Introducing FUGLY

It has been a while since we have seen FUGLY….

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Apple Inc. (NASDAQ: AAPL) Cut to Neutral at BTIG.

The Charles Schwab Corporation (NYSE: SCHW) Started as Neutral at Goldman Sachs.

Eaton Corporation (NYSE: ETN) named the value stock of the day at Zacks.

E*TRADE Financial Corporation (NASDAQ: ETFC) Started as Neutral at Goldman Sachs.

F5 Networks, Inc. (NASDAQ: FFIV) Cut to Hold at Stifel Nicolaus.

Huntington Bancshares Incorporated (NASDAQ: HBAN) Reiterated Neutral at Zacks.

LinkedIn Corporation (NYSE: LNKD) Started as Hold at Needham.

Mead Johnson Nutrition Company (NYSE: MJN) Reiterated Outperform with $82 target at Credit Suisse.

Pier 1 Imports Inc. (NYSE: PIR) Maintained Hold but raised estimates at Argus.

Randgold Resources Limited (NASDAQ: GOLD) Raised to Buy at Stifel Nicolaus.

SBA Communications Corporation (NASDAQ: SBAC) Raised to Buy at Citigroup.

TD Ameritrade Holding Corporation (NASDAQ: AMTD) Started as Neutral at Goldman Sachs.

Tyco International Ltd. (NYSE: TYC) Raised to Buy at Argus.

Walt Disney Co. (NYSE: DIS) Cut to Neutral at Citigroup.

Credit Suisse has previewed top banks and noted on Bank of America Corporation (NYSE: BAC), Citigroup Inc. (NYSE: C), and J.P. Morgan Chase & Co. (NYSE: JPM): “We look BAC, C and JPM to benefit from improved trading in 1Q.” The firm talked up loan growth and demand and sees attractive valuations with improved profitability and greater capital deployment.”

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“Arch Coal Inc. (ACI) , Alpha Natural Resources Inc. (ANR) : The two coal companies may be oversold as the warm winter cut demand for electricity and lowered prices of the commodity, Barron’s reported in its “The Trader” column, citing David Steinberg of DLS Capital Management.

AZZ Inc. (AZZ) : The maker of electrical components reported fourth-quarter revenue was $123.6 million, beating the average analyst estimate of $122.7 million.

Eli Lilly & Co. (LLY) : The Food and Drug Administration cleared the Indianapolis-based pharmaceutical firm’s Amyvid product for patients being evaluated for Alzheimer’s Disease, after delaying approval last year. Amyvid is a radioactive diagnostic agent used to detect the illness. Eli Lilly purchased the product’s developer for $300 million in December 2010.

Icahn Enterprises LP (IEP) : The firm, 93.6 percent owned by Carl Icahn, looks attractive for those who want to participate in the billionaire investor’s takeover success over the long term, Barron’s reported, without citing anyone.

Joy Global Inc. (JOY) : The Milwaukee-based maker of mining equipment looks cheap after shares were sold off on concern that the global economy is slowing down, cutting demand for mining, Barron’s said in its “The Trader” column, without citing anyone.

Legg Mason Inc. (LM) : The Baltimore-based fund manager is poised to benefit if interest rates rise and help improve performance of the firm’s money market portfolios, Barron’s reported.

Office Depot Inc. (ODP) : The second-largest U.S. office- supply chain recalled 307,000 desk chairs in the U.S. and 12,000 in Canada after receiving 11 reports of chairs breaking, resulting in reports of injuries.

WD-40 Co. (WDFC) : The maker of lubricants and hand soap in San Diego forecast earnings in 2012 of as much as $2.45 a share, higher than a previous prediction of no more than $2.40 and exceeding the average analyst estimate of $2.30.”

In Play

On the Wires 

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“Corporate earnings have surged recently, helping to push the Standard & Poor’s 500 Index up 30 percent from its October lows.

But stock analysts predict that earnings growth is about to plummet.

The Standard & Poor’s Capital IQ survey projects that profits increased 0.93 percent in the first quarter from a year earlier, The New York Times reports. That’s a 95 percent plunge from the 19.68 percent growth rate seen in the first quarter of 2011.

“It is the lowest quarter of growth we have seen since the third quarter of 2009,” Christine Short, senior manager for S&P Global Markets Intelligence, tells The Times.

Surveys from Thomson Reuters and FactSet show similar results.

