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Ben There, Done That. Now What? Day After Fed Chair in Hot Seat

Dan Berman
Hot Stock Minute

"Ben" there, done that. Now what? Global reaction to the Fed chair's time in the hot seat and the FOMC's policy guidelines. So far, it has not been good. Futures are sharply lower, following a big drop yesterday afternoon. The Dow shed more than 200-points, or 1.4%. The S&P lost about the same percentage. And the NASDAQ started a swoon that's continuing in early trading today.

Weekly jobless claims were released just minutes ago at 8:30 as we started streaming live to you. The Labor Department says there were 354,000 claims last week. Estimates had been for 340,000.

There's been a plea for patience this morning in Sony's (SNE) shareholder showdown. It came at the company's annual meeting in Tokyo. Sony's CEO says the company board will consider a proposal to spin off the profitable entertainment arm, but it doesn't want to rush into anything. Sony's top shareholder, Daniel Loeb of Third Point says the company should be isolating its ailing electronics division.

It looks like Men's Wearhouse (MW) founder George Zimmer will have a cohort on the unemployment line. While we were all watching the Fed yesterday, SandRidge Energy (SD) ousted its CEO Tom Ward. Like Zimmer who was let loose yesterday morning, Ward founded his company. His removal was the work of unhappy investors. SandRidge stock is down 21% year-to-date. Though it's climbed about 6% on Ward's ouster.

There are some other brief headlines for you this morning: Facebook (FB) may be about to take on Twitter with video sharing. Bloomberg reports Mark Zuckerberg and company will unveil a new tool using Instragram at a press conference later today. Also, Apple (AAPL) TV is adding programming from HBO and ESPN to its Apple T-V service. Third, the Wall Street Journal reports that Microsoft (MSFT) was in talks to buy Nokia (NOK), though the companies couldn't agree on a price. Separately, Microsoft has decided to allow the trading of games on its new Xbox one which is about to debut. An earlier plan for restrictions had gamers talking they would prefer to buy the new PlayStation 4 instead.


First up is Kroger (KR) which reports quarterly earnings this morning. The supermarket is expected to post earnings of 88-cents a share up a dime from a year ago on revenue of more than $30-billion. Earlier this week Cantor Fitzgerald raised the stock’s price target to $33 from $26 citing the chain's strength with generic products. Though Cantor left the stock as a hold. Prior to this morning Kroger's shares are up 33% this year. The rise is part of a larger 53% climb that had the company hitting a new 52-week high just yesterday.

Next is Oracle (ORCL), which reports after the closing bell. Consensus is for the company to post earnings of 87-cents a share up from 82-cents a year ago on higher sales. Key to the results will be corporate IT sales as more businesses move their operations to the cloud. The sense is that Oracle is being hurt by the shift. Oracle is down so far in 2013, although a climb late last year means it has gained 20% over the past 52-weeks.

Number three this morning is another software company: Linux-maker Red Hat (RHT), which is up 3.5% in early trading. That's because it edged past estimates when it reported results yesterday afternoon. Excluding items, earnings were 32-cents a share on $363-million in revenue. That's an 8% rise in sales. It has been a tough year for Red Hat shareholders with the stock down about 18%.

Finally, we look at another tech company, Finisar (FNSR), which has been up 12% since yesterday's closing bell. What caused the jump? You guessed it. Earnings. Excluding items Finisar made 20-cents for the quarter, topping estimates by 3-cents. Revenue was in line with expectations at $243-million. Year-to-date this stock has been down 13%, so the gains we're seeing now put the stock back at the flatline.