Michael Fowlkes
Chapel Hill, NC - http://www.investorsobserver.com
Michael Fowlkes is an options analyst and writer at Investors Observer.
Exxon Mobil (XOM) hits new 52-week low as oil continues to fall
Shares of Exxon Mobil (NYSE: XOM) fell to set another fresh 52-week low today, as oil continues to fall.Shares of Exxon have traded down as low as $58.30 earlier in the session, and headed into the afternoon session, the stock has rebounded a bit, but is still trading down 8.7% to $62.20, down $5.80 on the day.
It's been a tough week for the stock, which is now down around 21% from its close last Friday.
As recession fears continue to spread, oil has been moving steadily lower, and once again today the precious crude is down, falling another $5.82 a barrel to $80.77, and was under the psychological $80 earlier in the day, trading all the way to $78.61 earlier in the session.
Continue reading Exxon Mobil (XOM) hits new 52-week low as oil continues to fall
Pending home sales rise in August
With all the negative news that we have seen lately, it's nice to hear one piece of positive news regarding the housing market. We got that today on news that pending home sales rose unexpectedly in August.The National Association of Realtors tracks home sales in its index, and reported today that its pending home sales index rose from 87 in July up to 93.7 in August. Going into today's report, analysts had been expecting to see the index actual fall, and were thinking that we would see the number drop down to 86 in the month, so the increase was definitely a bit of good news in an otherwise rocky market.
The areas of the country that saw the best jump in July were the same ones that have been beaten up the most over the past year, including California, Nevada, Florida, and Arizona.
Continue reading Pending home sales rise in August
Get ready for the BlackBerry Storm 3G
Research in Motion Limited (USA) (NASDAQ: RIMM) announced today the launch of a new touch screen BlackBerry, which will go under the name of the Storm 3G.The move comes as the company tries to make another big step in gaining market share in the consumer segment. For most of the BlackBerry's existence, the phone has been regarded as mainly a device for professionals, but RIMM has been trying to break that reputation, and is banking on the fact that its newest touch screen will help move the company in that direction.
All of the major mobile phone makers have been scrambling to keep up with the mania that Apple, Inc. (NASDAQ: AAPL) created last year when it released its iPhone, and then again this year when that mania spiked once more with the release of the upgraded iPhone 3G.
Continue reading Get ready for the BlackBerry Storm 3G
Alcoa (AA) to open lower following weak earnings
The current earnings season officially got under way last night as Alcoa (NYSE: AA), the first DOW stock to report, released its third quarter numbers, and the results were not too pretty. Going into last night's earnings release, analysts had been expecting Alcoa to earn 53 cents per share in its third quarter, but the company reported much lower actual numbers -- 33 cents per share for the quarter, or $268 million. Weak demand, coupled with falling aluminum prices were the main culprits during the quarter.
During the same period last year, the company showed earnings of 63 cents per share, or $555 million.
Since hitting an all time high in July, aluminum prices have been pulling back sharply over the past few months, and have dipped around 32% from the highs set over the summer.
The company also announced that it would be trying to preserve its cash by suspending its stock buyback plan. Previously, the company had approved a 25% buyback of its outstanding stock, and had already purchased 12%, but will stop the buying for the time being.
Shares of the company are trading down a little over 3% this morning in the premarket.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
If nothing else, gasoline prices are falling!
It seems like there is always something to worry about these days. Over the summer, the economy was showing signs of what was to come, but the main concern on most of our minds was not the overall economy. Instead, we were worried about the $4 gasoline that we were pumping into our cars. Now, the tables have turned, and all we are thinking about is the crashing economy. But at least we can take a little pleasure out of the fact that gas is falling, and should continue to drop.
It wasn't that long ago that we were feeling the full brunt of record high gasoline prices. It was July 17, in fact, when the national average hit its peak of $4.114 a gallon. While prices are still running at historically high levels, they have come well off their summer highs, and are currently sitting at an average of $3.48 a gallon nationwide for regular unleaded. A pretty nice pullback, to say the least.
Continue reading If nothing else, gasoline prices are falling!
Safeway (SWY) misses, but still gets rewarded on Wall Street
When a stock comes in with earnings under analyst estimates, it usually gets punished. But in today's market any positive news is enough to keep shares in the green, and that is what we are seeing today with Safeway (NYSE: SWY) which is up strongly despite missing estimates for its third quarter.