So why is profit growth collapsing? First, companies have run out of ways to profit from cutbacks. Second, the impact of Europe’s debt crisis continues. And third, so does the impact of slowing global economic growth.

The effect on stocks may not be pretty. Barclays Capital expects the S&P 500 to fall a bit less than 10 percent if companies’ profit guidance doesn’t meet analysts’ expectations.

Another factor that could weigh on stocks is worry about the U.S. economy following Friday’s news that payrolls gained only 120,000 in March.

“What it calls into question and what the debate will be about is, once again, what is the pace of the recovery?” Mark Freeman, chief investment officer at Westwood Holdings Group, tells Bloomberg.”

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“The average price for regular gasoline at U.S. filling stations increased 3.74 cents over the past two weeks and may have peaked, according to Trilby Lundberg, the president of Lundberg Survey Inc.

The price jump to $3.9671 a gallon covers the period ended April 6 and is based on the Camarillo, California-based company’s survey of about 2,500 stations.

“Price hikes at the pump have been losing steam for weeks,” Lundberg said yesterday in a telephone interview. “Crude oil prices have slipped and if they don’t rebound in the very near future, gasoline prices will peak very soon, if they haven’t already.”

The highest price in the lower 48 U.S. states among the cities surveyed was in Chicago, where the average was $4.45 a gallon, Lundberg said. The lowest price was in Tulsa, Oklahoma, where customers paid an average of $3.66.

On Long Island, regular gasoline was $4.14 a gallon, while Los Angeles-area retail stations averaged $4.27, according to Lundberg.

“The price spikes had been led by places like Chicago and Los Angeles,” Lundberg said. “Now, we see some of these prices tumbling.”

Gasoline on the New York Mercantile Exchange fell 1.3 percent to $3.3405 a gallon in the two weeks ended April 5.

Crude Prices

“Compared to the magnitude of recent price spikes, this is small,” Lundberg said. The increase was the smallest rise for the motor fuel since the two weeks between Jan. 6 and Jan. 20, according to Lundberg Survey. A decline in U.S. oil prices over the past two weeks has helped, she said.

The front-month crude contract on the Nymex fell $3.56 to $103.31 a barrel during that period, while Brent oil in London declined $1.70 to $123.43. Nymex trading was closed April 6 for the Good Friday holiday.

Gasoline futures on the New York Mercantile Exchange have climbed 24 percent this year, the best performance in the Standard & Poor’s GSCI index of 24 commodities.

Prices had surged on speculation that refinery closings would tighten supplies and as crude rose on concern that tensions with Iran over its nuclear program would reduce oil supplies. New York-traded West Texas Intermediate crude is up 4.5 percent in 2012, and Brent oil on the ICE Futures Europe exchange has gained 15 percent.

Summer Driving Season…”

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“Aleris Corporation (ARS), a global manufacturer of aluminum products and specification alloys, plans to raise $500 million by offering 31.3 million shares at a price range of $15.00 to $17.00. At the midpoint of the proposed range, Aleris Corporation would command a market value of $1.87 billion. Aleris Corporation, which was founded in 2004, booked $4.83 billion in sales over the last 12 months. The Beachwood, OH-based company plans to list on the NYSE under the symbol ARS. J.P. Morgan, Barclays Capital, Deutsche Bank Securities and BofA Merrill Lynch are the joint bookrunners on the deal.

BrightSource Energy (BRSE), which develops utility-scale solar thermal power plants, plans to raise $152 million by offering 6.9 million shares at a price range of $21.00 to $23.00. At the midpoint of the proposed range, BrightSource Energy would command a market value of $1.04 billion. BrightSource Energy, which was founded in 2004, booked $159 million in sales over the last 12 months. The Oakland, CA-based company plans to list on the NASDAQ under the symbol BRSE. Goldman, Sachs & Co., Citi and Deutsche Bank Securities are the joint bookrunners on the deal.

Enerkem (NRKM), which has developed a process that converts municipal waste into cellulosic ethanol, plans to raise $131 million by offering 7.3 million shares at a price range of $17.00 to $19.00. At the midpoint of the proposed range, Enerkem would command a market value of $534 million. Enerkem, which was founded in 2000, booked $3 million in sales over the last 12 months. The Montreal ,Canada-based company plans to list on the NASDAQ under the symbol NRKM. Goldman, Sachs & Co., Credit Suisse and BMO Capital Markets are the joint bookrunners on the deal.

