Ultimate Market Recap: Southwest Shares Take Off Early, Citigroup To Cut 4,500 Jobs

The Cheat Sheet

Tuesday Morning’s Top Stories

King Albert II will swear in Belgium’s new cabinet today, bringing an end to the country’s world record-breaking 541 days without a federal government. For the first time in 32 years, Elio Di Rupo will take over the reins as the country’s Francophone premier in Europe’s center-right dominated governments. His cabinet ministers will also be sworn in today and the new government will be set before hosting Friday’s EU summit.

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Standard & Poor’s put Germany , France , and 13 other euro-zone nations on review for a credit rating downgrade yesterday, saying “continuing disagreements among European policy makers on how to tackle” the region’s debt crisis risk damaging their financial stability.

The Asian Development Bank said Asian economies are now looking at “much greater downside risks” prior to the previous three months due to potential U.S. and Europe recessions and destabilizing capital flow risks could affect the region’s economic growth, according to Reuters. The bank said in its Asia Economic Report that with the global economy’s uncertainty, East Asian officials need “sufficient flexibility” to quickly adjust economic policies.

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Ford Motor Co.   will cast a wide net in its search for CEO candidates to replace current Chief Executive Officer Alan Mulally; he will be leaving within the next two years, according to the Wall Street Journal.

While Ford Chairman Bill Ford has said the company would like to hire within, they are looking externally at former Ford executives along with two internal possibilities including Americas President Mark Fields, 50, and Joe Hinrichs, 45, chief of Asian operations.

Microsoft Corporation   will unveil its Xbox Live user interface upgrade today. Xbox owners will have number of new options through their Kinect motion controllers for music, movies, TV shows and games on the console through either waving their hands, saying commands or searching. With the expansion, Microsoft is further attempting to turn the Xbox into an at-home wide-ranging, entertainment venue with cloud storage to advance the experience.

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Tuesday Morning Hot Stocks

Helen of Troy Limted   is popping 1% after saying it would pay an undisclosed mount to buy water filter maker PUR from  Procter & Gamble Co.   .

Shares of  Halliburton Co.   are down 1.1% after  BP  charged the company in court of destroying evidence relating to the 2010 Deepwater Horizon explosion.

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Despite recent turbulence in the airline industry, shares of  Southwest Airlines Co.   are flying 2.29% higher in early trading.  The company expects another exceptional month for December.  For November, the company experienced a 9% increase in its unit revenue.  Competitors include:  United Continental Holdings, Inc.   and  JetBlue Airways  .

Before the opening bell, shares of  Darden Restaurants Inc.   dropped more than 9%.  The company expects a weaker quarter due to struggles at The Olive Garden.

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Shares of  AutoZone   are racing 1.4% higher in early trading.  The company reported strong quarterly results.  Net earnings increased 11% to $191.1 million ($4.68 per share), compared to $172.1 million ($3.77 per share) last year.  Competitors include:  Pep Boys   and  O’Reilly Automotive, Inc.   .

Lowe’s Companies   is edging lower, despite reaffirming its fiscal-year earnings outlook.  The company expects to earn $1.37 to $1.40 per share for fiscal 2012, which ends February 3.  Home Depot Inc.   is also edging lower.

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Tuesday’s Trending Stocks

The Dow Jones Industrial Average is trading up at 12,133 and the S&P 500 Index is trading flat at 1,256. Here are the most buzzing stocks on Wall Street driving the chatter today:

  1. Darden Restaurants, Inc.   : Shares of Darden Restaurants, Inc. are trading  lower  10.4% today. Darden Restaurants, Inc. operates casual dining restaurants in North America. The Company owns and operates seafood and Italian restaurants.
  2. AutoZone, Inc.   : Shares of AutoZone, Inc. are trading  flat  today. AutoZone, Inc. is a specialty retailer of automotive replacement parts and accessories. The Company offers an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. Autozone operates in United States and Puerto Rico, and Mexico.
  3. Peregrine Pharmaceuticals   : Shares of Peregrine Pharmaceuticals are trading  higher  48% today. Peregrine Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is focused on the research, development and commercialization of novel therapeutics for cancer and a wide range of viral diseases.
  4. Toll Brothers, Inc.   : Shares of Toll Brothers, Inc. are trading  higher  1% today. Toll Brothers, Inc. builds luxury homes, serving both move-up and empty nester buyers in several regions of the United States. The Company builds customized single and attached homes, primarily on land that it develops and improves. Toll Brothers also operates its own architectural, engineering, mortgage, title, security, landscape, insurance brokerage, and manufacturing operations.
  5. The Pep Boys – Manny, Moe & Jack   : Shares of The Pep Boys – Manny, Moe & Jack are trading  lower  4% today. The Pep Boys – Manny, Moe & Jack retails automotive parts and accessories, provides automotive maintenance and service, and installs parts. The Company operates PEP BOYS stores in the United States and Puerto Rico.
  6. The Toro Company   : Shares of The Toro Company are trading  lower  1.5% today. The Toro Company designs, manufactures, and markets a range of turf equipment. The Company’s products include professional turf maintenance equipment, turf and agricultural irrigation systems, landscaping equipment, and residential yard products. Toro’s products are sold worldwide under trademarks such as Toro, Wheel Horse, Lawn-Boy, Irritrol, and Dingo.
  7. Liquidity Services, Inc.   : Shares of Liquidity Services, Inc. are trading  lower  2% today. Liquidity Services Inc. provides full service solutions to market and sell surplus assets and wholesale goods.
  8. Protalix BioTherapeutics Inc.   : Shares of Protalix BioTherapeutics Inc. are trading  lower  16% today. Protalix BioTherapeutics Inc. is a biotechnology company that has developed plant cell culture technology and a bioreactor system.
  9. SuccessFactors, Inc.   : Shares of SuccessFactors, Inc. are trading  flat  today. SuccessFactors, Inc. provides on-demand performance and employee software solutions to help organizations optimize their performance.
  10. Affymax, Inc.   : Shares of Affymax, Inc. are trading  lower  8% today. Affymax Inc. is a clinical-stage biopharmaceutical company. The Company develops peptide-based drugs for the treatment of serious and life-threatening conditions such as kidney disease and cancer.

