May 31, 2012 6:33 pm
Stocks Off Lows After IMF Report; FB Below $27 - CNBC
Stocks recovered Thursday hover around the flatline even after the IMF denied an earlier report that it is in talks to provide a rescue loan to Spain.
The Dow Jones Industrial Average bobbed in and out of positive territory, after posting a triple-digit loss in the previous session. The blue-chip index has not seen a two-day win streak this month and is on track for its biggest monthly point drop since May 2010.
Wal-Mart [WMT Loading... () 
] led the Dow gainers, while Caterpillar [CAT Loading... () ] slipped.
The S&P 500 and the Nasdaq also shaved most of their losses. The CBOE Volatility Index, widely considered the best gauge of fear in the market, slipped near 24.
Among the key S&P sectors, energy slumped, while telecoms edged higher.
An IMF spokesman said the annual economic talks between the IMF and Spanish authorities will take place next week.
“They're not going to make any statement about anything until something happens, but this should remind us that there are pools of liquidity,” said Zach Karabell, president of River Twice Research. “It’s not like anyone’s been unprepared for these realities.”
Meanwhile, Facebook [FB Loading... () ] recovered after dipping below $27 a share, plunging nearly 30 percent from its market debut of $38 a share. The company is now valued at around $79 billion compared with $104 billion at the time of its IPO. Meanwhile, S&P Capital IQ lowered its price target on the firm to $27 from $30.
Stocks had been lower for most of the morning following an earlier batch of disappointing economic reports.
Weekly jobless claims rose 10,000 to a seasonally adjusted 383,000, gaining for the fourth-straight week, according to the Labor Department. And the U.S. economy grew at a slower pace than expected in the first quarter with GDP increasing at a 1.9 percent annual rate, according to the Commerce Department.
Business activity in the Midwest slipped to 52.7 in May from 56.2 in April, according to the Chicago ISM.
And private-sector jobs growth came in at a disappointingly weak 133,000 from April to May, according to a report from ADP and Macroeconomic Advisors.
The reports come a day ahead of the widely-followed May government jobs. Non-farm payrolls are expected to show a gain of 150,000 in May, according to a Reuters poll, after a small gain of 115,000 new jobs in April, the fewest in six months.
Morgan Stanley [MS Loading... () ] CEO James Gorman defended his bank’s performance as lead underwriter on Facebook’s public offering, despite waves of criticism from investors and a potential legal review of the deal’s marketing.
In addition, the investment bank plans to buy 14 percent more of Smith Barney from Citi [C Loading... () ] and will begin a 90-day process determine the fair market value of the additional stake.
Most retailers posted solid same-store sales gains in May, with chains such as Target [TGT Loading... () ], TJX [TJX Loading... () ], and Limited [LTD Loading... () ] topping analysts' estimates for the month.
Meanwhile, Costco [COST Loading... () ], Buckle [BKE Loading... () ] and Wet Seal [WTSLA Loading... () ] all fell short of expectations.
Striking workers at a Caterpillar [CAT Loading... () ] plant in Illinois rejected the company's latest contract offer, an official with the International Association of Machinists and Aerospace Workers said.
Billionaire investor Carl Icahn, who last year failed to get his nominees elected to the board of Forest Laboratories [FRX Loading... () ], plans to back another slate of directors at the drugmaker's next shareholder meeting, according to a regulatory filing.
Talbots [TLB Loading... () ] skyrocketed almost 100 percent after private equity firm Sycamore Partners said it will acquire the women's clothing chain in a deal worth about $193 million.
Also on the M&A front, Gaylord Entertainment [GET Loading... () ] rallied after the company said it will sell the Gaylord hotels brand to Marriott International [MAR Loading... () ] for $210 million in cash.
U.S. Airways Group [LCC Loading... () ]and private equity firm TPG Capital may team up to bid for American Airlines' parent, AMR, people familiar with the discussions told Reuters.
Meanwhile, JetBlue [JBLU Loading... () ] gained after UBS raised its rating on the firm to "buy" from "neutral" and boosted its price target to $8 from $6.