Erickson Air-Crane (EAC), which provides aerial firefighting and timber harvesting service on heavy-lift helicopters, plans to raise $41 million by offering 4.8 million shares at a price range of $8.00 to $9.00. At the midpoint of the proposed range, Erickson Air-Crane would command a market value of $84 million. Erickson Air-Crane, which was founded in 1971, booked $153 million in sales over the last 12 months. The Portland, OR-based company plans to list on the NASDAQ under the symbol EAC. Stifel Nicolaus Weisel, Oppenheimer & Co. and Lazard Capital Markets are the joint bookrunners on the deal.

Forum Energy Technologies (FET), a global products and services provider for the oil and natural gas industries, plans to raise $300 million by offering 15.8 million shares at a price range of $18.00 to $20.00. At the midpoint of the proposed range, Forum Energy Technologies would command a market value of $1.76 billion. Forum Energy Technologies, which was founded in 1985, booked $1.13 billion in sales over the last 12 months. The Houston, TX-based company plans to list on the NYSE under the symbol FET. J.P. Morgan, BofA Merrill Lynch, Credit Suisse and Citi are the joint bookrunners on the deal.

MRC Global (MRC), a largest global pipes, valves and fitting (PVF) and services supplier to the energy industry, plans to raise $500 million by offering 22.7 million shares at a price range of $21.00 to $23.00. At the midpoint of the proposed range, MRC Global would command a market value of $2.25 billion. MRC Global, which was founded in 1921, booked $4.83 billion in sales over the last 12 months. The Houston, TX-based company plans to list on the NYSE under the symbol MRC. Goldman, Sachs & Co. and Barclays Capital are the joint bookrunners on the deal.

Oaktree Capital Group (OAK), a alternative asset manager with a focus on credit and $75 billion in AUM, plans to raise $501 million by offering 11.3 million shares at a price range of $43.00 to $46.00. At the midpoint of the proposed range, Oaktree Capital Group would command a market value of $6.71 billion. Oaktree Capital Group, which was founded in 1995, booked $1.36 billion in sales over the last 12 months. The Los Angeles, CA-based company plans to list on the NYSE under the symbol OAK. Goldman, Sachs & Co. and Morgan Stanley are the joint bookrunners on the deal.

Renaissance Capital will have Pre-IPO Research available on each of these upcoming IPOs prior to its pricing.

Last week, there were 1 IPO pricings. Retail Properties of America (RPAI), a third largest shopping center REIT in the US with 259 retail properties, was the week’s winner, ending up 9% from its IPO price.”

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“The U.S. and its European allies will press Iran for tangible action to curb its nuclear program when talks restart later this week after a 15-month hiatus.

Nuclear negotiations between Iran and the five permanent United Nations Security Council members plus Germany will take place starting April 14 in Istanbul, European Union spokesman Michael Mann said yesterday. In Washington, State Department spokeswoman Laura Seal confirmed the plans.

“We have agreed to launch talks in Istanbul on April 14,” Mann said. “We hope that this first round will produce a conducive environment for concrete progress. We are of course aiming at a sustained process.”

The U.S. and its allies are seeking to avoid a repeat of the previous meeting in January 2011, also in Istanbul, when talks broke down after Iran demanded a lifting of UN sanctions as a condition for discussing the nuclear program. Iran is under increasing economic pressure from trade, financial and energy sanctions, including U.S. and EU measures to cut oil purchases from Iran.

In a joint statement March 8, the U.S. and its five partners in the talks — China, France, Germany, Russia and the U.K. — said they wanted sustained discussions with Iran and for the Persian Gulf nation to allow UN inspectors into its secret Parchin military installation.

Israeli Defense Minister Ehud Barak said the six powers should demand that Iran stop enriching uranium to 20 percent and give up any material already processed to that level. Iran also must shut down the Fordo underground enrichment facility near Qom, Barak said in an interview broadcast yesterday on CNN’s “Fareed Zakaria GPS” program….”

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“EL-ARISH, Egypt (AP) — Militants on Monday blew up a gas pipeline in Egypt’s Sinai Peninsula that transports fuel to neighboring Israel and Jordan, a senior Egyptian security official said.

The attack was the 14th on the pipeline since last year’s popular uprising that ousted Egypt’s longtime leader Hosni Mubarak. Previous bombings of the pipeline have been blamed on Islamist militants who have stepped up their activity in Sinai, taking advantage of a security vacuum caused by a thin police presence in the post-Mubarak era.

