 2.4%, and Meritage Homes ((MTH)) lost 2.1%, standing out as some of the sector''s worst performances. At the same time, notable strength was visible in the gold sector, as the price of the precious metal extended recent advance. In late morning trading, the Dow fell 78.18, or 0.62%, to 12,495.67, after dropping by as many as 102 points. The Standard & Poor''s 500 index slipped 6.87, or 0.47%, to 1,441.52, and the Nasdaq composite index fell 14.57, or 0.59%, to 2,463.04. Bonds rose moderately as stocks moved lower. The yield on the benchmark 10-year Treasury note fell to 4.71% from 4.72% late Tuesday.


[R]9:45AM U.S. markets opened lower ahead of FOMC minutes.[/R]
U.S. stock markets opened in the negative, as cautiousness ahead of a speech by Fed Reserve Chairman Bernanke and the release of the FOMC minutes offset the positive sentiment, generated by upbeat earnings from Alcoa and job cuts at Citigroup. Alcoa ((AA)) shares rose 1.4% after it posted a 9% rise in Q1 profits and an upbeat outlook for the year. Aluminum Corp. of China ((ACH)) climbed 5.9% in early trading. Citigroup ((C)) lost 1% after it announced plans to reduce 17,000 jobs worldwide. Among notable movers, Biolase Tecnology, ((BLTI)), dental and cosmetic laser maker, warned it will post a Q1 loss and lower-than-expected revenue. Company''s shares tumbled 24%. American Medical ((AMMD)) dropped 13.3% after the company said it will miss its Q1 revenue forecast due to supply chain problems.

Retail companies attracted some attention, as some of them reported sales figures on Wednesay morning. Target ((TGT)) posted 12% increase in March same-store sales, in line with previous estimates. The retailer added April same-store sales are expected to drop 2% to 4%. The stock lost 0.7%. Chico''s FAS Inc. ((CHS)) rose 4.6% after it said that comparable sales rose 5.2% in March compared with the year-ago period. Total sales for the five-week period ended April 7 increased 22%. Most retailers are due to release their March sales data on Thursday morning. Retailers are generally expecting strong growth in same-store sales, helped by earlier Easter and warmer-than-normal weather in parts of March. Wal-Mart Stores ((WMT)) projected that same-store sales for the period would be up 1% to 2%. In the first hour of trading, the Dow Jones industrials fell 20.64, or 0.16%, to 12,553.21. The Standard & Poor''s 500 index slipped 2.51, or 0.17%, to 1,445.88, and the Nasdaq composite index fell 6.35, or 0.26%, to 2,471.26. The yield on the benchmark 10-year Treasury note remained flat at 4.72% from late Tuesday.


[R]9:30AM London equities traded higher on Wednesday on M&A talks[/R]
The UK market was higher on Wednesday. By mid-day, the FTSE 100 was 0.2 5 higher at 6,432.6, an advance of 15 points.

Advancers

Retailers were at the centre of activity on fresh speculation that Marks & Spencer could be the next target of a bid from private equity. Shares in the company were 3.1% stronger. The plans of Xstrata to sell its aluminium operations for $1.2 billion sent shares in the miner 2.3% higher. Royal Dutch Shell added 0.7% after it announced it would settle legal claims from investors outside the US about its oil reserves restatement controversy in 2004.

Decliners

On the downside, five large-cap constituents traded ex-dividend, taking around 3 points off the senior index. Friends Provident lost 3% and Prudential fell 1.3%. Hammerson was 2.4% weaker, Kazakhmys was 3.7% softer and BG Group was 0.2% lower. Water utility Kelda fell 1.5% after HSBC reduced the bank price target on the stock.


[R]9:15AM Asian markets advanced on Wednesday with Japan leading the markets higher.[/R]
Asian markets finished higher on Wednesday. The benchmark Nikkei 225 index rose 5.38 points, or 0.03%, to finish at 17,670.07. Advancers included Canon, gaining 1.07% and Eisai, rising 0.51%. TDK also rose 1.8% on a report Wednesday that the electronic-parts maker is likely to have released a record group net profit for the year ended March.

The Hang Seng Index also gained 101.56 points, or 0.5%, to 20,449.43. Large-cap HSBC added 0.4% as fears of U.S. subprime exposure were allayed. China Mobile advanced 0.4% after JP Morgan recommended in a research note that investors should buy China Mobile on strong fundamentals and take profits on China Unicom. China Unicom fell 0.7%.

