BlackBerry Appeal Rejected

Elena
23 Jan, 2006
New York City

Ford Motor was in the focus Monday morning as it brought enough optimism to revive market sentiment after Friday''s selloff. The company posted better-than-anticipated earnings which counteracted the quarterly decline of Bank of America. The bank posted Q4 2% profit decline on loan losses and weak trading results. Bear Stearns raised its rating on Internet media company Yahoo to outperform from peer perform. UBS cut Citigroup to neutral from buy.

U.S. MARKET AVERAGES

Bargain-hunting helped stocks recover from Friday’s biggest loss in three years with the Dow down 2% and the Nasdaq falling 2.4%. A strong earnings report, followed by an extensive restructuring announcement, released by Ford helped encourage buyers back into the market after the Dow Jones industrial drop of 213 points last Friday. The industrial average steadily advanced in the morning to post a gain of about 60 points, or 0.6%.

Ford Motor ((F)) posted Q4 profit increase on strength in its finance arm and the sale of its rental car unit Hertz Corp. Quarterly results exceeded analyst estimates. The company announced it would cut up to 30,000 jobs as part of a restructuring effort.

The financial sector disappointed investors after Bank of America ((BAC)), the No. 2 U.S. bank, posted Q4 2% decline in net profit, reflecting loan losses and weaker trading results. The quarterly results missed estimates.

Credit card and travel services company American Express Co. ((AXP)), a Dow component, is scheduled to report results after market close.

The broker/dealer sector advanced steadily in the morning to rise by 1.8%. The disk drive sector was also strong, posting a gain of 1.9%. The semiconductor sector advanced in late morning to show an advance of about 1%.

A few stocks set new 52-week highs on deal news. Remington Oil and Gas ((REM)) jumped to a fresh peak after it agreed to be acquired by Cal Dive ((CDIS)). The Sports Authority ((TSA))also climbed to a new high after it agreed to be bought by a group that included the company's senior management.

Dow component Intel ((INTC)) was the most notable decliner to reach a new 52-week low. Pilgrim's Pride ((PPC)) dipped to a fresh low on quarterly results. Kohl's ((KSS)) added to last-week weakness, moving to a new low.

In midday trading, the Dow rose 59.56, or 0.56%. The Standard & Poor's 500 index added rose 5.98, or 0.47%, and the Nasdaq composite index climbed 6.68, or 0.3%.

Bonds sold off as stocks rose, with the yield on the 10-year Treasury note rising to 4.39% from 4.35% late Friday.

MOVERS AND SHAKERS

Albertsons Inc. ((ABS)) agreed to be acquired by a group including grocery store operator Supervalu Inc ((SVU)) and drug store chain CVS Corp. ((CVS)) for $17.4 billion in cash and stock. Albertson’s stockholders will receive $26.29 in cash. The company’s shares rose 4.4%.
YAHOO ((YHOO)) was upgraded at Bear Stearns to outperform from peer perform. The stock gained 1.11%.

Citigroup ((C)) was downgraded at UBS to neutral from buy. The stock gained 1.1%.

The Sports Authority Inc ((TSA)) agreed to be acquired by private equity firm Leonard Green & Partners and members of the company''s senior management team for roughly $1.3 billion in cash and assumed debt. The deal values Sports Authority shares at $37.25 each and the transfer is expected to close in the second quarter. The company’s shares soared 20%.

Datawatch Corp ((DWCH)) reported Q1 earnings of $64,000, or a penny a share, on revenue of $4.7 million, missing estimates of 3 cents a share. The company’s shares dropped 26.4%.

The U.S. Supreme Court rejected Research In Motion’s ((RIMM)) appeal to reverse a lower-court ruling that found its BlackBerry wireless email device violated patents held by NTP Inc., a Virginia patent-holding firm. The case now moves to a federal district court in Virginia, where a judge will decide whether to reinstate an injunction against the U.S. sale of BlackBerries. RIM’s shares fell 2.6%.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks fell across the region, reflecting an oil price rise to $69 a barrel and cautiousness following the steep declines on Wall Street. The Nikkei recovered from earlier lows to close down 1.2%. Among other regional markets, Taiwan’s Weighted index dropped 1.7%, Hong Kong’s Hang Seng slipped 1.4%, and South Korea’s Kospi fell 1%.

