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Spotlight Stocks: American Express, Apple, DuPont, United Health


Tuesday's top stories and stocks with potential to move.


Stocks to watch for Tuesday, July 22, 2008:

  • American Express (AXP) reported 2Q net income of $653 million, or 56 cents per share, down 38% from $1.06 billion, or 88 cents per share a year ago. As the company targets wealthier consumers, it is a sign that even that segment is feeling economic pain. Analysts, on average, expected earnings of 83 cents per share, according to Thomson Financial. The results include a $374 million addition to credit reserves, reflecting higher credit losses and the expectation for increased write-offs in the third and fourth quarter, said the Associated Press.

  • Apple (AAPL) reported 2Q earnings of $1.07 billion, or $1.19 a share, beating Wall Street expectations of $1.08 a share and up from numbers a year ago of $818 million, or 92 cents a share. Revenue rose 38% to $7.46 billion from $5.41 billion. However, cautious guidance prompted investors to take the stock lower, falling 11% in after-hours. The company said it sold 717,000 iPhones in the quarter and said it shipped nearly 2.5 million Macs, up 41% from the year-earlier period.

  • DuPont (DD) reported 2Q net income of $1.08 billion, or $1.18 a share, up 11% from $972 million, or $1.04 a share a year ago, citing record sales of corn and soybean seeds. Net sales gained 12 percent to $8.84 billion. The company's Pioneer unit, which is the second-largest seed producer in the world, will be expanded on as record grain prices that give farmers more to spend on modified crops and pesticides, reported Bloomberg. Its agriculture unit performed well too as profit jumped up 18%.

  • Fannie Mae (FNM) and Freddie Mac (FRE) may have to take more writedowns as the companies took on more exposure to non-guaranteed subprime and Alt-A mortgage securities just as investors were getting into safer investments, reported Bloomberg. Originally valued at $217 billion, these investments are now dropping.

  • United Health (UNH) reported 2Q net income of $337 million, or 27 cents a share, down 73% from $1.23 billion, or 89 cents a share a year ago. The company cited settlements in suits related to its stock-options scandal for the drop. Analysts had expected 64 cents a share while the company had cut forecasts this month to a range of 64-66 cents a share, reported The Wall Street Journal. Revenue rose 6.7% to $20.27 billion. United Health backed its reduced full-year earnings forecast of $2.95 to $3.05 a share.

Market Recap

  • Asian trading closed with the Hang Seng -0.02%, Nikkei +2.98%, Sensex +1.84%, Taiwan -0.28% and Shanghai -0.53%.

  • A quick check across the pond finds the CAC -1.40%, DAX -1.07%, FTSE -1.77%, ATX -1.12%, Swiss Market -1.30% and Stockholm -3.24%.

  • In commodities, crude oil is trading lower -0.21 to 130.83 and gold is higher +9.6 to 973.3 this morning.
No positions in stocks mentioned.

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