The thaw is complete after a flash freeze at the NASDAQ. We're told a computer glitch that halted trading for more than 3-hours yesterday afternoon has been fixed and all is back to normal. The latest as we understand it: the disruption was caused by a connectivity issue with an exchange participant. Let's get reaction from Yahoo! Finance Senior Columnist Mike Santoli in the video above.
Of course this is not the first computer glitch to cause market madness. Just this past Tuesday, Goldman Sachs Group flooded the market with errant options trades in a mistake that could cost the firm upwards of $100-million. Last year, Knight Capital lost $461-million after faulty trading software caused the firm to mistakenly buy $-billion in stocks. And who could forget the flash crash of 2010 which sent markets plunging nearly a-thousand points in a matter of minutes.
Now some other business headlines, including a related story: The Commodity Futures Trading Commission or CFTC is now doing research so it can create rules to tame high-speed computer trading. Moody's is threatening to cut the credit rating of several major banks, saying the chances of a government bailout have diminished. And, regulators both here and in the UK could fine JPMorgan as soon as next month because of the London Whale case.
Apple has bought another mapping company. This latest aquisition is called Embark. No word on the price or exactly when the deal went through. Last month Apple acquired Locationary and HopStop. The purchases follow Apple's botched attempt to replace Google maps with its own map app.
STOCKS TO WATCH
Gap says profits were up 25% when it released quarterly results after yesterday's closing bell. The chain reported earnings of 64-cents a share, exactly what was expected, on revenue of $3.87-billion just a hair above the consensus. Delving deeper, same-store sales rose 5% from a year ago. All of this good news stems from a strategy to carry more brightly-colored clothing and make stores look livelier. By the way the company raised its full-year earnings guidance and upped its dividend. Gap stock has been up 34% year-to-date which may explain why this upbeat report has it trading just fractionally higher so far.
Teen retailer Aeropostale has been down 11% since reporting earnings after the bell. That adds to a decline of 23% we have already seen over the past month. Why the negative sentiment? Adjusted earnings loss of 34-cents a share, even worse than the loss of 24-cents that was expected. Revenue did manage to come close to expectations, but the outlook is weak. The one thing rising at the company? Number of stores it plans to close. Aeropostale has been trying to offer trendier clothes, but so far the higher price tags seem to be scaring people away. By the way, Aeropostale's larger competitor Abercrombie and Fitch was down a whopping 17% yesterday on its own dismal report.
It's not just retailers feeling the pain after earnings. Internet radio service Pandora beat the street posting adjusted earnings of 4-cents a share, twice the consensus on revenue that beat expectations. Still, shares swooned 12% before paring losses back to 6%. No shareholder likes to these kinds of declines, but keep in mind, before today shares were up 129% year-to-date. The reason for the drop is a weaker-than expected outlook for the coming quarter. There's also concern that the radio industry is changing too fast to know where it's actually going. But Pandora now has more than 70-million active users.
Big Lots reports its earnings today.The chain is expected to post profits of 24-cents a share, down about a third from a year ago, but on revenue that's basically flat. The company recently lowered guidance for same-store sales. But has been forecasting a giant jump in sales at new stores. Big lots is down 10% over the last month but up 15% year-to-date.
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