Market Recap

Markets closed mixed on Wall Street today:  Dow  +0.43%,  S&P +0.11%,  Nasdaq  -0.23%,  Oil  0.00%,  Gold  -0.14%.

On the commodities front,  Oil   remained flat at $100.99 a barrel. Precious metals were mixed, with  Gold  falling to $1,732.00 an ounce while  Silver  climbed 1.57% to settle at $32.88.

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Today’s markets were mixed because:

1)   Bazooka.  Stocks rallied through most of the day on an unconfirmed report that European leaders are working on a plan to combine various rescue funds into a so-called big “bazooka”. The Financial Times said European officials are working on a last-minute proposal to combine the resources of the existing bailout fund with those of the new one to debut next year. The newspaper also said the funds could be supported in some way by the International Monetary Fund. Countries like Germany might be more willing to support such measures if they are successful in creating a tighter fiscal union that holds sovereign governments accountable to a higher authority on budgetary matters.

2)  Standard & Poor’s.   A rumor emerged in the last hours of trading yesterday that Standard & Poor’s would soon be putting all of the euro zone on watch for a credit downgrade. The news interrupted a market rally that had the major indices up more than 1.5%. The rumor was confirmed later in the evening, when the credit rating agency said it had placed 15 of the 17 euro nations — including Germany, France, and four other AAA-rated countries — on review for a possible downgrade. Though stocks rallied on the Financial Times report, the “bazooka effect” was ultimately tempered by concern that the downgrade of a euro-zone country would lead to the European Financial Stability Facility being downgraded, which would cause the rescue fund’s interest costs to rise, and therefore inhibit its ability to support the struggling sovereigns. 

3) Stocks . The conglomerates sector was the best performer today, buoyed by 3M , which announced it expected 2012 sales to grow 2% to 6% year-over-year in 2012, with EPS rising to $6.25 to $6.50. Shares were up 1.48% to $82.13 at close. Darden Restaurants wasn’t quite so lucky — the stock plunged 11% after the company, which operates Red Lobster and Olive Garden, issued a gloomy outlook for the quarter and fiscal year.

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After Hours Radar Stocks

Shares of  Men’s Wearhouse   are surging more than 6% after the closing bell.  The apparel company announced strong third quarter earnings.  Net income was $39.9 million (77 cents per share), compared to $25.3 million (47 cents per share) last year.

After falling almost 3% during regular market hours, shares of  Netflix   jumped 1.09% in late trading.  Reports indicate that  Verizon   is preparing to launch an online streaming video service to compete with Netflix and  Amazon   .

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With shares being down 8% year-to-date,  General Electric  is looking for other ways to provide returns to shareholders.  The company announced it was on track to resume paying a dividend next year.

Shares of  MetroPCS Communications Inc.   popped nearly 8% on Tuesday.  CFO J. Braxton Carter announced that  AT&T Inc.’s   attempt to purchase T-Mobile USE is likely to fail, citing intense opposition by the government.  Shares edging lower in extended trading.

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LinkedIn   continues to climb .35% higher in late trading.  The social networking firm received upgrades from  Morgan Stanley   and  JP Morgan   .  Bank of America Merrill Lynch   also raised its 2012 and 2013 earnings estimates for the company.

Citigroup   shares are slipping .50% after the bank announced plans to cut about 4,500 jobs in the coming quarters. Previously, the bank was expected to cut 3,000 jobs. Citigroup will take a charge of about $400 million in the fourth quarter due to the cuts.

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