The world is getting a dose of eastern medicine. China's central bank is addressing worries of a cash crunch. This morning the PBOC said it will guide interbank interest rates to reasonable levels. The news helped lift the Shanghai market almost to the flatline after it fell 5% in intraday trading. Still, because of losses yesterday, stocks closed at their lowest level in more than four years. Are the developments in China enough to pull U-S markets out of their tailspin? Yahoo! Finance Senior Columnist Mike Santoli has more in the video above.
We have breaking news: the Department of Commerce says orders for durable goods rose 3.6% in May. The consensus had been for an increase of 3.3%. Due out later today: the Case-Shiller housing index at 9am. Then at 10am we'll get numbers on new homes sales and consumer confidence.
So far Microsoft (MSFT) is looking like the winner in its new partnership with Oracle (ORCL). Shares were up about 1 1/3% yesterday even as the overall market slid. Oracle was also up fractionally. But the rise was nothing close to the 12% loss that the stock suffered last week when it reported earnings. Yesterday the two rivals announced an agreement that will allow parts of Oracle's business software run on Microsoft's platform. Both companies are trying to fight off competition in the cloud.
Men's Wearhouse (MW) founder George Zimmer may be plotting a return to the company. Zimmer resigned from the board of directors yesterday. But Reuters reports he could team-up with private equity to buy out the chain, or wage a proxy battle. Zimmer was ousted last week from his job as company chairman. Insiders say his removal stemmed from gowing battles with his hand-picked CEO.
STOCKS TO WATCH
Drug store giant Walgreen (WAG) which missed estimates when it reported earnings at 7:30 this morning and is now down 6%. The company posted earnings of 85-cents a share. That's a record, and up from 72-cents a year ago, but it missed the consensus of 91-cents. Revenue was also a hair shy of expectations at $18.3 billion. Walgreen is pointing to robust sales in its pharmacy department and says it's maintaining strong margins. But Cantor downgraded the stock to hold from buy yesterday keeping their price target at $49. The stock closed at about $48 a share yesterday, up 26% this year. Even with the pullback in the larger market, the stock is up 66% over the past year.
Next is home-builder Lennar (LEN) which is up more than 5% this morning after reporting earnings. The company easily beat estimates posting profits of 43-cents a share when estimates were for 33-cents. Revenue was also higher than the consensus. Lennar is clearly benefitting from the housing rebound. Sales jumped 53% from a year ago as the company sold more homes and at higher prices. Shares are down 18% over the past month, and 12% year-to-date. But they enjoyed quite a run-up towards the end of 2012 and are actually up 32% over the past year.
Carnival (CCL) was supposed to report before the opening bell but has now delayed its release until 10am. The cruise company is having trouble righting its ship and is expected to post earnings of just 6-cents a share down from 20-cents a year ago. Carnival has been reeling from a series of disasters and mishaps at sea. As a result it has been offering discounts to get people on board its ships. Shares of Carnival are down 11% year-to-date. Despite all the choppiness on their chart, they're basically unchanged over the past 52-weeks.
Finally, Smith and Wesson (SWHC) reports after the closing bell. The gun-maker recently upped its earnings outlook to 44-cents a share. The earlier forecast had been for 40-cents. Both are a large jump from the 27-cents posted a year ago. Sales are expected to be up nearly 40% on increasing demand.
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