First, let's get the bad news out of the way. Going into this morning's earnings announcement, analysts had been looking for earnings of 47 cents per share, but the company's actual earnings missed by a penny, with a reported 46 cents a share. With today's market environment, that in and of itself could have been enough to send shares crashing, but instead the stock is actually trading up 5.6% to $23.00, and earlier in the day was up as high as $23.75. Sounds crazy, but there is some good news to follow.
What the market is really interested in now is a company's forward looking estimate. Here the company showed real strength, and stood by its full year forecast of $2.25 to $2.35. Revenues during its third quarter were also strong, as the company showed revenues of $10.17 billion, verses estimates of $10.08 billion.
Continue reading Safeway (SWY) misses, but still gets rewarded on Wall Street
General Motors (GM) suspends work in European factories
For Detroit automaker General Motors (NYSE: GM) the tough times are being felt outside of the United States as sales declines in Europe are forcing the troubled manufacturer to suspend production at some European factories.As the financial crisis that is being felt in America continues to spread, demand for autos outside of the country are also feeling the pressure, and in August, sales in Europe fell by 16%. As a result, General Motors has decided that it needs to reduce its 2008 production by about 40,000 vehicles by the end of the year.
To accomplish this production shift, the company is going to be shutting down several factories for a few weeks. Starting next week, GM's factory in Eisenach, Germany, where the company produces its Opel brand, is going to start a three-week shut down period. This news comes as another of the company's factories, one in Bochum, Germany is completing a current two-week shut down period to help reduce the company's inventories. Other temporary shut downs are taking place in England and Spain.
Continue reading General Motors (GM) suspends work in European factories
Ford (F) sales plummet in September
September proved to be yet another tough month for American auto maker Ford Motor Company (NYSE: F) as the company saw its U.S. sales drop by a massive 34% during the month.The company noted that we are in the middle of an "atmosphere of caution" as the troubled economic environment, and tightening credit conditions are still taking their tolls on the automotive industry.
We will hear more troubling news later today as more auto makers release their September numbers, and analysts are expecting to hear more of the same from the other major names in the industry. Fellow Detroit auto maker General Motors Corporation (NYSE: GM) is expected to announce sales dropping around 27%, while Japanese maker Toyota Motor Corporation (NYSE: TM) is expected to show a sales decline of around 17%.
Today's news from the major names should really come as no surprise, since we have been hearing much of the same through most of the year. Through August, nationwide sales of vehicles was down 11.2%.
As consumers continue to express their concerns over the overall economy it is going to continue to be tough for car dealers to get shoppers into their showrooms. Bigger incentives should help a little, but until consumers start to turn more positive on the overall economy, it is going to be tougher and tougher to sell them new cars.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
Drivers getting a little relief at the pump
One of the main things that was on most of our minds this summer was the record high gasoline prices that gripped the nation. While prices are still very high on a historic basis, the past month has seen a nice drop in prices, and given drivers a bit of relief when they pull into their local gas stations.According to AAA, gasoline prices fell again today, currently down to $3.683 a gallon for regular unleaded, still pretty high, but much lower than what we were seeing in the middle of summer.
Prices set a high on July 17, with the national average for gasoline going for $4.114 a gallon. While we are all relieved to see prices off their highs, they are still well above where they were at this time last year, when the national average was down at $2.81 a gallon, 31% lower than the current price.
Continue reading Drivers getting a little relief at the pump
August home sales highlight an already rocky housing market
As Washington tries to come up with an agreement on how to solve the current economic crisis, we received more information today on just how bad things are getting, as figures show new home sales were very weak during the month of August.As the credit crunch and falling home values continue to apply pressure to an already weak housing market, the Commerce Department announced today that new home sales in August fell by a sharp 11.5% in August, resulting in a seasonally adjusted sales rate of 460,000 new homes. To find the last time we saw a rate this low, we would have to look all the way back to January of 1991.
As always, Wall Street likes to compare actual numbers to estimates. Had economists been expecting to see a 10% or greater drop in new home sales, that would be one thing, but that was not the case. Going into today's report, economists were expecting to see new home sales fall, though not nearly the 11.5% actual rate, but a much smaller drop of only 1% in the month. So today's reported sales figures are definitely going to add to the confusion that many are feeling regarding the housing market.
