Friday Morning Coffee with TradingMarkets

  • February 29, 2008
  • David Penn

Good Morning!

Happy Leap Day! Index Futures off by a Percent Pre-Open, Sales Lower at Ford, GM… Novell Profits Up… Bond Prices Rallying… Dollar Hits Record Low Against Euro, Yen… Dell Disappoints… AIG Posts Huge Quarterly Loss… Deckers Down in Pre-Market, 3Com Surging… Microsoft Admits Vista Flaws.

Asian stocks down… European stocks down… Greenbacks moving higher/lower against the Japanese yen… And the futures are trending lower in the hour before the bell.

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TradingMarkets 5 Business Stories You Need to Know

Dell Profits Down – Marketwatch

A rise in revenues does not offset costs related to acquisitions and restructuring as the company reported profits decline of 6% for the quarter. Dell’s earnings missed analyst expectations as the company warned of “conservative” buying habits by customers.

Fewer Discounts = Higher Profts at Gap – CNN Money

Redcued reliance on discounting helps boost profits at The Gap. The retailer also announced an increase in its dividend and a $1 billon increase in the company’s share buy back program.

Land of the Falling Dollar/Yen – DailyFX

Senior currency strategist Boris Schlossberg analyzes the likelihood of the dollar/yen’s fall below 105 will bring about more aggressive intervention by the Bank of Japan.

Paulson Backs “Strong Dollar” – Bloomberg

Without defining “strong dollar”, Treasury Secretary Paulson insists that a “strong dollar” is in America’s–and the world’s–best interest. Observers say Paulson’s rhetoric is reminiscent of similar talk during the dollar’s last slide last fall.

AIG Reports Massive Loss – Wall Street Journal

Larger than expected write-down leads to $5.3 billion quarterly loss for the insurance giant. The write-downs were related to a combination of heavy derivative use and subprime mortgage investment.

For more stories as they happen, go to our Breaking News section.

TradingMarkets 7 Stocks You Need to Know for Today

Here are 7 stocks for traders for today from TradingMarkets.com:

  • After the market close on Thursday, American International Group
    (
    AIG |
    Quote |
    Chart |
    News |
    PowerRating)     missed earnings by -$1.85, reporting a loss of $-1.25 versus estimates of $0.60.

  • Dell
    (
    DELL |
    Quote |
    Chart |
    News |
    PowerRating)     missed estimates by -$0.05, However, the company announced plans to buyback at least $1 billion of common stock in Q1.

  • Freddie Mac
    (
    FRE |
    Quote |
    Chart |
    News |
    PowerRating)     reported much worse than expected earnings yesterday, missing estimates by -$1.63. FRE’s fourth quarter loss came in at $2.5 billion.

  • Shares of Sprint Nextel
    (
    S |
    Quote |
    Chart |
    News |
    PowerRating)     tumbled after the company also disappointed. Sprint reported a net loss of $29.45 billion after virtually writing-off the cost of its 2005 Nextel acquisition.

  • Before the market open, Sepracor
    (
    SEPR |
    Quote |
    Chart |
    News |
    PowerRating)     is expected to report Q4 2007 earnings of $0.53.

  • Mirant
    (
    MIR |
    Quote |
    Chart |
    News |
    PowerRating)     reported fourth quarter EPS of $0.70 Friday morning before the bell.

  • Maker of business software, Novell
    (
    NOVL |
    Quote |
    Chart |
    News |
    PowerRating)     reported quarterly earnings of $0.08, beating Wall Street expectations.

For a list of today’s highest PowerRating stocks, click here.

TradingMarkets 5 Top PowerRatings Stocks for Today

Company
 Symbol PowerRatings
ScanSource SCSC 8
NutriSystem NTRI 8
Imax IMAX 8
Kindred Healthcare KND 8
Inverness Medical Innovations IMA 8

» View More Stocks

TradingMarkets Tracking the Wizards

Here’s Why I Will Never Buy Another Stock – TradingMarkets

Legendary technical analyst Richard Arms talks to traders about how best to enter trades, as well as his preference for using Equivolume charts, which dynamically combine price and volume.

Ken Fisher Sees 98 in 08 – Forbes

While many nervous investors and observers see the 1930s in contemporary fears of a credit crunch and economic weakness, money manager Ken Fisher sees better parallels to 1998–and is bullish on larger cap stocks in 2008.

Market Testing Wizards to the Rescue! – TradingMarkets

Got a trading plan? If so, are you serious enough about your success to have your trading strategy backtested by a team of market professionals? Click here for your free report on the “10 Steps to Successful Backtesting,” from Market Testing Wizards. Whether or not you are new to backtesting or an old hand at analyzing parameters and optimizing performance, Market Testing Wizards will let you know if your trading plan is truly a winning one.

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TradingMarkets Playbook

The futures are pointing to a decidedly negative opening following yesterday’s down day. From a technical perspective, the markets–particularly the S&P 500 and Dow Industrials appear to have run into resistance as they have tested their declining 50-day moving averages. To this end, and considering the high ratio of low PowerRating stocks to high PowerRating stocks, the negative mood in the market since yesterday should be little surprise.

Weak stocks that have been experiencing temporary strength are likely to be the low-hanging fruit for traders today, although strong stocks in pullback mode should also be worth a look. Days like this, when the futures look poised to add another percent to any pullback, are the kind of days that can help set up long trades by forcing strong stocks lower, closer to the type of below-the-close entries we recommend.

David Penn is Senior Editor at TradingMarkets.com.

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