The Dow Jones industrial average broke the 15,000 milestone today. This is the first time in history the Dow has closed over 15,000. The official closing amount was 15,056.20. The Dow was up over 87 points on the day. CNBC says the milestone means gains could keep coming in the days ahead.
Jason Weisberg, Seaport Securities, also believes the marker is a sign the markets will go higher and that this is a real rally. Take a look:
Warren Buffett has joined Twitter. His verified account is @WarrenBuffett. His first tweet was, "Warren is in the house." Buffett then linked an essay of his on CNN/Money about why women are the key to America's prosperity.
Buffett has quickly garnered over 200,000 followers and probably will add hundreds of thousands more in the coming days.
Yum Brands Reports Q1 2013 EPS Down 8%, Warns of Bird Flu Outbreak
Yum Brands, which owns fast food chains including KFC, Pizza Hut and Taco Bell, recently reported its results for its first quarter ending March 23, 2013. Reported EPS was $0.72 for the quarter. This was down 24% from the $0.96 EPS recorded in Q1 2012.
Yum Brands says a poultry supply situation in late December 2013 had a big impact on its China division sales. Same-store sales were down 20% in China. However, same-store sales grew !% at Yum! Restaurants International (YRI) and 2% in the U.S.
Motley Foolsays Yum! shares look delicious. With the H7N9 avian flu outbreak in China the company may continue to struggle there, but should recover if the outbreak ebbs. CBS Money Watchreports that Yum is warning about the bird flu outbreak and its potential to curb sales. The outbreak has killed 22 so far. The sale figures do look good outside of China for Yum!.
Yum Brand's 2012 annual report can be found here (PDF).
This past week was an unusual one for the stock market. Stocks climbed overall while Apple shares fell. It was like opposite week. Apple's shares have now lost nearly 40% of their value since peaking at $702 on September 19, 2012.
Apple's revenues have continued to climb, but concerns about the future of Apple are growing. Apple often soars from new products and innovation. The iPad and iPhone are already no longer brand new in our tech-focused culture that is constantly craving something new. The loss of Steve Jobs is a concern. There is also concern that the Android platform could give Apple headaches in smartphones in the same way the PC gave Apple headaches in the late 80s and 90s. Apple also appears to have poured cold water on rumors it might offer a cheaper phone to increase its smartphone marketshare. This is all weighing down Apple's stock. It may require another innovative gadget for the company to soar to new heights once again. Take a look:
Apple Shares Plunge Over 10% in After Hours Trading
Apple (AAPL) shares have plunged over 10% in after hours trading. Reuters reports that iPhone sales came in below expectations. Analysts expected 50 million iPhone sales for the quarter (Apple's fiscal first quarter) and the company sold 47.8 million. Revenues came in at $54.5 billion, which is huge, but under analysts averaged expectations of $54.73 billion.
Barron's reports that shares of Apple were halted temporarily, but trading is currently underway in the after hours session.
Apple also moved 22.9 million iPads in its fiscal first quarter. It is not clear how many of them were the new iPad mini.
Apple Shares Hit 11-Month Low Following Report Linking Cut in Production to Weaker iPhone 5 Demand
Apple shares hit an 11 month low today. The stock [AAPL] fell $18.55 (3.57%) to close at $501.75. Apple has lost nearly 200 points since mid-September. Bloomberg is reporting that the drop comes after the Nikkei newswire reported Apple cut its production due to weak iPhone 5 demand. Apple reportedly cut production by nearly 30% last month.
CNET reports that JP Morgan analyst Mark Moskowitz is calling the new reports old news. However, even the Wall Street Journal is saying the cuts were due to weaker demand for the iPhone 5. Take a look:
NYSE to Remain Open for Trading Electronically During Hurricane Sandy
NYSE Euronext has announced that it will suspend physical trading floor operations and close its building due to Hurricane Sandy. However, it will invoke its contingency plans to trade all NYSE-listed securities on NYSE Arca, its electronic exchange, beginning Monday, Oct. 29, 2012.
Duncan L. Niederauer, CEO NYSE Euronext, said in a statement, "We are open for business and at the same time acting in accordance with actions taken by the city and state of New York. We have been in discussions with government officials and regulators, our trading floor community, issuers and other customers. We will continue to communicate and coordinate activities with regulators and government officials, other market centers, member firms and all of our customers. I would like to acknowledge everyone's outstanding cooperation and singular focus on serving the best interests of people, safety and our capital markets. This is an extremely dangerous and unpredictable weather event, and we support the actions taken by city and state officials. On behalf of everyone at NYSE Euronext, our thoughts and prayers go to everyone impacted by the storm."
CNN notes that the exchange also closed in 1985 for Hurricane Gloria and closed early due to a snowstorm in 1965. Some companies with headquarters in the lower Manhattan flood zone, such as AMEX, will be closed on Monday.