Joy Global [JOY Loading... () ] tumbled after the mining equipment maker said it expects order rate to moderate and sales to remain unchanged over the next few quarters.
TiVo [TIVO Loading... () ] reported a bigger-than-expected quarterly loss and forecast another loss for the current quarter, as the maker of television recorders fights costly legal battles to protect its patents.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
FRIDAY: Non-farm payrolls, personal income & outlays, ISM mfg index, construction spending, auto sales, Wal-Mart shareholders mtg
More From CNBC.com:
Stocks cap worst month in two years - The Age
It was a month many investors would rather forget as heightened worries about Greece and other debt-laden European economies sent stock markets and the dollar plunging.
The benchmark ASX200 share index trimmed its losses during the day but still ended about 7.3 per cent lower for May - the worst monthly return since Europe's debt crisis erupted in May 2010.
The index closed down 17.9 points, or 0.44 per cent, at 4,076.3 points after being about 1.5 per cent lower at one point.
The broader All Ordinaries index gave up 14.9 points, or 0.36 per cent, to 4,133.8. The index's loss was about 7.5 per cent in May, or the equivalent of about $100 billion in market value.
For the month, the biggest losers among the major stocks included Aquarius Platinum losing 45 per cent, Whitehaven shed 25 per cent, Toll Holdings slumped 21 per cent, OneSteel fell 19 per cent and Fortescue Metals sank 18 per cent.
Top gainers for May included Ramsey Health, up 7.7 per cent, News Corp 6.8 per cent, AGL Energy 4.7 per cent, Coca-Cola Amatil 3.2 per cent and CSL 2.7 per cent.
European shares, meanwhile, opened slightly higher after Wednesday's steep losses, with the FTSEurofirst 300 up 0.4 perc ent at 979.65 points, on track for its biggest monthly loss since August when markets were similarly beset by fears over Europe's debt crisis.
Dollar, bonds
The Australian dollar edged back above the 97 US-cent level after earlier touching six-month lows on a global retreat to the greenback.
At its local close, the dollar was buying 97.2 US cents, placing it on course for a loss of about 6.8 per cent in May - its worst month since it dived 8.8 per cent last September.
Yields on Australian government debt maturing in two years or longer fell to record lows as a report showed home-building approvals unexpectedly dropped in April, boosting speculation the Reserve Bank will cut its cash rate again when it meets on June 5.
“Spain is becoming a huge problem,” said Derek Mumford, a director in Sydney at Rochford Capital. “A lot of money is going to be needed to bail them out. The Aussie (dollar) will inevitably be dragged down to a very important support area at 94.50 to 95 US cents.”
The 10-year Australian yield slid below 3 per cent for the first time, to as low as 2.856 per cent, the least in data compiled by Bloomberg going back to 1969. The rate on two-year notes fell to 2.108 percent, also an all-time low.
Partial rebound
While there was a partial recovery in the afternoon session, the Australian sharemarket ended well down amid broadbased declines.
‘‘Fear has definitely got the market around its little finger today,’’ CMC Markets sales trader Ben Taylor said in a research note.
Financial stocks closed 1.14 per cent lower and were the worst performers on the market, according to IRESS data.
ANZ was down 7 cents at $20.90, CBA fell 34 cents to $49.40 and Westpac slipped 13 cents to $20.29.
NAB, which was trading without a dividend today, posted the biggest declines among stocks in the S&P/ASX50, dropping 5.63 per cent, or $1.34, to $22.48.
Mr Taylor said the financial sector’s declines came as Moody’s probed the strength of lenders mortgage insurance providers.‘
"Brokers are also moving negative on the banks considering the lower growth environment, potential for margin squeeze and the difficulty to foresee a change in economic conditions,’’ Mr Taylor said.
Standard & Poor’s Ratings Services, meanwhile, gave South Australia a blow, lowering its long-term rating to 'AA+' from 'AAA', on the state government's debt and that of its financing arm, South Australian Government Financing Authority. It affirmed the 'A-1+' short-term rating. "The outlooks on the ratings remain negative," the agency said.
