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Morning Rage 8.2.2012

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Overnight S&P 500 futures gained 11.5 points to 1373.50, Dow futures gained 97 points, and NASDAQ futures rose 23.50 points to 2642.00.

So far, of the 385 companies in the S&P 500 that have reported earnings, 67 have beat expectations. In my opinion, this is insignificant due to analysts’ lowball earnings expectations.

LinkedIn Corp. (LNKD) posted strong earnings last night, gaining over 8% in after hours trading. They reported stronger than expected earnings as well as a strong guidance.

Knight Capital Group (KCG) had a terrible day yesterday, falling 63% after an algo meltdown expected to cost the company roughly $440 million.

EUR/USD futures (6EU2) rose 88 pipps after news that the ECB would not take immediate action settled in. 6E was trading at $1.2268 this morning.

David Cornes holds a degree in economics from the University of Montana.

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Chris Cruises the Globe 8.3.2012

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The Hang Seng was not hit as hard but did feel the squeeze as it dropped .1%, however is up 2% for the
week. Property shares recovered some ground today as China Overseas land added 1.7% and Poly Real
Estate, listed on the Shanghai exchange, gained back 1.8% after the 9% loss yesterday.

Europe moved on from the ECB news yesterday and is rallying around US jobs data, the FTSEurofirst
is currently ahead 1%, on track for its ninth weekly gain in a row. Eurozone banks are helping the rally
with Societe Generale up 4.5%, Intesa Sanpaolo up 6.1% and Deutsche Bank up 3.7%.Around Europe all
indices are up except for the PSI general, Germany’s Dax is up 1.5%, the French CAC 40 is up 1.4%, the
Madrid General is up 3.16% and AEX Amsterdam is up 1.67%.

Siemens, up 4.5%, has started a stock buyback, after getting shareholder approval at its annual meeting,
to use the money for employee compensation and convertible and warrant bonds.

Crude and gold are set to begin the day up as silver and natural gas are in the red.

Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market.
Comments can be directed to ryghcw19@uww.edu

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Doherty at the Close 8.2.2012

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European stocks tumbled, with Spain’s IBEX 35 sliding 5.2%, and Italy’s FTSE MIB losing 4.6%. Overall, the Stoxx Europe 600 dropped 1.3%.

Knight Capital Group (KCG) lost 63% of their share value after annoucing that they had lost $440 million in a mishap with their electronic trading system. The company has lost more than two-thirds of its share value in 24 hours.

Concerns about Europe overshadowed mixed U.S. economic data. The number of workers filing applications for jobless benefits rose to 365,000 last week, a smaller increase than economists had expected, according to a Dow Jones Newswires poll. T

Abercrombie & Fitch (ANF) tumbled after the company lowered its outlook for the year based on lower than expected sales trend. Yelp (YELP) climbed 17% when the site reported a narrower than expected loss in its second quarter.

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Halftime Report 8.02.2012

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S&P 500 futures (ESU2) dropped 14.75 points to 1355.75, Dow Jones Industrial Average futures fell 139 points to 12784.00 and NASDAQ futures fell 11 points to 2614.00.

Gold futures dipped below the $1600.00 level, trading down $16.20 to $1591.10. WTI crude futures (CLU2) fell $1.17 to $87.74.

Shares of Bristol-Myers Squibb Co. (BMY) fell over 7% this morning as a patient in a Hepatitis C study had heart failure due to their subsidiary’s medication.

The K-Cup has really taken off. Green Mountain Coffee Roasters Inc. (GMCR) gained over $4.50 (+26.18%) after posting a 30% increase in income for Q3.

Knight Capital Group Inc. (KCG) fell over 50% this morning after yesterday’s algo-meltdown with damages expected to reach $440 million.

Unsurprisingly, Monster Worldwide Inc. (MWW) posted weak earnings and fell almost 20%. The global job market is not doing well.

Weight Watchers International Inc.’s (WTW) shares lost over 13% or their weight this morning as they reported an 11% fall in earnings as well as weak guidance.

In the internet startup industry, Yelp Inc. (YELP) gained 22.69%. This comes as positive news to the sector after major declines in other internet based companies such as Facebook and Groupon.

David Cornes holds a degree in economics from the University of Montana.

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Movers and Shakers – KCG – 8.2.2012

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The Jersey City electronic market making firm had a technical glitch that affected owners of 140 different stocks.  Initially, in premarket trading, analysts expected the damages to total $140 million. Knight executed about $20 billion a day in trades in June.

Investors are still trying to figure out how Knight managed their positions after their systems crashed for 45 minutes on Wednesday. This is just another example on how algo-driven trading can lose a lot of money.

David Cornes holds a degree in economics from the University of Montana.


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