Northern Sinai security chief Maj. Gen. Saleh al-Masri said Monday’s blast hit a section of the pipeline outside the city of el-Arish but did not cause major damage or a fire since the gas flow had been cut following a blast on the pipeline last month.

Al-Masri said the Interior Ministry would send an armored police brigade to guard the area and maintain security because the current number of policemen is not enough to control the vast desert region.

But he said additional army units would still be needed, but because of Egypt’s 1979 peace treaty with Israel, reinforcements can only be deployed with Israel’s agreement.

The number of Egyptian forces in demilitarized Sinai is regulated by the 1979 accord, which prohibits the deployment of military forces in the section of Sinai bordering Israel, leaving security in that area in the hands of lightly armed police and border guards.

But in August, Egypt — acting with Israeli approval — deployed 2,000 more soldiers and police in the area following a spike in violence.”

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“In his latest note, BTIG’s Dan Greenhaus declares: “Risk off indicators are mounting.”

He argues that there are reasons to be “skeptical” about markets are current levels.

Some specific points:

• Overseas markets are breaking down.
• Germany and France are now down three of the last four weeks.
• The aussie dollar, a great barometer of economic health is sliding.
• The US data is weakening, though is not definitive.

Says Greenhaus: Key levels to watch are 1370 and 1311 on the S&P”

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“Marc Faber publisher of the Gloom Boom & Doom Report, thinks they’ll go down a lot more before they start heading up again.

In an interview with CNBC this past weekend, Faber said that last Friday’s disappointing jobs report only affirms his opinion that the U.S. economy remains anemic.

And he thinks stocks are headed for a correction or even a bear market, which translates to a sell-off of at least 10 to 20 percent.

From CNBC:

“The technical underpinnings of the market have been a disaster in the last couple of weeks,” Faber said on the sidelines of the Maybank Invest Asia conference. “The number of new highs have declined, the volume has been poor, insider sales just hit a record.”
…
“I still feel we are in a correction period and again like in equities, it’s a correction that is somewhat more serious.”

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“AOL Inc. (AOL) said it agreed to sell more than 800 of its patents and related patent applications to Microsoft Corp. (MSFT) and grant the software maker a non-exclusive license to its retained patent portfolio for about $1.056 billion in cash.”

“Hedge funds reduced bullish bets on commodities for a second consecutive week as theFederal Reserve signaled it may refrain from more monetary stimulus, increasing concern that growth will slow and curb demand for raw materials.

Money managers lowered net-long positions across 18 U.S. futures and options by 2.8 percent to 1.1 million contracts in the week ended April 3, data from the Commodity Futures Trading Commission show. Bets on higher corn prices fell to the lowest since February, while those on hogs dropped by the most since May. Speculators cut wagers on costlier crude oil for a third week, and are now the least bullish in two months.

Minutes from the March 13 Fed policy meeting released April 3 showed policy makers will probably hold off on increasing monetary accommodation unless the U.S. economic expansion falters. The Standard & Poor’s GSCI gauge of 24 commodities rose more than 80 percent from December 2008 to June 2011 as the central bank set rates at a record low and bought $2.3 trillion of debt in two rounds of quantitative easing. The U.S. economy will accelerate this quarter and the next, economist estimates compiled by Bloomberg show.

“The market is addicted to stimulus,” said Jeffrey Sica, the Morristown, New Jersey-based president of SICA Wealth Management who helps oversee $1 billion of assets. “This market has risen because of the liquidity push and the market will decline when it’s deprived of liquidity.”

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“Oil fell for the third time in four days after Iran agreed to resume talks on its nuclear program and economic reports in the U.S. and China raised concern about fuel demand.

Futures slid as much as 1.4 percent as trading resumed after the Easter holiday weekend. International negotiations with Iran’s government are scheduled to start this week over its nuclear program. China said inflation in March accelerated more than forecast, reducing the Chinese government’s leeway to boost the economy. The U.S. created 120,000 jobs in March, fewer than forecast and the smallest increase in five months, an April 6 report showed.

The American payroll data “raises the old question mark about the speed of the U.S. recovery,” and whether it will depress oil demand, Olivier Jakob, managing director of Switzerland-based consultant Petromatrix GmbH, said by telephone today.

Oil for May delivery declined as much as $1.44 to $101.87 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.13 at 9:10 a.m. London time. The contract gained 1.8 percent to $103.31 on April 5, the latest settlement. Prices have gained 3.3 percent this year.