Miners off
Market heavyweight BHP was down 20 cents at $31.97, while Rio Tinto fell 49 cents to $56.86.
On a positive note, traditionally defensive stocks held up well on the day, with the healthcare sector gaining 1.15 per cent, utilities rising 1.01 per cent and consumer staples advancing 0.73 per cent.
In a late development, casino operator Echo Entertainment caved into demands from billionaire James Packer for an extraordinary meeting of shareholders. Echo shares rose 6 cents, or 1.4 per cent, to $4.40.
Also making news on Thursday, news reports said Telstra was considering buying television broadcaster Nine Entertainment Co.
Telstra closed down 1 cent at $3.55.
David Jones said total sales for the three months to April 28 fell 2.9 per cent, with the department store chain gearing up for a big end of financial year clearance.
The stock fell 4 cents at $2.21.
The spot price of gold in Sydney was $US1,562.70 per fine ounce, down $US14.175 from yesterday’s local close of $US1,548.525 per ounce.
Gold, though, was on course for a fourth consecutive monthly loss, trading about 6 per cent lower in US-dollar terms for May.
National turnover was 1.9 billion shares worth $5.8 billion, with 481 stocks up, 499 down and 394 unchanged.
AAP with BusinessDay, Bloomberg, Reuters
Stocks, euro drop as deadlock continues in Greece - Yahoo Finance
NEW YORK (AP) -- A political stalemate in Greece rattled financial markets worldwide on Monday, driving U.S. stocks lower.
The euro sank to a three-month low against the dollar and borrowing costs for Spain and Italy jumped as bond traders anticipated that financial stress could spread far beyond Greece. Investors dumped risky assets and plowed into the safety of the Treasury market, pushing yields to their lowest levels this year.
The Dow Jones industrial average dropped 125.25 points to close at 12,695.35. The Dow has lost more than half of its gains for the year in the past two weeks as worries resurface about Europe and the strength of the U.S. economy.
In Athens, talks between political parties to form a government dragged into a second week. The uncertainty has raised concerns that Greece could miss a debt payment and drop the euro currency. The worry is that if Greece leaves the currency union, bond traders may demand steeper borrowing rates from other troubled countries and push them deeper into debt.
The turmoil could easily spread to the U.S. through the banking system. "The large banks are globally connected," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott. "The concrete fear is that if Greece exits the euro, that would hurt European banks. They'll pull back lending to U.S. banks and then they'd be in worse shape."
In other trading, the Standard & Poor's 500 index dropped 15.04 points to 1,338.35. The Nasdaq composite sank 31.24 points to 2,902.58.
The losses swept across the market. All 10 of the industry groups within the S&P 500 fell.
JPMorgan Chase's $2 billion trading loss continued to hang over bank stocks. JPMorgan dropped 3 percent following news that the executive overseeing its trading strategy would step down. Morgan Stanley and Citigroup, two banks with large trading operations, sank more than 4 percent.
The loss to JPMorgan appears "manageable," said Matt Freund, a portfolio manager at USAA Investments. "But people are looking at other banks and wondering who's going to be next? What else could be lurking?"
Major markets in Europe plunged. France's CAC-40 and Germany's DAX lost 2 percent. Benchmark indexes fell nearly 3 percent in Italy and Spain.
Traders shifted money into the safest of government bonds, pushing Treasury prices up and their yields down. The yield on the 10-year note hit a low for the year, 1.77 percent.
Since hitting its high for the year on May 1, the Dow has been on a steady slide, closing lower on seven of the previous eight trading days. The Dow's 1.7 percent loss last week was its worst since Dec. 16.
Despite the broad market decline, some stocks posted gains:
— Chesapeake Energy Corp. jumped 4 percent on reports that the investor Carl Icahn bought a stake in the natural gas company. Chesapeake's CEO said he'd welcome an investment by Icahn, who is known for shaking up companies.
— Yahoo gained 2 percent. The company replaced its CEO, Scott Thompson. Yahoo reportedly pushed Thompson out for padding his resume.
