Stock Market Wrapup Feb. 23
Market sentiment continued to be bearish at the close of the week as stocks finished modestly lower on the day. Oil prices put some pressure on the stock market today as crude climbed to its highest closing price this year, ending the day above $61 a barrel. Treasury prices also advanced, with the yield on the 10-year Treasury note falling to 4.67%.
The Dow Jones Industrial Average was hurt by weakness in Microsoft (Nasdaq: MSFT - News), which lost a ruling yesterday involving two patents related to the MP3 music format that are owned by Alcatel-Lucent (NYSE: ALU - News). A federal jury in San Diego ordered the software maker to pay Alcatel-Lucent $1.5 billion for infringing on patents that are at the heart of the boom in online digital music. Alcatel-Lucent filed the suit in 2003 contending it was owed royalty payments by Microsoft. The telecom equipment maker's Bell Laboratories unit, which along with Germany's Frankhofer Institute developed the data compression technology, holds the patents in question. The MP3 format powers the boom in downloadable music and is used by many companies, including Apple (Nasdaq: AAPL - News) for its iTunes music store and iPod players, other makers of digital music players, and by online service providers like Yahoo (Nasdaq: YHOO - News). Microsoft said it would ask the judge to reduce the jury award and that it would likely appeal the decision.
Home improvement retailer Lowe's (NYSE: LOW - News) reported a -12% drop in its fiscal Q4 earnings, but the stock added 4% on the company's upbeat outlook for the second half of the year. The company's results in the quarter ended February 3rd were hurt by tough comparisons against the 2005 final quarter, which was beefed up by post-Hurricane Katrina spending, and the slump in the housing market. The company suggested sales declines have bottomed, and forecasted same-store sales for the full year will be flat to up 2%, although current-quarter same-store sales are expected to be down about -3%.
Clear Channel Communications (NYSE: CCU - News), the nation's largest operator of radio stations, said its Q4 net income dropped -54% to $211 million, or 43 cents per share, from $462 million, or 86 cents per share, a year earlier. The company blamed the profit drop on higher expenses, some related to an accounting change. Clear Channel did not host an earnings conference call because it has an $18.7 billion buyout offer on the table from a group of private equity investors led by Thomas H. Lee Partners and Bain Capital Partners.
Financial stocks took another hit today from worries over weakness in the subprime lending sector. Lender NovaStar Financial (NYSE: NFI - News) suffered its third-consecutive sharp drop, losing -9% today. NovaStar closed on Tuesday at $17.57, but lost -42% of its value on Wednesday after the company reported a loss of -$14.4 million, or -39 cents a share, in Q4 and said it was considering changing its status as a real-estate investment trust. Subprime lender New Century Financial (NYSE: NEW - News) was also down sharply this week, losing another -6% today.
Big banks weren't immune to the gloom surrounding the subprime sector. Among the day's decliners were J.P. Morgan Chase (NYSE: JPM - News), Wachovia (NYSE: WB - News), and Bank of America (NYSE: BAC - News), though their declines were nowhere near as steep as those of the subprime lenders.
By the BullMarket.com Staff
The Dow Jones Industrial Average was hurt by weakness in Microsoft (Nasdaq: MSFT - News), which lost a ruling yesterday involving two patents related to the MP3 music format that are owned by Alcatel-Lucent (NYSE: ALU - News). A federal jury in San Diego ordered the software maker to pay Alcatel-Lucent $1.5 billion for infringing on patents that are at the heart of the boom in online digital music. Alcatel-Lucent filed the suit in 2003 contending it was owed royalty payments by Microsoft. The telecom equipment maker's Bell Laboratories unit, which along with Germany's Frankhofer Institute developed the data compression technology, holds the patents in question. The MP3 format powers the boom in downloadable music and is used by many companies, including Apple (Nasdaq: AAPL - News) for its iTunes music store and iPod players, other makers of digital music players, and by online service providers like Yahoo (Nasdaq: YHOO - News). Microsoft said it would ask the judge to reduce the jury award and that it would likely appeal the decision.
Home improvement retailer Lowe's (NYSE: LOW - News) reported a -12% drop in its fiscal Q4 earnings, but the stock added 4% on the company's upbeat outlook for the second half of the year. The company's results in the quarter ended February 3rd were hurt by tough comparisons against the 2005 final quarter, which was beefed up by post-Hurricane Katrina spending, and the slump in the housing market. The company suggested sales declines have bottomed, and forecasted same-store sales for the full year will be flat to up 2%, although current-quarter same-store sales are expected to be down about -3%.
Clear Channel Communications (NYSE: CCU - News), the nation's largest operator of radio stations, said its Q4 net income dropped -54% to $211 million, or 43 cents per share, from $462 million, or 86 cents per share, a year earlier. The company blamed the profit drop on higher expenses, some related to an accounting change. Clear Channel did not host an earnings conference call because it has an $18.7 billion buyout offer on the table from a group of private equity investors led by Thomas H. Lee Partners and Bain Capital Partners.
Financial stocks took another hit today from worries over weakness in the subprime lending sector. Lender NovaStar Financial (NYSE: NFI - News) suffered its third-consecutive sharp drop, losing -9% today. NovaStar closed on Tuesday at $17.57, but lost -42% of its value on Wednesday after the company reported a loss of -$14.4 million, or -39 cents a share, in Q4 and said it was considering changing its status as a real-estate investment trust. Subprime lender New Century Financial (NYSE: NEW - News) was also down sharply this week, losing another -6% today.
Big banks weren't immune to the gloom surrounding the subprime sector. Among the day's decliners were J.P. Morgan Chase (NYSE: JPM - News), Wachovia (NYSE: WB - News), and Bank of America (NYSE: BAC - News), though their declines were nowhere near as steep as those of the subprime lenders.
By the BullMarket.com Staff
Labels: AAPL, ALU, BAC, CCU, JPM, LOW, MSFT, NEW, NFI, WB, YHOO
posted by Stock Administrator @ 8:01 PM
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