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Before The Bell: Goldman Cut and Hot Dog Miss

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Premier investment bank downgraded, Home Depot whiffs.

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Morning Perspective: Merrill Cuts Goldman

According to Bloomberg, Merrill Lynch analyst Guy Moszkowski cut 1Q earnings projections for Goldman Sachs (GS) due to "recent market movements." Earnings for the world's premier investment bank was slashed from $3.97 to $2.31 which is lower than consensus forecasts of $3.34 per share. Moszkowksi also cut his 1Q revenue projections on the company to $7.5 bln from $9.6 bln and said that although GS "continues to benefit from relatively better navigation of the troubled environment," it is not "unscathed" given the greater macro conditions. Read Professor Bill Fleckenstein's column The Un-Credible Fed.

From the Bull Pen: Given the greater economic concerns that Moszkowski mentioned, bulls can look to play in the biotech sector for these stocks can trade in a world of their own. One option is Genentech (DNA). Bulls may enter should the stock fill in its gap at $75. Sell-stops may be set below.

From the Bear Cave: Bears can expect slashing estimates in the financial sector to continue and short the financial ETF (XLF); buy-stops above $80.


Hot Dog Miss

Home Depot (HD), the world's largest home improvement retailer, reported 4Q earnings of $0.40 per share, $0.03 less than analyst estimates of $0.43. Revenues came in at $17.66 bln less than consensus figures of $18.02 bln. Further, the company forecasted a 19-24% decline in earnings from continuing operations on a total sales decline of 4-5% for FY2008. Analysts were expecting an earnings drop of 8% on a 3% decline in revenues. See Professor Mish Shedlock's column Homeowner Withdrawal for context into Home Depot's issues.

From the Bull Pen: Bulls can find an upside play in Lowe's (LOW). The stock broke a one-month downtrend on yesterday's earnings report. Sell-stops can be set below $23.20.

From the Bear Cave: Bears can short HD; buy-stops above the 100-DMA (28.90). Other options include the broader retail ETF (RTH); buy-stops above $95.


For more ideas, see Minyanville's Spotlight Stocks.


Quick Check Around the World

Traders turn to the Turnaround Tuesday ticks as they find foreign markets skewed to the upside.

Asian trading closed with the Hang Seng +1.92%, Nikkei -0.65%, Sensex +0.88%, Taiwan +0.26% and Shanghai +1.09%.

Glancing across the pond, we spy the CAC +0.88%, DAX +1.36%, FTSE +1.10%, ATX +1.46%, Swiss Mkt. +1.74% and Stockholm +1.41%.


A Look At Commodities

Commodities are lower. Crude oil is down -0.16 to 99.07. Gold is trading -1.90 to 935.70. Silver is higher +0.060 to 18.145, and copper is down -4.55 to 374.15.

As of 8:45 AM EST, S&P futures are trading lower -4.4 points to 1367, and Nasdaq futures are down by -7.7 points to 1777.

The dollar index is off -0.309 to 75.215.


On the Radar

Economics

PPI (m/m): 1.0% vs. 0.4% cons
Core PPI (m/m): 0.4% vs. 0.2% cons
PPI (y/y): 7.4% vs. 7.3% cons
Core PPI (y/y): 2.3% vs. 2.2% cons
S&P CaseShiller Home Price index: 188.8 Prior

10:00 Consumer Confidence: 82.0 cons
10:00 Richmond Fed Mfg. Index: -7 cons
10:00 House Price Index (q/q): -1.0% cons
5:00 ABC Consumer Confidence: -37 prior

Click here for the full trading radar.

Good luck and have a great day!
No positions in stocks mentioned.

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.

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