— Electronics retailer Best Buy Co. rose 1 percent after the company's founder, Richard Schulze, said he would step down as chairman. An investigation found that he knew the CEO was having a relationship with a female employee and didn't tell an audit committee.
Stocks rebound from early slump - MSN Money
Updated: 2:43 p.m. ETStocks have stormed back from early losses as bargain-hunting appears to be trumping concerns that the economic uptick this winter wasn't as strong as thought and may be running out of steam.
The Dow Jones industrials ($INDU) have been flirting with a small gain on the day after trading down as many as 103 points. The Standard & Poor's 500 Index ($INX) briefly fell below 1,300, a key support level, but has recovered most of its losses. Still, stocks look to close May with their worst monthly performance since at least September.
The rebound appeared to be linked to a Dow Jones report that the International Monetary Fund is starting to think about contingency plans to support Spain if it can't find the money to finance a bailout of Bankia, its third-largest bank by assets.
The rebound came after the government reported that the U.S. economy grew more slowly in the first quarter than thought. Job creation in the private sector may be slowing, and jobless claims are ticking higher. Meanwhile, the Chicago Purchasing Managers' report for May fell for the third straight month. The reports suggest the jobs report for May -- to be issued Friday -- may be weaker than expected.
At the same time, European stocks were mostly lower as worries about Spain and Greece continued. Crude oil (-CL) dropped below $87 a barrel but moved up after the IMF report. Gold (-GC) also moved lower.
At 2:43 p.m. ET, the Dow was up 15 points to 12,435. The S&P 500 was down 1 point to 1,312, and the Nasdaq Composite Index ($COMPX) was off 11 points to 2,826. The index had been off as many as 35 points. The Nasdaq-100 Index ($NDX) was off 9 points to 2,529. Apple (AAPL), which represents about 12% of the market capitalization of the stocks in the Nasdaq-100, was down 49 cents to $578.68 after falling to as low as $571.46.
Article continues below.
The IMF doesn't want to extend aid to Europe until it is convinced Europe has run out of money.
Facebook falls under $27; Joy Global is hit
Facebook (FB) briefly dropped to as low as $26.88 but has recovered to $27.87, down 32 cents. That's nearly 29% below where its initial public offering was priced on May 17.
Mining-equipment maker Joy Global (JOY) was down $3.17 to $55.71 after cutting earnings and revenue forecasts. Tivo (TIVO) was off 61 cents to $8.36 as the digital video recorder pioneer reported a loss.
Shares of Talbots (TLB) almost doubled to $2.44 as the women's apparel retailer agreed to be bought by Sycamore Partners for $369 million including debt.
A crummy May guts the year's early gains
As things stand, the Dow may end May down 6%, with the S&P 500 down 6.6% and the Nasdaq off 8%. The losses for the Dow and the S&P 500 may be their worst since September. The Nasdaq's loss is its worst since May 2010.
The May slump has cut the market's gains for the year by more than half. The Dow is up 1.6% on the year. It had been up as much as 8.7% on May 1. The S&P 500 has seen its gain for the year shrink from 12.8% on April 2 to 4.1%. The Nasdaq is up 8.3%; it had been up as much as 19.8% on April 2.
Crude oil slumps, but gold slips
Crude oil in New York fell 82 cents to $8.35. Brent crude was off $1.22 to $102.25 a barrel. Brent, the benchmark North Sea crude, had been fallen to $101.27 before moving up again.
The national average price of gasoline was at $3.62 a gallon, down from $3.626 a gallon on Wednesday, according to AAA's Daily Fuel Gauge Report. The price has fallen 8% since peaking in early April.
Gold was off $1.30 at $1,564.40 an ounce. But the metal ended May with a 6% loss and is off 0.2% for the year. Silver (-SI) settled down 22.6 cents to $27.76 an ounce. Silver ended down 10.5% for the month. Copper was down 2.45 cents to $3.3655 a pound and was off 12% for the month.
One reason gold is not higher is that the euro (EURUSD) was lower against the U.S. dollar for much of the day. But, thanks to the IMF report, the currency was at $1.23747, up from Wednesday's $1.23716. Today's low was $1.23442.