Brent crude for May settlement slid 89 cents to $122.54 a barrel on the London-based ICE Futures Europe exchange. The premium of the European benchmark to New York futures was at $20.41. Markets were closed in New York and London on April 6 for public holidays…”

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“Russia’s central bank refrained from cutting interest rates for a fourth month after signaling that “medium-term” inflation risks are increasing.

Bank Rossii left the refinancing rate at 8 percent, as predicted by 21 of 22 economists in a Bloomberg News survey. The overnight auction-based repurchase rate was kept at 5.25 percent and the overnight deposit rate will remain at 4 percent.

The world’s largest energy exporter is keeping borrowing costs unchanged even after the inflation rate fell to the lowest in two decades. Current market interest rates are “acceptable for the coming months,” Bank Rossii said. China may ease policy to boost faltering growth andBrazil has cut its benchmark rate five times since August.

“Medium-term inflation risks are rising because of uncertainty over the impact on consumer prices of the planned increase in most of the regulated prices and tariffs in July,” the central bank said in the statement.

Consumer prices rose 3.7 percent from year earlier in March and core inflation, which excludes volatile costs such as energy, decelerated to 5.5 percent, the regulator said today.

Russia’s benchmark 30-stock Micex Index reversed gains, dropping 0.4 percent to 1,491.45 in Moscow after the announcement. The gauge had risen as much as 0.6 percent before the decision. The ruble remained little changed at 29.63 against the dollar and was steady at 38.7080 versus the euro….”

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“Royal Bank of Canada has chosen to challenge the Commodity Futures Trading Commission in court instead of settling over allegations it engaged in illegal futures trades because it said it didn’t break any rules.

“It was a conscious decision to defend ourselves vigorously and we made that decision because we believe we didn’t do anything wrong,” said Arthur Hahn, a Chicago-based lawyer defending Canada’s biggest bank.

Royal Bank is being sued by the regulator over claims it engaged in illegal futures trades worth hundreds of millions of dollars to garner tax benefits tied to equities. The Toronto- based lender made false and misleading statements about “wash trades” from 2007 to 2010 in which affiliates traded among themselves in a way that undermined competition and price discovery on the OneChicago LLC exchange, the CFTC said in a complaint filed April 2 in Manhattan federal court.

“All of the transactions in question here were within standard rules and the guidances put out by the commission,” Hahn said in an interview. “We don’t think we did anything wrong, it’s that simple.”

Royal Bank enlisted affiliates to help carry out hundreds of futures transactions done off-exchange and then reported to OneChicago as block trades between independent affiliates, according to the CFTC.

“These were legitimate block trades, these were legitimate trades between affiliates,” said Hahn, a partner with Katten Muchin Rosenman LLP (1161L)…”

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“China’s inflation accelerated more than forecast in March on a pickup in food prices, signaling that policy makers may exercise caution in adding stimulus to boost growth.

Consumer prices rose 3.6 percent from a year earlier, the National Bureau of Statistics said today. That was more than the median 3.4 percent estimate in a Bloomberg News survey of 33 economists. Food-related costs gained 7.5 percent.

Premier Wen Jiabao’s officials may need to remain alert to the risk of inflation bouncing back even after price increases stayed below the government’s 4 percent target for a second month.China’s economy may have expanded last quarter at the slowest pace in almost three years, showing the limits of the nation’s contribution to global growth as U.S. job growth weakens and concern mounts about Europe’s sovereign-debt crisis.

“The upside surprise in today’s CPI reading is likely to raise concerns about a possible rebound in inflationary pressures among policy makers,” said Song Yu, a Beijing-based economist with Goldman Sachs Group Inc. “The data could limit the magnitude of the policy loosening that likely started in March,” Song said, citing Goldman’s observations on the increasing supply of loans and news reports on the government easing restrictions on banks’ lending capacity…”

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“The yen rose against all of its major peers as data showing Japan returned to a current-account surplus and tensions over a North Korean rocket launch bolstered the allure of the currency as an investment haven.

The euro touched a one-month low versus the Japanese currency before a German report that may show exports declined in February. The dollar weakened against the yen before data this week that may show inflation in the U.S. eased. The Swiss franc strengthened above the 1.20 ceiling against the euro imposed by the nation’s central bank, spurring speculation the country will intervene to weaken the currency….”

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