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Nikkei Darts Higher; Apple Conference Kicks Off; Google Bests Facebook

Dan Berman
Hot Stock Minute
Nikkei Darts Higher; Apple Conference Kicks Off; Google Bests Facebook

The Nikkei resumed a rapid rise today after falling into bear territory on Friday. The index climbed nearly 5% as it began the new trading week. The move higher comes on the heels of a jump here at home. U.S. stocks had their second best day of the year on Friday.

Apple (AAPL) kicks off its developers conference today. The company is expected to announce updated iOS software for its mobile devices. Sources say it will abandon Apple's longtime approach of using icons that resemble real-life objects, instead using solid backgrounds and more white space. Apple is also expected to announce the launch of iRadio now that it has inked deals with all the major record labels. Apple stock remains down 20% year-to-date. It has shed another 2% in the past month.

It looks like Google (GOOG) is winning Waze. There are several reports this morning that it will pay more than $1-billion for the map app. Waze was previously in talks with Facebook (FB) and Apple about an acquisition. Some fast facts about the company: it's officially based in Palo Alto although its core operations are in Israel. Waze claims to have 47-million users worldwide. The service has a social network element to it, with users suggesting alternate routes to the ones generated by the app itself.

There are a number of other deals and proposals to talk about this morning: First, AstraZeneca (AZN) is buying respiratory drug specialist Pearl Therapeutics to beef-up its pipeline. Next, Irish drug-maker Elan (ELN) has rejected a new offer from Royalty Pharma, saying it's assessing interest from other parties. And business information provider IHS (IHS) is buying Carfax's parent company R.L. Polk. No word yet on the price, but this deal could be as much as a billion dollars. Polk has been a leader in the gathering of auto-market data for nearly 100-years. As for purchaser IHS, it's up about 5% over the past year. The company has a market cap of about $7-billion.


First up as we kick-off the new week is Lululemon (LULU) which is about to update us on its bottom line. The maker of yoga clothes is expected to post earnings of 30-cents a share when it releases quarterly results after the closing bell. That would be a decrease from a year ago, but on considerably higher revenue. The company lowered its outlook after that scandal in which its signature pants were pulled from store shelves for being just a wee too transparent in certain places. Still, shares are up 10% this year, and have climbed 24% since the recall became public.

Next up is Pier 1 Imports (PIR) which also reports sometime today. Shares of this company have risen 55% over the past year, suggesting this is more than a high tide lifting all ships. Pier 1 is expected to post earnings of 19-cents a share up from 16-cents last year on an increase of about 10% in revenue. The chain appears to be benefitting from the turnaround in housing. It's also in the middle of a 3-year investment plan which includes refurbishing many stores.

Now there's McDonald's (MCD), which reports its May sales today. The company is trying to rebound from recent troubles. McDonald's actually gets 40% of its revenues from Europe. It is now trying to localize menus to boost business. Shares of McDonald's are up about 9% year-to-date. They're up close to 14% over the past year. They hit a 52-week high above $100 a share back in April.

Finally there's Tesla (TSLA). Barron's ran a cover story on the company this weekend questioning the value of the stock. Shares are up 188% year-to-date. They've jumped 33% in just the past month. The Barron's article cites two concerns: whether the cost of electric batteries will come down, increasing Tesla's profit margins. And the fact that CEO Elon Musk says he sees sales reaching 40-thousand cars a year at most. On the upside, the Model S sedan has won just about every car award in sight.