Interest rates were lower, with the 10-year Treasury yield falling to 1.586% from Wednesday's 1.625%.
The not-so-hot economic data
The market took its cue from four reports today. All were disappointing, though not awful.
The Institute for Supply Management-Chicago said today its barometer decreased to 52.7, the lowest since September 2009, from 56.2 in April. Readings greater than 50 signal growth. Economists had expected the report to rise to around 57. Production and new orders fell to their lowest levels since September 2009. Prices paid were the lowest since September 2010. Employment growth slowed.
Gross domestic product climbed at a 1.9% annual rate from January through March, down from a 2.2% prior estimate, the Commerce Department said. The report also showed corporate profits rose at the slowest pace in more than three years and smaller wage gains at the end of 2011.
First-time applications for unemployment insurance payments increased by 10,000 to 383,000 in the week ended May 26 from a revised 373,000 the prior week, the Labor Department reported. They exceeded the median estimate of 370,000.
Private-sector employers added 133,000 jobs in May, according to the ADP National Employment Report. Economists had expected a gain of 150,000. April's gain was revised to 113,000 from an original estimate of 119,000.
Wal-Mart is the Dow's winner today and for May
Only nine of the 30 Dow stocks were higher, led by Wal-Mart Stores (WMT), up $1.07 to $66.51. Wal-Mart is the Dow's best performer in May, up 12.9%. It hit a 52-week high of $66.53. The laggard was Caterpillar (CAT), off $3.55 to $86.63.
Only 120 S&P 500 stocks were higher, led by Frontier Communications (FTR), a Seattle-based telecommunications company, and pharmaceutical-maker Forest Laboratories (FRX). The laggards were First Solar (FSLR) and Cliffs Natural Resources (CLF), which was downgraded because of low iron-ore prices.
Twelve Nasdaq-100 stocks were higher, led by Oracle (ORCL) and Expedia (EXPE).
European Stocks Trim Monthly Loss; U.S. Treasury Yields I - Bloomberg
U.S. stocks reversed losses, while Treasuries trimmed gains, as a Greek poll showed support for pro-bailout politicians and a report said the International Monetary Fund is discussing contingency plans to aid Spain. The euro rebounded from a two-year low and oil trimmed its drop.
The Standard & Poor’s 500 Index was down less than 0.2 percent at 1,310.68 at 2:16 p.m. in New York, erasing most of an earlier 1.1 percent drop. The index is down 6.2 percent in May, poised for its worst month since September. Ten-year note yields fell four basis points to 1.59 percent after sinking to a record low of 1.53 percent. The euro erased a 0.2 percent earlier drop to trade little changed versus the dollar. Crude oil slipped 1.2 percent to $86.77 a barrel after tumbling 2.2 percent.
Treasuries rallied this month while world stock markets lost more than $4 trillion amid concern Greece will exit the euro and Spain’s finances will deteriorate further, while U.S. economic data trailed forecasts. Early losses in stocks this morning were triggered when first-time claims for U.S. jobless benefits unexpectedly increased and a separate report showed the American economy grew at a 1.9 percent annual rate in the first quarter, down from a 2.2 percent prior estimate.
A Greek opinion poll before June 17 elections showed New Democracy, the largest pro-bailout party, leading Syriza, which calls for the cancellation of the country’s bailout terms. Of 1,128 people surveyed by Marc SA for Athens-based Alpha TV, 26 percent said they’d vote for New Democracy, 24.3 percent for Syriza and 12.5 percent for the Pasok party, which also supports the bailout program.
Spain Report
The Wall Street Journal reported on its website that the European department of the IMF has started discussing contingency plans for a rescue loan to Spain in the event that the country can’t find enough money to bail out the Bankia group.
The IMF is not preparing financial aid for Spain, nor has the country asked for a loan, a spokesman for the fund said.
“There’s been no request for financial assistance from Spain and the IMF is not making plans for financial assistance to Spain,” Gerry Rice, the IMF’s director of external relations, told reporters in Washington today.
