The Markets Now: Stocks Rebound; Dell Goes Private
Estee Lauder and Zynga are both up today.
Stocks rebounded from yesterday's losses and Dell (NASDAQ:DELL) agreed to be bought in a $24.4 billion deal with Silver Lake Partners.
In economic news, the ICSC-Goldman store sales index showed strong consumer spending as the index rose 2.4%.
Federal Reserve Governor Elizabeth Duke reassured bankers that the economy would come back strong, saying, “The interest margin pressure banks face today is partly due to low interest rates and partly due to low demand, both of which are consequences of a sluggish economy. As the economic recovery gains momentum, however, both of these conditions should reverse and give bankers the opportunity to deploy the liquidity and capital they have amassed.”
In international news, Barclays PLC (LON:BARC) CEO Antony Jenkins pledged to the UK Parliamentary Commission on Banking that he would reform the bank's ethics by eliminating commissions on the sale of financial products and rethinking its standards for handing out bonuses.
European stocks have since rebounded after they were hit hard following the news that the bank Banca Monte dei Paschi di Siena (BIT:BMPS) lost millions of dollars on three derivative trades.
BP (NYSE:BP) shares went up 1.31% to $44.18 after posting disappointing fourth-quarter earnings, with a nearly 80% drop in profit. The oil company lost billions of dollars after the oil spill in the Gulf of Mexico and is expected to lose more money in the upcoming year.
Yum Brands (NYSE:YUM) reported earnings after the closing bell yesterday. Fourth-quarter profit fell 5% to $0.72 per share compared to $0.75 a year ago. The stock sank 3.55% to $61.67.
Estee Lauder (NYSE:EL) stock ascended 7.04% to $65.34 after posting strong sales for the fiscal second quarter, thanks to what the company said is high demand in the US and China. The cosmetics company reported $1.13 per share in net income, up from $1.00 per share last year.
Chipotle Mexican Grill (NYSE:CMG) will also release fourth-quarter earnings after close. The restaurant chain is expected to post earnings per share of $1.97. Food costs may weigh on earnings this quarter. Its stock moved up 0.18% to $310.43.
Kellogg (NYSE:K) shares rose 1.98% after reporting a net loss of $32 million in comparison to a loss of $195 million a year earlier. The company brought in earnings per share of $0.65.
Zynga (NASDAQ:ZNGA) will post its much-anticipated earnings report today. Analysts expect earnings per share of $0.03 and revenue to shrink 31%. Its stock surged 4.30% to $2.67.
JCPenney (NYSE:JCP) rebounded this morning, rising 2.95% to $19.91. The American clothing retailer tried to save itself from losing more customers by bringing back sales.
Best Buy (NYSE:BBY) rose 0.76% to $15.88 after paying $4 million for an unsuccessful Super Bowl advertisement featuring Amy Poehler, which critics say failed to convey Best Buy's superior customer service.
Walt Disney (NYSE:DIS) earnings are expected to dip, with analysts expecting $0.77 per share down from $0.80 last year. The media and theme park giant will report earnings after the closing bell. Shares edged up 0.56% to $54.20.
Goldman Sachs upgraded UnitedHealth Group (NYSE:UNH) to Conviction Buy with a new price target of $66, up from $57. Shares went up 2.39% to $57.08.
Corn processor Arthur Daniels Midland Company (NYSE:ADM) stock was buoyed by a positive fiscal second-quarter report that showed profit above analyst expectations. Net income rose to $0.77 per share from $0.12 per share a year earlier. The stock rose 4.15% to $29.62.
Cigna Corporation (NYSE:CI) made a deal with Berkshire Hathaway (NYSE:BRK.A) that will reinsure Cigna's minimum death benefits and minimum income benefits. Shares moved up 3.19% to $60.21.
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