Psy's Gangnam Style Video Makes $15 Million in Three Months
Rocketboom reports that Psy has made $15 million from its "Gangnam Style" music video in the last three months. The video is the most liked video of all-time and has the possibility of becoming the most watched YouTube video of all-time. Rocketboom says the $15 million in revenues have come from a variety of sources, including tv commercials, tv appearances and concert sales. $1 million comes directly from Google AdSense, which powers the ads that appear on the music video. It pays to have a massive worldwide hit single. Take a look:
Apple's stock has closed above $700 for the first time. AAPL closed at $701.91. A driving factor in the increase in share price was Apple's announcement that it sold over two million units of the iPhone 5 through pre-orders in just 24 hours. S&P Capital IQ has a target price of $800 for Apple. Take a look:
Carlyle Group to Buy DuPont Auto Paint Business for $4.9 Billion
The Carlyle Group and DuPont have announced a definitive agreement whereby Carlyle will purchase DuPont Performance Coatings (DPC) for $4.9 billion in cash. The transaction is expected to close in the first quarter 2013, subject to customary closing conditions and regulatory approvals. DPC has expected sales in 2012 of over $4 billion
DuPont Chair and CEO Ellen Kullman says, "DuPont Performance Coatings is a leader in the automotive and industrial coatings sectors with world-class products and customer service. The business continues to grow and deliver solid results. After a careful review, however, we have determined that DPC's full growth potential would be best realized outside DuPont and through the sale to Carlyle."
Reuters reports that DuPont plans to focus more on agriculture and nutrition. Bloombergsays three other private-equity firms had been in the bidding for DuPont's paint business.
The plunge continues for Groupon. Groupon [GRPN] fell to new lows today following its new earnings report, which was a disappointment. The retailer known for its deals, has fallen from its $20 IPO price to the $5 range. It fell over 26% today. Growth for Groupon is decelerating and analysts are downgrading the stock. CNBC asks if small businesses are punishing Groupon. Reuters says the continued stock plunge is piling the pressure on Chief Executive Andrew Mason. Facebook CEO Mark Zuckerberg could soon be in a similar position if Facebook continues to sink. Take a look:
CNN tech reporter Laurie Segall explains how Facebook makes it money in this video. The company made $1.21 per user last quarter. One of the ways is from the sale of virtual items. Facebook makes $1.20 per $4 virtual cow purchased on Zynga's Farmville game and $1.20 from the sale of a virtual sword in another one of Zynga's social games. Money from the sale of virtual items make up about 18% of Facebook's revenues. Advertising is Facebook's largest resume stream. However, Facebook's revenue growth has been slowing while its costs are rising. They also have a lot of mobile users and Facebook is finding it far more difficult to display advertising to its mobile customers. Take a look:
Darden has agreed to acquire Yard House USA, Inc. through an all-cash merger with a total purchase price of $585 million. The restaurants will be added to Darden's growing collection of restaurant brands, which include Red Lobster, Olive Garden, Bahama Breeze, LongHorn Steakhouse and others.
Yard House, which launched its first restaurant in 1996, offers contemporary American cuisine. Yard House also offers a wide range of draft beers and other beverages. Yard Horse was created by restaurant veteran Steele Platt, along with partners Harald Herrmann and Carlito Jocson. The chain has 39 restaurants across 13 states.
Clarence Otis, chairman and CEO of Darden, says, "Steele, Harald and Carlito have created one of the most differentiated and exciting restaurant brands in America today, with average unit volumes and returns on capital that are among the highest in the industry. Guests in a number of different markets are responding to Yard House's unique combination of handcrafted food, premium beers and other beverages, thoughtful soundtracks and elegantly designed restaurants. This combination has established Yard House as a great place for a wide range of occasions."
Darden shares (DRI) were up slightly on the news of the acquisition.
Kraft Foods Inc. announced today it will transfer its stock exchange listing to Nasdaq from the New York Stock Exchange. The transfer will take place on June 26, 2012. The ticker symbol will remain KFT. Kraft Foods says its decision to transfer includes reduced costs and greater visibility advantages for its brands.
Kraft Foods also reannounced plans to split into two companies before the end of the year - a global snacks business called Mondelez International, Inc. and a grocery business named Kraft Foods Group, Inc. Both companies will trade on the Nasdaq. The symbol for Mondelez will be MDLZ and the symbol for Kraft Foods will be KRFT. The symbol KFT will be retired following the split.
Kraft's move is a big deal for the Nasdaq following the Facebook disaster. Take a look:
Facebook [FB] is headed in the wrong direction again today. Facebook's shares are down nearly 4% in the pre-market. This would put Facebook well under its lowest point yesterday, $33.58. Facebook shares tumbled nearly 11% on Monday, which was the best day of the year, so far, for the Nasdaq. The embarrassing plunge followed Facebook's weak IPO on Friday, which only maintained its $38 IPO listing price because of huge help from underwriters.
Facebook still has an super high P/E of 78.59, so it could be a while before its shares find a bottom on the Nasdaq. Facebook was originally supposed to be listed at $28, but Facebook executives and bankers decided to bump the price up to $38 just days before the IPO. This price evaluation mistake will come at the expense of retail investors, who bought shares at $38 a share or more on Friday.
David Weidner calls Facebook "nothing but an embarrasment." Paul B. Farelll says Facebook could "destroy the U.S. economy." Facebook is going to need some good news soon to reverse this sell trend.