Today features an update for Macintosh laptops from Apple (AAPL), an upgrade for BB&T (BBT), a plant closure for General Motors (GM), and Sovereign Bancorp (SOV) finds a buyer. Here is what you need to know about this morning's news.
Apple
Computer king Apple (AAPL: sentiment, chart, options) is expected to upgrade its Macintosh (Mac) laptop line at an event this afternoon at the firm's California headquarters. Invitations were e-mailed last week, but were rather nebulous in details. Specific details aside, the AAPL rumor mills are rife with speculation that we will soon be privy to a MacBook featuring AAPL's lowest price to date. Piper Jaffray expects the company to lower the price tag on its entry-level MacBook from $1,100 to (as low as) $900. Other rumors have the new computer with an aluminum casing and a touch pad that can respond to gestures (like the iPhone). As the prices for laptops drop below $500, AAPL has stood firm keeping the prices on its laptops a tad pricier, but a lower price tag could encourage holiday shoppers to dish out the cash.
During the past 4 weeks, AAPL has shed 21.5%; however, the firm rallied yesterday to close atop the 100 level for the first time in 6 trading sessions. Ahead of today's open, shares of the firm are set to gap up to the 115 region - 5 points higher than yesterday's close. This higher open is good for AAPL, but there is plenty of room for pessimism to creep its way into the picture. AAPL's Schaeffer's put/call open interest ratio (SOIR) of 0.53 is lower than 99% of the past year's worth of readings. In addition, 12 of the 20 analysts tracking AAPL rate it a "strong buy." This glut of optimism could unwind if the stock continues to struggle, or any news disappoints. A shift in sentiment could push the stock lower.
BB&T
This morning, Citigroup issued upgrades for 12 U.S. banks to "buy." One of these banks is BB&T (BBT: sentiment, chart, options) , which Citigroup upped to "buy" from "hold." In addition, the brokerage house noted that BBT is the best positioned of mid-cap regional banks. Elsewhere, Raymond James upped the regional bank to "outperform" from "market perform." A major reason for the bevy of upgrades was the belief that the $250-billion capital injection removes capital risk.
The tandem upgrades have BBT trading higher in pre-market action. It appears that the stock is set to take out resistance from its 10-month and 10-week moving averages, both of which could now act as support. The firm's sentiment backdrop shows plenty of opportunity for pessimism to unwind. BBT's SOIR of 1.39 is higher then 62% of those taken during the past 52 weeks, indicating bearish feelings from option players. There is also plenty of room for upgrades, as 18 of the 20 analysts tracking the firm rate it a "hold" or worse.
Sovereign Bancorp
Sticking with regional banks, Sovereign Bancorp (SOV: sentiment, chart, options) reached an agreement last night with Banco Santander SA (STD: sentiment, chart, options) . Santander is purchasing the remaining 75% (or so) of SOV that it doesn't already own for roughly $1.9 billion in an all-stock transaction. The deal is expected to close in the first quarter, and it values SOV shares at roughly $3.81 apiece - a 2.5% premium over yesterday's closing price.
SOV is currently higher in pre-market action, trading slightly above the $3.81 price Santander will dish out. SOV has been battered during the past 52 weeks, shedding 78% as it retreats from its 10-month moving average. The last time SOV finished a month north of this trendline was April 2007. As for the rest of the sentiment, analysts are bearish, but upgrades will likely do little to push the stock much higher than the price Santander will pay for the firm.
General Motors
Automaker General Motors (GM: sentiment, chart, options) is making a bit of news this morning. The firm announced that it will close a metal-stamping plant in Wyoming, Michigan by the end of 2009. The Associated Press report noted that the closure will impact roughly 1,340 hourly jobs. In addition, GM stated that its GMAC Financial Services arm will adopt a more conservative policy for auto financing thanks to the global credit crisis. The changes include limiting purchases to contracts with a credit score of 700 or above, in addition to restricting contracts with higher advance rates and longer terms.
