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FOMC to Begin Meeting; CPI & Housing Starts; Sony at Stake

Dan Berman
Hot Stock Minute
FOMC to Begin Meeting; CPI & Housing Starts; Sony at Stake

Fed policy is officially in play. The much-hyped FOMC meeting kicks-off this morning. Markets moved markedly higher yesterday as traders tried to profit off their predictions. Even despite a late-day dip, the Dow made triple-digit gains.

Meanwhile, two numbers were released this morning that came in short of estimates. First, the Consumer Price Index for May rose 1.% when expectations were for .2%. Separately, the Commerce Department says there were 914,000 new home starts, lower than the forecast for 955,000.

Hedge fund manager Daniel Loeb is tightening the screws on Sony (SNE). Loeb has sent Sony a new letter, pressuring the powerhouse of yesteryear to spin-off its electronics company. Loeb's firm "Third Point" has just upped its stake in Sony by five million shares to almost 7%. Sony's board says it will review Loeb's proposal.

Dish (DISH) has gotten served. Sprint (S) is now suing the company over its bid for Clearwire (CLWR). Sprint is Clearwire's majority owner, and has been waging its own takeover attempt. Also this morning, Bloomberg is reporting that Verizon (VZ) has expressed interest in acquiring Canadian company Wind Mobile. And, Johnson Controls (JCI), the country's largest auto-parts maker, may be considering a break-up of its electronics unit so it can sell off the pieces. Johnson previously said it wanted to sell the entire unit as a block.


Genmark Diagnostics (GNMK) is down 4% in early trading after falling 8-percent yesterday. Genmark has lowered its yearly sales outlook by $5-million down to $30-million. The company is citing a decrease in business from its largest customer, as well as challenges with medical reimbursements for its products. Not counting the losses we're seeing this morning, the stock is up 145% over the past year. It hit an all-time high of $16 a share last month.

Next up is Korn/Ferry (KFY) which says unchanged here because it trades on the NYSE, but has been up nearly 5% this morning. That's on top of a 5% gain yesterday. The recruiting services firm beat estimates with its quarterly report, posting profits of 32-cents a share when estimates were for 31-cents. That's up from 28-cents a year ago and reflects a 15% rise in revenue. This morning's gains put the stock up nearly 50% over the past year and approaching their 52-week high set back in February.

Now we look at Rambus (RMBS), which has been up as much as 4% in early trading here on the NASDAQ. The chip designer has announced a settlement with STMicroelectronics which puts a lawsuit over licensing to bed. You may recall it was just last week that Rambus settled a separate lawsuit with a South Korean chipmaker. Shares of Rambus have been up 54% over the past year, most of those gains coming since the start of 2013.

Finally, there's Adobe Systems (ADBE) which reports earnings after today's closing bell. Analysts are looking for the company to post earnings of 34-cents a share down sharply from 60-cents a year ago on revenue that teeters just above $1-billion. Adobe has notched a profit in each quarter of the past two years, but it has kept slipping over the last 12-months. The biggest drop came in the last quarter when profit plummeted 71% from the prior year.