| Market Summary |
Stocks rallied on Thursday, fueled by the tech sector and Wal-Mart’s profit prediction. Wal-Mart Stores and chemical maker DuPont forecasts started the session off on a good note. Wal-Mart (WMT: Charts, News, Offers) raised its outlook, citing expense controls and fewer markdowns. Shares of the retailer climbed 1.3% to $54.83 after the announcement. DuPont (DD: Charts, News, Offers) also raised its profit outlook and shot up 1.2%. The Nasdaq remained solid throughout the session after Intel (INTC: Charts, News, Offers) was upgraded to buy from Bank of America. The upgrade was part of a broader bullish note on the chip sector. Tech shares also got a lift after JPMorgan Securities raised its profit forecasts on Apple Inc. (AAPL: Charts, News, Offers). A couple of retailers turned in reports, which showed declines. Kohl's (KSS: Charts, News, Offers) and Gap (GPS: Charts, News, Offers) both reported double-digit decreases in same-store sales. In other news, a government report showed the number of U.S. workers applying for unemployment benefits tumbled by a greater-than-expected 53,000 last week. Commodities erased some gains, with crude oil losing 51 cents to $110.36 a barrel. Gold futures lost $5.70 to $931.80 an ounce.
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| Market News |
Rite Aid Corp. (RAD: Charts, News, Offers), the nation's third biggest drugstore chain, reported Thursday that it lost $960.4 million in its fourth quarter, mostly the result of a non-cash income tax charge, as it worked to absorb more than 1,800 stores acquired last year. Rite Aid said it expects to lose money in fiscal 2009 for a third straight year and that sales would be below what analysts are predicting. The company blamed a tough economy and spending to integrate the 1,850 Brooks and Eckerd stores it acquired last June in an effort to keep pace with its larger rivals, Walgreen Co. and CVS Caremark Corp. Its shares fell 13 cents, or 4.7 percent, to $2.61 in midday trading. (Source: Yahoo! Finance) Full Story
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Home decor retailer Pier 1 Imports Inc (PIR: Charts, News, Offers) posted a higher-than-expected quarterly profit on Thursday, sending its shares up nearly 9 percent. Net income from continuing operations in the fourth quarter was $13.7 million, or 16 cents a share, compared with a net loss of $58.7 million, or 67 cents a share, a year earlier. Total sales fell 8 percent to $436.7 million as Pier 1 closed 79 stores. Analysts, on average, had expected the company to earn 8 cents a share, before special items, on revenue of $448.8 million, according to Reuters Estimates. The company, which announced last week plans to sell its corporate headquarters in Fort Worth, Texas, also posted a 2.5 percent rise in comparable-store sales during the quarter. (Source: Reuters) Full Story
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Exxon Mobil Corp. (XOM: Charts, News, Offers), whose $40 billion profit last year again broke the record for a U.S. company, gave chairman and CEO Rex Tillerson an 18% raise to $21.7 million, according to an analysis of a proxy statement filed Thursday. Tillerson, 56, who's held the top job at the oil giant since 2006, received a salary of $1.8 million and a $3.4 million bonus in 2007. The company boosted Tillerson's salary to $1.9 million on Jan. 1. The bulk of Tillerson's package was from a stock award Exxon Mobil valued at roughly $16.1 million when it was granted Nov. 28, according to the company's filing with the Securities and Exchange Commission. The Texas native also received $429,792 in "other compensation" that included $229,331 for personal security, $41,122 for personal use of company aircraft and $9,150 for financial planning. (Source: CNN Money) Full Story
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| Featured Article from the InvestorGuide University |
Credit Mistakes
Your credit report may have errors on it, and this can hurt your ability to borrow. That's why it's important to check your credit reports periodically and get errors resolved. Here we describe the best procedure to follow to make sure you're protected so that errors don't hurt you. We also list the contact information of the three large credit reporting agencies: Experian, Equifax, and Trans Union.
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| Market Analysis |
Just when you thought it was safe to head back into the financial water, another market threatens to go sour, potentially leaving investors holding the bag for more than $9 billion of tarnished European bank debt. Once again, the landmine is in a sleepy corner of the global debt markets. Once again, things that never happen are happening. And, once again, those lovely mathematical models used to measure risk may turn out to be as useful as chocolate teapots. European banks raised a bunch of money in the past decade by selling callable notes, known as LT2s. The clue to their ability to turn toxic is the word "callable,'' meaning borrowers have the option to repay the bonds early, on preset dates. Because investors expect to get their money back on the earliest call date, they treat the securities as less risky than if they had to wait until the later maturity date. (Source: Bloomberg) Full Story
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Warren Buffett says it's only when the tide goes out that you learn who's been swimming naked. If that's the case, investors should keep their children away from the beach this proxy season, because the tide went way, way out for Corporate America in 2007, exposing all sorts of embarrassing details about business strategies and CEO compensation. How embarrassing? KB Home (KBH: Charts, News, Offers) had an abysmal year, losing $929 million on revenue of $6.4 billion. Shareholders also suffered from the home builder's anemic performance, as the company's share price dropped from $53 last February to the high teens by November. But CEO Jeffrey Mezger weathered the storm. In addition to his $1 million base salary, he was awarded a $6 million cash bonus for 2007. (Source: USA Today) Full Story
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Wealth funds did not do it. Joe Lewis, the billionaire investor who bet and lost on Bear Stearns, definitely did not do it. Will private-equity firms be any more successful at calling the end of the credit crunch? They seem ready to do so. TPG, a large buy-out group, led a $7 billion injection of capital into Washington Mutual (WaMu), a Seattle thrift that grew into America’s sixth-biggest bank and came a cropper in subprime mortgages. TPG is also among a trio of big-name private-equity firms (Apollo and Blackstone are the others) that are reportedly negotiating with Citigroup to snap up $12 billion-worth of leveraged loans that have been stuck on the bank’s balance sheet since the credit markets froze. A deal may be announced when Citi reveals first-quarter results on April 18th. (Source: The Economist) Full Story
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