Initial jobless claims grew by 10,000 to 383,000 last week, topping the median estimate of 370,000 in a Bloomberg survey of economists. Companies added 133,000 workers in May, according to figures from ADP Employer Services, trailing the median economist forecast for a 150,000 advance, the same as estimated for tomorrow’s monthly government jobs report.
The Institute for Supply Management-Chicago Inc. said today its barometer decreased to 52.7, the lowest since September 2009, and below the median economist estimate of 56.8.
Treasury Yields
Seven-year note yields pared losses after sliding to a record for a second day, trading at 1.04 percent after dropping below 1 percent earlier. The rate on 30-year bonds fell as low as 2.58 percent, the lowest since December 2008.
The S&P 500 slid 1.4 percent yesterday after a measure of pending home resales in April unexpectedly dropped and concern grew that the euro-area debt crisis is deepening.
The S&P 500 may rebound almost 3 percent in June based on the average size of moves following past May declines of 4 percent or more, Bespoke Investment Group said.
The benchmark gauge has fallen 4 percent or more in May on 15 occasions since 1928, followed by an average June increase of 2.8 percent, according to data compiled by Bespoke. The index rose in June 60 percent of the time following such moves, the data show.
European Stocks
The Stoxx Europe 600 Index retreated 0.4 percent today to extend its May drop to 6.8 percent, the biggest monthly decline since August. ABB Ltd. fell 2.9 percent after the head of the company’s low-voltage subsidiary said demand from China and Italy was lackluster. Holcim Ltd. tracked European construction stocks lower on concern that China’s economy is slowing. Logica Plc surged 69 percent after CGI Group Inc. agreed to buy the computer-services provider for 1.7 billion pounds ($2.6 billion).
Ireland is voting on the EU’s latest treaty, with polls indicating they will endorse measures designed to ease the euro region’s debt crisis. Surveys suggest that supporters of the Fiscal Stability Treaty lead by about 18 percentage points even as doubts grow about the viability of the currency union.
The yield on the German 10-year bund decreased seven basis points to a record 1.20 percent, with the two-year rate holding near zero. Greek’s 10-year yield jumped 70 basis points to 30.83 percent, rising for the third straight day. Spain’s 10-year yield decreased 10 basis points to 6.56 percent after yesterday reaching a record high above benchmark German bunds.
Asian Stocks
The MSCI Asia-Pacific Index slid 0.3 percent today and fell 10 percent in May, its biggest monthly loss since October 2008. The Nikkei 225 Stock Average (NKY) dropped 1.1 percent as Japan’s factory output gained 0.2 percent in April from the previous month, missing the median estimate of 26 economists surveyed by Bloomberg for a 0.5 percent increase.
The MSCI Emerging Markets Index slipped 0.2 percent today and has slumped 12 percent this month, its worst May performance since a 14 percent slide in May 1998.
The BSE India Sensitive Index declined 0.6 percent after government data showed the economy grew 6.5 percent in the year ended March 31, less than the 6.7 percent projection in a Bloomberg survey. The Shanghai Composite Index fell 0.5 percent. Indonesia’s Jakarta Composite index tumbled 2.2 percent, the most among Asian benchmark indexes. The BUX Index surged 2.2 percent in Budapest.
To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net; Susanne Walker in New York at swalker33@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
U.S. Stocks Erase Drop
Scott Eells/Bloomberg
Traders work at the New York Stock Exchange (NYSE) in New York.