European stocks finished weak but off intraday lows, supported by the strong opening of U.S. markets. The German DAX 30 finished flat at 5,349, the French CAC 40 dropped 0.45%, and London’s FTSE 100 fell 0.2%.

OIL, METALS, CURRENCIES

Crude oil prices retreated on Saudi Oil Minister’s assurance that there is enough supply to meet demand. Light sweet crude for March delivery fell 13 cents to $68.35 a barrel. Heating oil fell nearly 3 cents to $1.8420 a gallon. Gasoline slightly fell to $1.7974. Natural gas dropped 82 cents to $8.46. London Brent declined 55 cents to $65.88.

European gold prices declined after hitting fresh 25-year highs Friday. In London gold traded at $555.70, down from $559.80. In Zurich the precious metal traded at $558.25, down from $561.35. In Hong Kong gold fell $1 to close at $556. Silver closed at $8.92, down from $9.06.

The U.S. dollar traded lower against other major currencies. The euro was quoted at $1.2278, up from $1.2075. The dollar bought 114.64 yen, down from 115.40. The British pound was quoted at $1.7848, up from $1.7638.

EARNINGS NEWS

Ford Motor Co., ((F)), automotive company, reported Q4 earnings of 8 cents a share, up from 6 cents a share a year-ago, beating analyst estimate for a profit of penny a share. If not for a number of items, the company posted earnings from continuing operations of 26 cents a share, down from a year-earlier equivalent profit of 28 cents a share.

Bank of America Corp, ((BAC)), banking services, reported that its Q4 profit dropped to 93 cents a share, down from 94 cents a share in the year-ago period on costs related to its recent acquisition on credit card firm MBNA, increased provision expense and lower trading results. If not for merger and restructuring costs, it gained 94 cents a share, missing analyst estimate of $1.02 a share. The company earned $3.85 billion, or 94 cents a year ago in the year ago quarter. Quarterly revenue was $14.12 billion, up 3%.

Pilgrim''s Pride Corp., ((PPC)), chicken producer, reported Q1 net income fell 47% to 39 cents a share, down from 73 cents in the year-ago period on 1.8% lower sales. Sales dropped to $1.34 billion from $1.37 billion. The company cited weakness at its Mexico operations plus higher energy costs and lower sales prices for the decline.

Provident Financial Holdings Inc., ((PROV)), holding company, reported Q2 net income rose 67% to $1.23 a share, up from 77 cents a share in the year-ago period. In the latest period, the banking company sold a commercial office building, prompting an increase of 53 cents to earnings.

Energizer Holdings Inc., ((ENR)) batteries manufacturer, reported that Q1 profit was $1.77 a share, up vs. $1.60 in the year- ago period, topping analysts’ forecasts of $1.61 a share. Earnings included a 5-cent restructuring charge related to the company''s European supply chain. Sales for Q1 advanced to $882.4 million from $875.9 million in last year''s first quarter.

TD Banknorth, ((BNK)), banking services company, reported Q4 earnings of 32 cents a share, up from 12 cents a share in the year-ago period. Aside from non-recurring items, earnings would have been 62 cents a share, up from 59 cents in the same period last year and in line with the analyst estimate. Net interest income was flat with last year’s, while non-interest income fell to $60.1 million from $72.5 million.

Insteel Industries Inc., ((IIIN)), wire products manufacturer, reported Q1 net income of 81 cents a share, up from 54 cents a share in the year-ago period. Sales in Q1 advanced 12% to $83.5 million from $74.7 million.

Carpenter Technology, ((CRS)), specialty metals and engineered products producer, reported Q2 earnings of $1.65 a share, up vs. $1.28 a share in the year-ago period, topping analyst estimate of $1.60 a share. Revenue advanced to $345.7 million from last year''s $312.1 million as strength in the aerospace markets helped improve demand for alloys, titanium and ceramic materials.