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Buzz Bits: Dow, Nasdaq Finish Down


Your daily Buzz & Banter highlights...


Editor's Note: This is a small sample of the content available on the Buzz and Banter.

Earnings Report - MV News

  • Men's Warehouse (MW) reports 4Q EPS of $0.81 vs. $0.75 cons on revs of $556.8 mln vs. $557.81 mln cons.
  • Coldwater Creek (CWTR) reports 4Q EPS in-line of $0.17 on revs of $366.6 mln vs. $343.3 mln cons.
  • TiVo (TIVO) repoerts 4Q EPS of ($0.19) vs. ($0.36) cons on revs of $57.4 mln vs. $54.70 mln cons.

A little lesson in financial engineering... - John Succo - 3:57 PM

There is so much "fluff" in the stock market from financial engineering: company re-arranging assets and the financing of those assets to release "value" in companies. From GM shuffling liabilities so it can borrow more money to almost every company in the world buying back stock by borrowing more money, how exactly does this create value?

In almost every instance it does not. It gets a reaction from analysts and thus one from traders, but major holders often use it to exit stage left.

EMC announced a spin-off of 20% of its business just this February and the stock shot up about 9%. I shook my head and wondered why the parts are worth more than the whole. Why does 2+2 = 4.36?

The answer is it doesn't. Perception is now reality as the stock is lower than when the deal was announced.

In the meantime lots of damaged companies are selling bad assets away and the market is rewarding them for financial engineering that hasn't even taken place yet.

Position in EMC

Buzz in the Afternoon - Todd Harrison - 1:45 PM
  • Over in Flow's Diner, a gorilla recently scooped 1,000,000 XLE (energy spiders).

  • NYSE internals have edged 3:2 positive while Nazz breadth toggles flat.

  • No, the 2:30 meeting isn't at MSG but my thoughts will be with the Orange.

  • Serendipity! That tan, somewhat Beige Book will be released at 2:00 EST just as the tape toggles at S&P 1400 and NDX 1750.

  • Man, when they come for the drillers, they really come for the drillers! OSX 204ish is the level to watch for those involved.

  • And just like that, Ariana informs me that our chariot awaits outside. I'll be back at MVHQ right around the closing bell to host our weekly staff meeting and to wrap a bow around our weekly Hump. Fare ye well, Minyans, and keep it real.

The older I get the younger they stay... - Jeff Macke - 11:12 AM

Greetings from snowed-in New Jersey where, near as I can tell, I'm the only person who cares that the Minnesota State High School Hockey Tournament starts tomorrow, let alone that my alma mater, Edina High School, is a number one seed. Show some enthusiasm out there, people, and don't make me start channeling Herb Brooks. Because I will. By now, you all know that I will.

In less frozen news...

  • Listening to Fast Money guest Dennis Gartman's advice to "do the hard trade" is paying off today for those lucky enough to be in the retailers on the long-side. The group is strong, led by Saks (SKS) and its insanely large February sales.

  • For the record, Guy Adami has been a Saks bull for a few months. I've been slightly more skeptical and a lot more wrong on the name.

  • Also strong, though for reasons much harder to fathom, is BJ's (BJ), which missed earnings by a mile and continues to play the role of Washington Generals to CostCo's (COST) Globetrotters. CostCo reports after the bell.

  • After spending 45-minutes trying, unsuccessfully, to make the five mile trip to our local grocer this morning I've reached two conclusions. (1) No one here can drive in the snow and (2) I should probably start my commute into the City for tonight's show right about now.

  • How much conviction do I have on the long-side-for-a-trade idea? Let's just say I'd be more than happy to declare victory and run away right now, if that were an option.

Potential dandruff alert in 10's... - Bennet Sedacca - 10:43 AM

I brought up a couple of weeks ago here that a potential head and shoulders in 10 year futures was developing.

See the chart here. I have to admit that this has been driven by weaker than expected (not by me but certainly by most economists) economic statistics and the global sell-off in equities.

I have to admit that the chart is far from perfectly symmetrical, but it might be 'close enough for government work'--please pardon the pun...

At any rate, the Beige Book coming up at 2 PM may drive the next move. Seasonality is lousy until late May but if stocks resume their sell-off, the flight to quality may more than offset the seasonality issue.

Fundamentally, it is hard to get excited about 5's at 4.46%. So I continue to look for value elsewhere, outside of credit risk, as mentioned previously.

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No positions in stocks mentioned.

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