Macy's, Tesoro Rise; Newell Rubbermaid Falls

123jump.com Staff
17 Dec, 2008
New York City

Of the stocks in S&P 500 index, 264 rose, 233 declined and 3 were unchanged. Macys led gainers in the index with a surge of 14% after it renegotiated terms of its bank debt. Tesoro gained on a fall in crude oil price below $40 a barrel.

[R]5:10PM New York – U.S. stocks traded lower a day after surging 4% on sharply lower than expected rate cut.[/R]

Of the stocks in S&P 500 index, 264 rose, 233 declined and 3 were unchanged.

Macy’s led gainers in the index with a rise of 14% followed by gains in Tesoro Corp of 12.9%, in Kimco Realty of 10.2% and in Limited Brands of 10%.

Newell Rubbermaid led decliners in the index with a fall of 27.6% followed by losses in Constellation Energy of 16%, in National City Corp of 8.3% and in Genworth Financial of 7.7%.

Other Movers

AAR CORP ((AIR)) dropped 3.0% or 41 cents to $14.99 after the services provider to aviation and defense industry said second quarter sales rose 14% to $353.6 million from $310.6 million a year ago. Net income in the quarter rose 10% to $19.73 million or 47 cents per diluted share compared to net income of $17.86 million or 42 cents per share a year ago.

Adobe Systems Incorporated ((ADBE)) declined 3.3% or $0.72 to $21.59 after the diversified software company said fourth quarter revenues rose 0.4% to $915.3 million from $911.2 million a year ago. Net income in the quarter rose 11% to $245.9 million or 46 cents per diluted share compared to net income of $222.2 million or 38 cents per share a year ago.

Apple Inc ((AAPL)) fell 6.4% or $6.04 to $89.47 after the computer and music device maker was downgraded at Oppenheimer to “Perform.” Steve Jobs will not appear at Macworld hosted on the West coast and Apple earlier this year pulled out of Macworld trade show on the East Coast. Steve Jobs weak health rumors made rounds on trading desk, however, calls to the company spokesperson were not returned.

BNP Paribas SA ((BNPQY)) lost 18.6% or $5.60 to $24.40 after the France’s largest bank said extreme market volatility triggered steep losses in its investment banking operations over the last two months. The company also has more than $1 billion in exposure to Bernard Madoff investments. Banco Santander, HSBC and Nomura investments have declared exposure to the alleged fraud at the investment firm.

Cadence Pharmaceuticals, Inc ((CADX)) rose 31% or $1.54 to $6.54 after the maker of drugs for hospitals announced positive results from Study 304, a Phase III clinical trial of Acetavance, the company's intravenous formulation of acetaminophen, for the treatment of acute pain and fever following abdominal laparoscopic surgery.

ConAgra Foods, Inc ((CAG)) surged 9.3% or $1.39 to $16.44 after the packaged food company reported second quarter sales rose 10.6% to $3.26 billion from $2.95 billion a year ago. Net income in the quarter fell 31.3% to $168.1 million or 37 cents per diluted share compared to net income of $244.8 million or 50 cents per share a year ago.

CIT Group Inc ((CIT)) decreased 3.3% or 14 cents to $4.51 after the global commercial said it expects to raise $1.5 billion in new regulatory capital. The firm also said it will raise $250 million through common stock offering.

The company in a press release noted that, “The Company does not believe that the failure to become a state member bank or a financial holding company will have a material adverse effect on its business or results of operations.

If CIT had been granted financial holding company status, it would have been allowed to engage in a broader range of financial services activities than those permitted for bank holding companies. Currently, almost all of CIT's activities are permissible for bank holding companies that do not have financial holding company status.”

Developers Diversified Realty Corporation ((DDR)) closed up 4% to $4.95 after dropping as much as 10.4%. The mall operator real estate investment trust said that it could not close an $890 million sale as expected this month on tight credit conditions. Separately, another mall operator REIT General Growth Properties is hoping to avert bankruptcy by renegotiating $900 million loans with its bank and debt holders.

Joy Global Inc ((JOYG)) climbed 14.3% or $3.17 to $25.83 after the mining equipment maker reported fourth quarter sales increase of 40% to $1.03 billion from $736 million a year ago. Net income in the quarter surged 69.5% to $118 million or $1.11 per diluted share compared to net income of $69.6 million or 64 cents per share a year ago.

Leggett & Platt, Inc ((LEG)) slid 5.7% or $0.91 to $14.62 after he largest supplier of furniture and bedding components, has cut its fourth quarter sales and earnings estimates. The company now says it expects earnings from continuing operations to be break-even to 15 cents per share, not including one-time charges compared to earlier estimate of 15 cents to 30 cents a share.

Lindsay Corporation ((LNN)) plunged 8.6% but closed up 2.3% or $0.90 to $39.24 after the provider of irrigation systems and infrastructure products reported first quarter revenues rose 49% to $113.1 million from $75.9 million a year ago. Net income in the quarter rose 43% to $6.3 million or 51 cents per diluted share compared to net income of $4.4 million or 36 cents per share a year ago.

Macy’s Inc ((M)) surged 14% or $1.54 to $10.01 after it said that it has amended terms of $2 billion in credit agreement led by Bank of America and JP Morgan. The credit limit will not be revised but the leverage covenant will be based on debt to EBITDA instead debt to capitalization. In addition, the interest coverage ratio will be lowered to 3.0 from 3.25 and the retailer agreed to pay higher fees and charges.

The company also noted that it has no current borrowing against this facility and its peak requirements in fall season 2008 were $163 million compared to $1 billion in 2007. The borrowings in the peak season are repaid by the company. The company did not clarify why it agreed to pay higher fees when it should be looking for ways to save cash in this troubled times.

Morgan Stanley ((MS)) fell as low as $14.80 but closed up 5% or 82 cents to $16.95 after the global financial services firm reported fourth quarter revenues rose 350% to $1.8 billion from $0.4 billion a year ago. Net loss in the quarter was $2.30 billion or $2.34 per diluted share compared to net loss of $3.59 billion or $3.61 per share a year ago.

Newell Rubbermaid Inc ((NWL)) dropped 27.1% or $3.60 cents to $9.58 after the manufacturer of consumer and commercial products lowered its fourth quarter normalized earnings to a range between $0.06 and $0.10 a diluted share, compared with previous guidance of $0.29 to $0.34 per diluted share.

For the full year 2008, the company expects normalized earnings of between $1.17 and $1.21 per diluted share, compared with previous guidance of $1.40 to $1.45 per diluted share.

VeriFone Holdings, Inc ((PAY)) gained 14.6% or 57 cents to $4.48 after the electronic payment technology provider said fourth quarter revenues rose 3% to $244.7 million from $237.9 million a year ago. Net loss in the quarter was $362.5 million or $4.30 per diluted share compared to net income of $18.9 million or 22 cents per share a year ago.