Traders work at the New York Stock Exchange (NYSE) in New York. Photographer: Scott Eells/Bloomberg
May 31 (Bloomberg) -- Joseph Balestrino, fixed-income strategist at Federated Investors, talks about U.S. Treasuries. Balestrino speaks with Erik Schatzker, Scarlet Fu and Stephanie Ruhle on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
May 31 (Bloomberg) -- William Rhodes, president and chief executive officer of William R. Rhodes Global Advisors LLC, talks about the European sovereign-debt crisis, prospects for a fiscal union and austerity programs in Greece, Ireland and Portugal. He speaks with Guy Johnson and Caroline Hyde on Bloomberg Television's "The Pulse." (Source: Bloomberg)
May 31 (Bloomberg) -- Richard Yetsenga, head of global markets research at Australia & New Zealand Banking Group Ltd., talks about the outlook for global currency markets and his trading strategy. Yetsenga speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
May 31 (Bloomberg) -- David Steck, global head of foreign exchange sales at Nomura Securities International Inc., talks about the outlook for global currencies. He speaks with Sara Eisen and Stephanie Ruhle on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
STOCKS NEWS EUROPE-Bounce back hopes boost Kingfisher post Q1 - Reuters UK
Shares in Kingfisher rise 2.4 percent, second-top gainers on a rallying FTSE 100, with investors backing the company to bounce back despite the gloomy economic environment, as Europe's biggest home improvements retailer posts a steep fall in first-quarter profits.
Against tough comparatives, the firm, which runs the market-leading B&Q chain in Britain as well as Castorama and Brico Depot in France and elsewhere, saw its retail profit fall 8.6 percent to 160 million pounds ($248.5 million) in the three months to April 30, at the bottom end of analyst forecasts.
Seymour Pierce says in a note it has confidence in the management despite uncertainty over the outlook in Kingfisher's two core markets, question marks over its Chinese operation and the lacklustre objective of improving operating profitability by only 300 million pounds over the next five years.
"Earnings will also benefit from significant growth in direct sourcing over the next three years ... and the development of common ranges to all stores and the further expansion of own label," the broker says, adding the stock is fairly rated at 11.2 times 2013 earnings estimates.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, says: "The company's track record of delivering superior returns in tougher times should see it through as the year progresses."
That view is reflected in the performance of Kingfisher's shares, which are up 10.2 percent over the last 12 months and among the top 20 performers on London's blue chip index in the period, comparing with a 5 percent drop on the FTSE 100.
To see a statement, please click
Reuters messaging rm://david.brett.thomsonreuters.com@reuters.net
Money from mobile remains elusive - AZCentral.com
SAN FRANCISCO - Mobile ads are the Holy Grail of revenue for anyone with a social-media plan.
The market for the ads that dot smartphone and tablet screens is expected to soar to $10.8 billion in U.S. sales by 2016, from $2.6 billion expected this year, according to research firm eMarketer. That's a tiny slice of the $169.5 billion market for media ad spending in the U.S.
Yet mobile ads are crucial to the growth of many companies, including newly public Facebook, though few businesses have been able to capitalize on the promise.
Some speculate that the popularity of such devices, in part, comes from their lack of ads. Others think the larger screen expected on Apple's forthcoming iPhone is a concession to demands for extra space to accommodate content and ads.
"It underscores the importance of real estate on (mobile) screens," says John Faith, senior vice president of mobile at Whale Shark Media, a leader in online coupons and deals.
Mobile Web traffic is up 35 percent in less than a year, while all Web-browser use on Windows-based PCs declined 10 percent in a six-month period from 2011 to 2012, says market researcher Chitika Insights. About 20 percent of traffic comes from tablets and smartphones, it says. Retailers such as Target, Best Buy and Macy's have noticed, and are charging into mobile ads, which will become staples as millions ditch PCs for smartphones and tablets, ad experts say.
"Everyone 'gets' the implicit contract that free content comes with ads," says Raghu Kakarala, senior vice president of technology at Engauge, which has helped create mobile app features for Coca-Cola's MyCokeRewards and Chick-fil-A.
Sites such as Forbes have "optimized the mobile experience" with clean ads at the top or bottom of the screen, with content in middle.
Google has the early lead in the U.S. in monetizing mobile, with 51 percent of the market, largely due to its success with mobile search ads, says Noah Elkin, an eMarketer analyst. Phone numbers embedded in mobile ads on Google's click-to-call feature, for example, generate about 15 million calls per month.
Facebook barely registers yet, though the company has the potential to rake in $2.54 billion from mobile advertising, according to Chitika. Facebook Sponsored Stories -- an ad that appears on a member's Facebook page, and generally consists of a friend's name, profile picture and an advertiser the person "likes" -- now appears in a user's mobile news feed.
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