A Perfect Week (RIMM, DMND, UTX, YHOO, KIOR, JKS)
It was a perfect week for the market, with stocks gaining ground each day this week. Europe remains the center of investor attention, although the rally came despite a dispute between U.S. Treasury Secretary Timothy Geithner and German Finance Minister Wolfgang Schaeuble over how to tackle the problem moving forward. Geithner wants Europe to better leverage bailout funds and to speak with one voice, while Schaeuble called for the U.S. to drop its opposition of a global financial transactions tax. The market was pretty volatile today, and we would expect that volatility to continue into next week.
The Ethanol and Biofuel Stocks Index was the top performing tickerspy Index on the day, led by KiOR (KIOR) with a 27% gain. The Chinese Solar Stocks Index was the day’s worst performing tickerspy Index, with JinkoSolar Holding (JKS) down -8%.
Stocks rose on the day, with the Dow climbing 76 points to 11,509. The S&P tacked on a gain of 7 points to close at 1,216, while the Nasdaq added 15 points to 2,622. Oil fell -$1.44 to $87.96 a barrel, while gold rose $33.30 to $1,814.70
In economic news, the Thomson Reuters/University of Michigan initial reading on September consumer sentiment rose to 57.8 from 55.7 in August. Economists were expecting a reading of 56.5.
In earnings news, shares of BlackBerry maker Research in Motion (RIMM) plunged -19.0% after the company said its fiscal second-quarter tumbled to $329 million, or 63 cents per share, from $797 million, or $1.46 per share, a year earlier. Revenue fell -10% to $4.16 billion. On an adjusted basis, RIM earned 80 cents a share. Analysts were expecting a profit of 88 cents on sales of $4.47 billion. RIM forecast a fiscal third-quarter profit of $1.20-$1.40 a share on revenue of $5.3-$5.6 billion. The company expects a full-year profit of $5.25-$6.00 a share. Nearly 20 pros held RIM in their portfolios at the end of Q2 and more than 2,500 tickerspy members own the stock in their portfolios.
Shares of Diamond Foods (DMND) surged 11.6% after the California-based company said its fiscal fourth-quarter profit soared 27% to $8.5 million, or 37 cents a share, from $6.7 million, or 30 cents a share, a year earlier. Revenue jumped 32% to $232.8 million. On an adjusted basis, Diamond earned 52 cents a share. Analysts were expecting a profit of 44 cents on sales of $216.3 million. Diamond raised its full-year guidance to $3.05-$3.15 a share from $3.00-$3.10 and projected sales of $1.85-$1.95 billion. Analysts were expecting a profit of $3.05 on revenue of $1.59 billion.
Dow component United Technologies (UTX) is reportedly in the process of securing financing for what could be the company’s biggest acquisition in a decade. A source quoted by Reuters said the company could be looking for financing of over $20 billion. United Technologies had $5.4 billion in cash at the end of the second quarter. United Technologies has been making smaller acquisitions for several years, but executives recently said they might be looking to put more of the firm’s cash to work. Shares of United Technologies fell -0.2%.
Private equity firm Silver Lake is rumored to be mulling a bid for Yahoo! (YHOO), the second-largest U.S. provider of Internet search services. Silver Lake would sell Yahoo’s Asian assets and then try to turn around the company’s core business itself or find a buyer for that unit, Bloomberg reported, citing sources with knowledge of the situation. Shares of Yahoo rose 0.5%. Nearly 40 pros held Yahoo in their portfolios at the end of Q2 and more than 1,400 tickerspy members own the stock in their portfolios.
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