After tacking on more than 33% yesterday, GM is on pace to start this morning considerably higher. The problem is that the stock continues to face quite a bit of overhead resistance in the form of its 10-week and 20-week moving averages. This duo has pushed the stock lower consistently since November 2007, with the equity finishing atop the trendlines once. Surprisingly, GM's SOIR is lower than 95% of those taken during the past 52 weeks, indicating optimism from option players. On the other hand, analysts are bearishly aligned, as 7 of the 8 following the automaker rate it a "hold" or worse. Finally, 20% of GM's float is sold short, leaving the door open for a short-covering rally in the wake of any good news.
Did you know that you can get headlines for my articles emailed directly to you? If you'd like to take advantage of this service, simply click here and sign in with your Schaeffer's username and password. Once on the alerts page, select author from the first drop down box, select how often you want to be alerted (intraday, daily, weekly, or monthly), and enter Mark Fightmaster into the third box.
Discuss this article:
Post your own comment
More articles:
Cincinnati, Ohio-based grocer The Kroger Co. (KR) is scheduled to release its second-quarter earnings report before the start of regular trading on the morning of Tuesday, Sept. 14. Despite recent signs of improvement in the U.S. economic recovery, Wall Street isn't holding its breath for a strong quarterly showing from the company. The consensus is currently expecting a profit of 36 cents per share from Kroger, a figure that is down 3 cents from the same quarter in fiscal 2009. read more...
Pharmaceutical stocks have been hot today, with M&A mania sweeping Bristol Myers Squibb Co. (BMY), new drug approval for Merck & Co. Inc. (MRK), and a dissolved partnership at Pfizer Inc. (PFE). Let's take a closer look at these fundamental developments, while also examining each of these drug makers' technical and sentiment backdrops. read more...
Tech titan Apple Inc. (AAPL), financial firm Huntington Bancshares (HBAN), and office-supplies issue Staples, Inc. (SPLS) were all on analysts' radar this morning. However, to put today's fresh brokerage attention into perspective, we have to consider each stock's technical and sentiment backdrops. read more...
Altera Corporation (ALTR) raised its third-quarter outlook on Tuesday, revealing that it now expects revenue to rise 10% to 14% -- well above the semiconductor company's previous forecast for growth of just 4% to 8%. ALTR credited a growing market for its raised forecast, explaining that "the telecom and wireless vertical market is on track to be the fastest growing portion of the business, driven in large part by 3G wireless deployments and needs for additional wireless backhaul capacity." ALTR is slated to release its third-quarter report on Oct. 19. read more...
The Dow Jones Industrial Average (DJIA) bulls have capitalized on this morning's moderately positive open, and parlayed those gains into a nearly 75-point rally. The DJIA is now trading comfortably above potential short-term support in the 10,400 region, though resistance still looms overhead in the 10,450 area, which is home to the Dow's 200-day moving average. While Wall Street appears to have put European debt concerns aside for the time being, the market is not out of the woods yet. The Fed's Beige Book is slated for release at 2:00 p.m. Eastern time, with many economists looking for evidence that last week's better-than-expected economic data was more widespread. read more...
The following is a reprint of the market commentary from the September edition of the Option Advisor, published on Aug. 26. It also appeared in the summer edition of SENTIMENT magazine. For additional information on the Option Advisor, including how to subscribe, click here. For the complete online edition of SENTIMENT magazine, click here. read more...
Talbots Inc. (TLB) slipped into the earnings spotlight before the open this morning to announce a higher-than-expected quarterly profit. Tighter inventory management boosted margins, but sales fell short of Wall Street forecasts. read more...
Today's column includes a look at a rise in put trading on Charles Schwab (SCHW), while call trading increased on Nvidia (NVDA) and United States Steel (X). Each day, 3 Stocks to Watch focuses on stocks seeing heavy options trading and gives you a unique insight into each stock's sentiment backdrop. read more...
Schaeffer's -- not Fifth Third's, as he was introduced -- Senior Technical Strategist Ryan Detrick gazed into his crystal ball on CNBC this morning, discussing what to expect in September. Historically speaking, September is regarded as a "weak" month, but Ryan revealed that September has actually been very strong in the past five years. read more...
Proving that big corporations are all about second chances, Oracle Corporation (ORCL) on Monday named Mark Hurd as one of its two presidents, as current co-president Charles Phillips is leaving the company. You may remember Mark Hurd from his work as chief executive officer at Hewlett-Packard Company (HPQ) -- or by his tabloid-meriting resignation from HPQ in August. read more...
working... 
