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Volatility, Vodafone and Verizon; Zuckerberg on Defense; Dimon’s Curse

Dan Berman
Hot Stock Minute
Volatility, Vodafone and Verizon; Zuckerberg on Defense; Dimon’s Curse

This Wednesday is brought to you by the letter V for Volatility. It looks like markets are in for more tumultuous times. The good news: futures are up at this hour, following the Dow's triple-digit drop yesterday. But perhaps now more than ever, it seems like that could all change on a dime. Yahoo! Finance Senior Columnist Mike Santoli has more in the video above.

There are a number of other headlines this morning that suggest trouble for the economy. First, Pimco now says there's more than a 60% chance of a global recession in the next three to five years because of high debt levels. Also, Greece had been lowered to "emerging market status" from developed by MSCI, the first country to suffer such a blow. And JPMorgan's (JPM) credit rating outlook has been revised to negative by S&P. The ratings firm cites a likelihood of waning government support for U.S. banks. Speaking of JPMorgan, company CEO Jamie Dimon spoke yesterday at a conference about the London Whale scandal. He said there was no hiding, lying, or "B.S."ing on his part, although he didn't use any abbreviations.

One for all, all for one. Google (GOOG), Facebook (FB) and Microsoft (MSFT) are suddenly acting like musketeers. All three are on the same page, asking for permission to reveal details about the government's data tap of their information on users. Google went first, sending an open letter to the Justice Department. Microsoft issued a similar request several hours later, and then came Facebook within minutes. Google, for its part, says it complied with far fewer requests than it received. The other two companies are not commenting on whether they challenged any requests.

Vodafone is trying to line up a buyer for itself. The British-based wireless giant has approached German cable company Kabel about a possible takeover. Such a transaction could come to more than $10-billion. Adding to the intrigue, Vodafone maintains a 45% stake in Verizon Wireless, its joint venture with Verizon (VZ). But Verizon has been talking about buying Vodafone out. As for Verizon, its shares are up 13% this year.


First up is Ulta (ULTA), the salon and cosmetics chain which is looking rather attractive at this hour, up 9%. Ulta posted earnings of 65-cents a share when it released quarterly results after yesterday's closing bell. That beat estimates by 3-cents on revenue that was also higher than expected. Compare the numbers to a year ago and you can see both earnings and revenues are up roughly 20%. Ulta says store traffic is increasing as shoppers look for products and brands they may not find in department stores. Also, that its online sales are booming, with a 70% increase over the past year. Prior to this morning's climb, shares of Ulta are down 17% this year. Looking at the past 52-weeks, they're down 11%.

Next up is Rambus (RMBS), which has climbed an impressive 9% in early trading. The tech licensing company has settled a patent case dating back to 2006 with South Korean chip-maker SK Hynix. The two companies have now signed a 5-year licensing deal that will net Rambus over $200-million. Even prior to this morning's climb, Rambus shares are up 65% year-to-date. Right now they're trading at a new 52-week high.

Now we look at clothing conglomerate PVH (PVH) which reports earnings after the closing bell. The company is expected to post earnings of $1.35 a share on about $1.9 billion in revenue. That would be sales growth of about 34% over last year. A reminder that PVH includes not only Philip Van Heusen but also Calvin Klein, Tommy Hilfiger, and Izod. It has beaten analyst estimates in all four of the last quarters. Despite some darts up and down this year, the stock is currently within 1-percent over where it started 2013. However, it's up a whopping 42% over the past year which includes a spike in October.

Finally there's GameStop (GME) which spiked yesterday, up 8%. It was actually the second biggest gainer on the NYSE behind only Dole (DOLE) which got a takeover bid. As for GameStop, it's gaining on anticipation over Microsoft's new Xbox One and Sony's (SNE) Playstation 4 game consoles. The chain is also benefitting from Microsoft’s announcement that it won't charge a fee for people who play preowned games on the new Xbox. GameStop's stock has more than doubled in the past year up 103%. So much for worries about a shift to mobile.