Market Recap: Wells Fargo Tries to Cover Losses, Crude Oil Takes a Hit
As stocks gained impressively, Hump Day wasn't so kind to commodities...
Yesterday after the close, Wells Fargo (WFC) set aside $1.4 bln in an attempt to cover some of its loan losses. More specifically, the reserve fund covers and $11.9 bln portfolio of loans acquired through mortgage brokers and other sources. This morning Professor Shedlock tried to 'shed' some light on the move in his article Wells Fargo's $1.4 Billion Loan Loss. He says that WFC CEO John Stumpf is describing a plan for deflation in which the company "is liquidating (cutting its losses in existing credit), while tightening lending standards for new credit." Despite the negative news, WFC stock traded higher today, closing up 2.98% to 30.72. Professor Depew tried to determine why the bad news was so good in today's Five Things You Need to Know.
The commentary continues to flow in the wake of yesterday's $7.5 bln deal between Citigroup (C) and Abu Dhabi's investment arm. Mr. Practical looks at the irony of the situation, noting that while stocks rallied on the news, shares of C underperformed the financial sector as a whole. Professor Katsenelson also chimed in with Citigroup's Future Profitability. Professor Tatro looked at ways of Making Money Off Of Citigroup's Deal. He says that this is all evidence that there is support out there for the broader market, and specifically for the energy sector, in the international community.
Looking at commodities, crude oil took a hit today, dipping -3.1% to close at 91.47. Professor Michael vibed on the Buzz that the forecast isn't looking good for Texas Tea or for Natural Gas due to several weather forecasters predicting unseasonably warm winters. On the other hand, while gold and silver were along for the downside ride early on, the metals gained back some of the losses late in the day.
See our Buzz Bits for more samples of content from the Buzz & Banter.
Coldwater Creek (CWTR) reported a loss of $0.07 EPS vs. an expected loss of $0.11. Revs rose 5.8% y/y to $271.2 mln vs. $264.6 mln cons.
Men's Wearhouse (MW) reports EPS of $0.69 on revs of $512.1 mln, in line with analyst expectations.
TiVo (TIVO) reported a loss of $0.08 EPS vs. a loss of $0.13 EPS cons on revs of $58.3 mln vs. $56.7 mln cons.
Sigma Designs (SIGM) reported $0.79 EPS vs. $0.55 EPS cons on revs of $66.2 mln vs. $51.8 mln cons.
Go take care of the important stuff and we'll start fresh tomorrow.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter