A positive housing report sent stocks higher today, but investors remained cautious as Japan’s credit rating was downgraded by Fitch on fears over government debt. The National Association of Realtors is reporting a 3.4 percent increase in existing home sales in April to an annual rate of 4.62 million units, which is better than economists expected.
This is what’s in the news for Monday May 21, 2012. The Wall Street Journal reports Irvin Goldman, the JPMorgan (NYSE:JPM) chief risk officer who oversaw risk management at the unit responsible for trading blunders that cost the bank at least $2B this year, earlier lost millions while trading for the same unit, sources say. Reuters reports newly issued shares in Facebook (NASDAQ:FB) may have a difficult time this week if lead underwriter Morgan Stanley (NYSE:MS) stops supporting the stock and managers lower down in the IPO book decide to get out. Reuters also reports London-based Mint Partners, acquired by interdealer broker BGC Partners (BGCP) in 2010, is expanding into energy brokerage in Asia by starting a middle distillates broking desk in Singapore next month, sources say. Bloomberg reports bond traders are lowering expectations for U.S. inflation by the most since December, providing Fed Chairman Ben Bernanke the scope for additional stimulus as the central bank’s current effort winds down. Bloomberg also reports oil prices gained for the first time in seven days in New York after China said it would boost the nation’s economy and Goldman Sachs (NYSE:GS) said the balance between supply and demand of crude is tightening.
Ralph Lauren Corporation (RL) announced its quarterly dividend of 40 cents per share, an increase of about 100% over its prior dividend in March of 20 cents. The company also reported better-than-expected fourth quarter earnings.
In trading on Tuesday, general contractors & builders shares were relative leaders, up on the day by about 2.7%. Leading the group were shares of Desarrolladora Homex S A DE (HXM), up about 4.3% and shares of Pultegroup (PHM) up about 4% on the day.
Best Buy (BBY) announced that profit fell to $158 million, or 46 cents per share, versus $212 million, or 53 cents per share, in the same period last year. Revenue increased to $11.61 billion from $11.37 billion in the same period last year.
Avon Products (NYSE:AVP) was downgraded from Neutral to Sell at UBS today. The stock closed yesterday at $16.95 on volume of 9.4 million shares, below average daily volume of 10.9 million.According to Money Watch analysts, Avon is currently struggling with past business scandals where they were accused of foreign bribery. Whether or not the scandals are founded in truth, almost doesn’t matter as their stock price-point continues its long and steady decline. But some analysts are looking ahead and wondering: if Avon cannot find an appropriate buyer, can they come up with the cash to pay US penalties to the Department of Justice or the Securities and Exchange Commission related to alleged violations of the Foreign Corrupt Practices Act. Currently, a potential upside of 21.9% exists for Avon Products, based on a current level of $16.95 and analysts’ average consensus price target of $20.66. The stock should find initial resistance at its 200-day moving average (MA) of $19.55 and further resistance at its 50-day MA of $20.55. For more news and updates, keep it right here to the financial news network.
American Eagle has announced that they will be holding an analyst meeting on Wednesday to discuss the future of their 77Kids division. With a $40 million dolllar loss posting from last year, the kids’ division is coming up short. Now, it has not been decided as to whether or not they will be selling all or part of the division, and no details have been released as to interested parties. But, in the midst of this breaking news, CFO Joan Hilson will be stepping down come July. American Eagle Outfitters share prices have moved between a 52-week high of $21.13 and a 52-week low of $10.00 and closed yesterday at 84% above that low price at $18.40 per share. Over the last five market days, the 200-day moving average (MA) has gone up 1.1% while the 50-day MA has advanced 2.2%.We will continue to monitor this recent development here at the Financial News Network and keeping you posted, I’m Geoffrey Parrish.
The markets opened on a positive note, and held onto their gains, despite ongoing concerns over the euro zone and a possible deal for Greece. On the earnings front, Lowe’s (LOW) posted a 14 percent increase in fiscal first quarter earnings, thanks to warmer weather, but the company lowered its full-year earnings outlook.
In trading on Monday, precious metals shares were relative leaders, up on the day by about 2.5%. Leading the group were shares of Entree Gold (EGI), up about 13.3% and shares of Extorre Gold Mines Limited (XG) up about 7.2% on the day.
The first trading day of the week has investors closely monitoring ongoing talks in Europe hoping that a deal can be reached with Greece. Good morning, this is Sayoko Murase with the Week Ahead Market Report for May 21, 2012.