South Korean shares advanced to a record high led by LG.Philips LCD. The Korea Composite Stock Price Index added 14.26 points, or 1%, to 1,513.42. LG.Philips LCD surged 8.2% on hopes for better earnings in the second quarter. Other technology stocks also advanced including Samsung Electronics, the largest corporation of South Korea, which rose 3.6%.

In China, the Shanghai Composite Index, which tracks both Class A and Class B shares, closed up 1.5% at 3,495.22. The Shenzhen Composite Index gained 1.1% to 928.28, its eighth-consecutive record finish. Among large-caps, China Vanke gained 6.6% and China Merchants Bank jumped 6.3%.

Elsewhere in the region, Taiwan gained, boosted by a strong showing in electronic stocks. The Weighted Price Index of the Taiwan Stock Exchange gained 22.85, or 0.3%, to close at 8,071.24.


[R]9:00AM Alcoa earnings lead market to higher opening.[/R]
Wall Street looked poised for higher opening on Wednesday before the release of last FOMC minutes. The pre-market sentiment was boosted by better-than-expected quarterly figures released by Alcoa and cost-reduction moves by Citigroup. Shares of Alcoa ((AA)) rose 2.2% in pre-open trading after the Dow industrials component kicked off Q1 earnings season by exceeding earnings and revenue forecasts. The aluminum producer posted earnings of 79 cents a share on $7.9 revenue increase, topping expectations of earnings of 76 cents a share and revenue of $7.6 billion. Other companies due to report Q1 results today include Bed Bath & Beyond ((BBBY)), biotech Genentech ((DNA)) and BlackBerry maker Research In Motion ((RIMM)).

Chevron ((CVX)) said it expects results in the quarter to benefit from a $700 million gain on the sale of its interest in manufacturing assets in the Netherlands. Again on the Dow, Citigroup ((C)) added 0.9% after the financial services giant said it will cut 17,000 of its global workforce in an attempt to save $4.6 billion a year by 2009. In corporate news, the Nasdaq Stock Market ((NDAQ)) is reportedly in talks to buy Philadelphia Stock Exchange. Costco Wholesale ((COST)) lifted its quarterly dividend 12% to 14.5 cents a share. S&P 500 futures rose 1.30 points to 1,457.30 and Nasdaq 100 futures improved 3.50 points to 1,833.00. Dow industrial futures rose 18 points to 12,650.


[R]8:30AM Citigroup said it will cut 17,000 jobs.[/R]
Citigroup ((C)), the U.S. biggest financial institution, announced Wednesday it will reduce its work force by about 17,000 jobs as part of a restructuring plan aiming at lower costs and improved profit. The job cuts correspond to about 5% of the bank''s 327,000-strong work force. The anticipated changes include elimination of layers of management, expanding centralized procurement, consolidation of some back-office, middle-office and corporate functions to eliminate duplication. The bank said in a statement that the overhaul will save the bank about $2.1 billion in 2007, $3.7 billion in 2008 and $4.6 billion in 2009. Citigroup expects to record a pretax charge of $1.38 billion in Q1 of 2007, and additional charges of nearly $200 million pretax over the subsequent quarters of 2007. The bank is due to report its Q1 earnings next week.


[R]8:00AM NY-7:00PM Mumbai Sensex ends flat in range-bounf trade, small-caps, mid-caps advance.[/R]
The Sensex on BSE finished 6.30 points, or 0.05%, lower at 13,183.24. Trade was extremely range-bound today as the index traded in a narrow range of 60-odd points, from 13,190 to 13,250 for the major part of the session. The market-breadth was strong as there were three gainers for every two decliners. For 1,532 stocks that advanced, 1,038 declined and 63 remained unchanged. Of the 30 stocks in the Sensex 14 advanced, while the rest declined. The turnover on BSE was Rs 3,847 crore, lower than Rs 4,201.83 crore on Tuesday. On NSE, the turnover was Rs 7,984.1 crore, also lower than Rs 8441.09 crore on Tuesday.

Economic news

The four leading members in the Doha Round of global trade talks are holding bilateral meetings before a new attempt is made to save negotiations, although none of the countries have great hopes for a breakthrough. This is the first time trade ministers of the G-4 trading powers - India, Brazil, the United States and the European Union have gathered for talks since the Doha discussions ended fruitlessly last July when Washington was unwilling to yield more ground in reducing farm subsidies.

The second largest public sector lender in the country, Punjab National Bank, has decided to raise its Benchmark Prime Landing Rate by 75 basis points to 13%. Other banks such as State Bank of India and Bank of Baroda had also increased their prime lending rates to 12.75% and 13.25% respectively.