Continue reading August home sales highlight an already rocky housing market
Nike (NKE) jumps after hours following Q1 earnings
Shares of sports shoes and apparel giant Nike (NYSE: NKE) are trading up over 5% after hours today, following strong earnings for its fiscal first quarter. As I noted in my earnings preview earlier this week, Wall Street was looking for 92 cents earnings per share for Nike's first fiscal quarter. The company surprised to the upside with a reported EPS of $1.03 a share. While this is down year-over-year from the $1.12 EPS it reported last year in the first quarter, it was still a good quarter considering the current economic environment.
Revenues grew nicely for Nike in the quarter, up a very respectable 17% to $5.4 billion. This also came in above analyst estimates of $5.19 billion.
One aspect of the company's overall business I discussed in the preview was that last quarter the company was able to overcome weak U.S. sales numbers by posting strong growth in international markets. This quarter, too, a weak U.S. dollar has helped boost sales in India and Asia, in particular China, where the recent summer Olympic games were held.
Continue reading Nike (NKE) jumps after hours following Q1 earnings
Berkshire takes big stake in Goldman Sachs
The market has been waiting for billionaire investor Warren Buffet's investment company Berkshire Hathaway (NYSE: BRK.A) to invest in a financial firm, and Buffet announced yesterday that he would invest $5 billion in Goldman Sachs (NYSE: GS). The $5 billion will be used to purchase perpetual preferred stock bearing a 10 percent annual interest rate.
The move comes as Goldman is looking to raise $7.5 billion worth of fresh assets. In addition to the initial $5 billion investment, Berkshire also will be receive warrants to purchase an additional $5 billion worth of common stock in the company for $115 a share. The stock closed yesterday's trading at $125.05, and has jumped nearly 7% in after hours trading following this afternoon's announcement.
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Home prices take another dip in July
More bad news for the housing market today, as the Federal Housing Finance Agency announced that home prices in July were 5.3% lower than they were in July of last year. The main culprits leading to lower July prices are, as usual, the large supply of homes available, tighter lending standards, and record foreclosures, that have resulted in sellers slashing prices in order to sell their properties. On a month to month basis, prices fell 0.6% from June to July of this year.
The drop in prices was seen universally in all regions. The only area of the country that saw prices rise on a year over year basis was the West South Central regions.
The credit crisis over the past year has already claimed a couple big name companies, and prompted the Bush administration to suggest a $700 billion bailout for the financial industry.
Continue reading Home prices take another dip in July
Nike (NKE) first quarter earnings preview
Wednesday afternoon following the market close, Nike Inc. (NYSE: NKE) will be reporting its fiscal first quarter earnings, and analysts are looking to see the company show earnings for the quarter of 92 cents per share.The last time that the company reported was back on June 25, when it was able to beat out Wall Street estimates by two pennies, with a reported 98 cents per share for its fiscal fourth quarter, mostly a result of strong international demand, which was able to overcome weak consumer spending that hurt the company at home in the U.S. In fact, to find the last time that the company reported quarterly figures under Wall Street estimates, you would have to go all the way back to its fiscal fourth quarter 2006 when it missed by a penny, with a reported 70 cents per share.
On a year over year basis, should Nike come in with 92 cents per share, it would be a 16.9% drop from the $1.12 that it was able to earn during the first quarter of 2007.
Continue reading Nike (NKE) first quarter earnings preview
Google (GOOG) extends lead in search engine market
For a long time now, when it comes to search engines, Google Inc. (NASDAQ: GOOG) has been the king of the hill, and a new survey shows that Google extended its lead once again during August, taking valuable traffic away from its main competitors Yahoo (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT).According to comScore, Google increased its dominance during August by attracting 63% of all search engine traffic, up from 61.9% during the month of July. comScore's data was based on 11.7 billion searches in the month, and shows that Yahoo and Microsoft are still unable to tap into the valuable search engine traffic that Google maintains.
Yahoo scored a very distant second place, with 19.6% of all search engine traffic. This was a drop of 0.9% from its July figures. Third place goes to Microsoft, who scored 8.3% of search engine traffic during the month, down 0.6% from the previous month.
Continue reading Google (GOOG) extends lead in search engine market
'Crash-and-burn economy?' 'Bailout beer bust?' What should we call America's economic disaster?
Yogi is right: Ninety percent of this (economics) game is half-mental
Is the market always right?