According to information from the industry sector domestic car sales in the financial year that ended March 31 increased 22% from the year before to 1,076,408 from 882,208 in 2005/06.

IPO

Gremach Infrastructure Equipments & Projects ended at Rs 83.95, a discount over IPO price of Rs 86. The stock had debuted earlier today at Rs 92 on BSE. It reached a low of Rs 80.70 and high of Rs 100.

Trading highlights

Indiabulls Real Estate was the most-active stock with a turnover of Rs 190 crore followed by Indiabulls and MindTree.

Advancers

Hindalco was the top gainer today, soaring over 4% to Rs 142 on high volumes of 16.88 lakh shares. India’s largest private sector steel manufacturer Tata Steel followed with gain of 3.3% to Rs 512. Reportedly, Tata Steel is likely to launch a rights issue of nearly Rs 3,500 crore to part-finance its $12.15 billion acquisition of Anglo-Dutch steelmaker Corus Group, payment for which is to be made today. The issue is likely to be priced at around Rs 400 a share. Other metal stocks like Hindustan Zinc, Jindal Saw Pipes, Jindal Steel also gained between 3% and 6%.

BHEL was another stock that performed well, up 1.2% to Rs 2,493.40. Bharti Airtel finished over 1% higher at Rs 773, while Cipla advanced slightly more than 1% to Rs 236.1. Index heavy Reliance Industries edged higher 0.38% to Rs 1,387.05 on 4.42 lakh shares. It surged to a high of Rs 1,398.

Decliners

Pharma shares declined on intense selling pressure. Ranbaxy Laboratories lost 3.5% to Rs 345.30, leading the decliners. Dr Reddy’s shed 2.6% to Rs 701.25.

Cement stocks finished also lower. ACC lost 2% to Rs 731.7 Gujarat Ambuja Cements declined 1.3% to Rs 107.9. Other decliners included HDFC and Reliance Communications down around 1.5% each to Rs 1,583 and Rs 413, respectively.

IT large-cap Infosys Technologies declined 0.41% to Rs 1,190, after reaching a high of Rs 2,038, ahead of its Q4 March 2007 results, due on Friday, April 13, 2007. Satyam Computers also lost 0.8% to Rs 441.6.


[R]6:30AM European markets were higher on Wednesday with oil stocks leading the advancers[/R]
European markets advanced in mid-morning trade on Wednesday. Frankfurt was up 0.3% at 7,184.42, while the CAC 40 in Paris gained 0.2% to 5,778.51 and London FTSE 100 was 0.2% higher at 6,427.6.

Advancers

Royal Dutch Shell was an important advancer as announced it was to pay $352.6 million, including administrative costs, to settle claims lodged by European and other non-US investors related to the shock reserves downgrade of the company in 2004. Relief that the company had now put the episode behind it supported the shares rally of 0.9%.

Other companies jumped on Royal Dutch Shell’s bandwagon and also advanced. Total of France gained 0.9%, Austrian OMV added 1.3% and Norwegian Statoil climbed 0.9%.

The fashion retailer Hennes & Mauritz climbed 1.4% after the company announced it could increase efficiency and maintain the gross profit margin of nearly 59%.

Decliners

Another french fashion group, PPR, shed 2.1%, though, following Tuesday announcement it was bidding $7.1 billion for German sportswear maker Puma. JPMorgan cut its rating on PPR from overweight to neutral and lowered its price target.

Oil and precious metals

Crude oil traded near $62 a barrel in New York on speculation U.S. stockpiles of gasoline dropped for a ninth week. Crude oil for May delivery was up 5 cents at $61.94 a barrel in after-hours electronic trading on the New York Mercantile Exchange in early trade in London. Brent crude for May settlement gained 29 cents, or 0.4%, to $67.71 a barrel in electronic trading on the ICE Futures exchange in London.

Silver rose for a third consecutive day on increased demand for industrial metals. Gold was little changed after surging 1.1% yesterday. Silver for immediate delivery climbed 4.5 cents, or 0.3%, to $13.92 an ounce in early trade in London. Gold gained 43 cents to $678.32 an ounce after adding $7.15 yesterday. Palladium dropped $1.50 to $359.50 and platinum fell 50 cents to $1,263.

Currencies

The dollar was mixed against other major currencies in European trading Wednesday morning. The euro traded at $1.3426, up from 1.3424. The British pound was at $1.9779, up from $1.9716. The dollar bought 119.25 Japanese yen, up from 119.12