BetterTrades Stock Market Summary - August 18, 2008

For the first trading session in the third week of the month, many investors and consumers alike are still worried about the overall state of the market and in particular the financial industry. In a day which saw the stocks for Fannie Mae (FNM) and Freddie Mac (FRE), both fall to levels not seen in nearly 20 years, the markets were pushed lower and lower by the close and the only thing helping consumers and the markets, is the falling price for commodities. By the sound of the closing bell, the Dow Jones Industrial average slipped 180.51 points, or 1.55%, to 11,479.39, but not before slipping more than 225 points, as the broader market indicators followed the downward trek of the Dow. The S&P 500 index dropped 19.60 points, or 1.51%, to 1,278.60, as the NASDAQ composite index gave up 35.54 points, or 1.45%, to close the session at 2,416.98.

BHP Billiton LTD. (BHP), a leader in the global natural resources industry has high-value and industry-leading positions in aluminum, metallurgical coal, thermal coal, copper, ferro-alloys, iron ore and titanium minerals and also has substantial interests in oil, gas, nickel, diamonds and silver. The company made it known early Monday morning that their total earnings for the fiscal year of 2008 were once again, a record for the seventh straight year. For the year, BHP Billiton posted record revenues of $59.47B, up from $47.47B for all of 2007, a 25% increase in total sales. Profits also jumped for the year, gaining more than 15% to come in at $15.39B. Much of the success for the company came from an increase in revenues for base metals, which surged nearly 17%, and from petroleum, iron ore, manganese and coal sales which accounted for more than a 40% jump in revenues. Based on a stellar earnings release, the company also announced early today that they were increasing their dividends, from $0.47 to $0.70 per share. On the day, shares of BHP were up slightly, adding $0.26, or 0.4%, to end the session at $65.48.

Lowe's Companies Inc. (LOW), a retailer of home improvement products throughout the world, with specific emphasis on retail do-it-yourself and commercial business customers, specializes in offering products and services for home improvement, home decor, home maintenance, home repair and remodeling and maintenance of commercial buildings. Early Monday morning, the company announced that their profits decreased for the 2Q, but managed to get the better of market expectations. For the recent period, Lowe’s recorded earnings of $938M, or $0.64, down from last year’s results of $1.02B or $0.67 per share. Overall sales for the quarter did, however, increase slightly, from $14.17B last year, to $14.5B this year, a 2.4% increase. In the meantime, analysts were anticipating that the company post earnings of $0.56 per share on total sales of $14.1B. with many concerns still looming within the home renovation industry, Lowe’s is expecting that overall sales for the upcoming quarter will increase by a modest 1% to 2% and is projecting full-year earnings to be in the range of $1.48 to $1.56 per share while analysts are predicting earnings of $1.50 per share. By the sound of the closing bell today, shares of Lowe’s were moderately higher, adding $0.04, or 0.2%, to end at $24.54 a share.

Perrigo Company (PRGO), the nation’s largest manufacturer of store brand over-the-counter (non-prescription) pharmaceutical products which also manufactures store brand nutritional products. The company's products include analgesics, cough and cold remedies, antacids, laxatives, feminine hygiene and smoking cessation products, and vitamins, nutritional supplements and nutritional drinks. Monday morning, the company made it known that they posted results for their 4Q which saw earnings surge more than 46% on the backs of higher demand within the company’s consumer health products. For the previous three months, Perrigo recorded profits of $27.5M, or $0.29 per share, up from last year’s results of $18.8M, or $0.20 per share. In addition to higher profits, sales were also higher, inevitably, jumping from $374.3M last year to $500.2M this year, a 34% increase year-over-year. All the while, analysts were projecting that Perrigo post earnings of $0.41 per share on total sales of $476.3M. The recent upswing in profits was directly attributed to the company’s increase in health products which posted total revenues of $375M for the quarter. Along with quarterly results, the company also released full-year figures in which the company earned $135.8M, or $1.43 per share, up from 2007’s results of $73.8M, or $0.79 per share. Overall sales for them also increased, from $1.45B in 2007, to $1.82B for 2008. By the sound of the closing bell, shares of PRGO were higher, up $0.61, or 1.7%, to close out at $35.98.

Trina Solar LTD. (TSL), which is currently one of the few private manufacturers which has developed a vertically integrated business model from the production of monocrystalline ingots, wafers and cells to the assembly of high quality modules, announced early this morning that the company’s 2Q earnings advanced on the heels of higher overall sales and increased margins. For the recent period, Trina Solar posted profits of $17.1M, or $0.68 per share, up from $7.4M, or $0.32 per share from a year ago. Today’s release stated that profits increased more than 130% year-over-year. Revenues, meanwhile, almost tripled from last year’s results, coming in at $204.2M, up from $75.3M. With a most impressive earnings result, the company has further increased their expectations for full-year revenues as the company sees total sales ranging from $850M to $900M, up from earlier predictions of $770M to $808M. Despite the company posting a solid earnings report and upping their full-year outlook, investors looked upon the news differently, sending the shares lower by $0.84, or 2.7%, to close at $30.14.

Yucheng Technologies LTD. (YTEC), a leading IT service provider to the Chinese banking industry including: channel-related IT solutions, such as web banking and call centers; business-related processing solutions, such as core banking systems, foreign exchange and treasury management; and management-related IT solutions, such as risk analytics and business intelligence. It is also a leading third party provider of POS merchant acquiring services in partnership with banks in China. With that, the company released early this morning, results from their 2Q which showed that the company earned $2.4M, or $0.13 per share, up from last year’s results of $1.8M, or $0.15 per share. Quarterly revenues were higher as well, jumping nearly double to come in at $25M. Analysts, meanwhile, were anticipating that the company post earnings of $0.13 per share on total sales of $19.6M. As the results got the better of market analysts, the company in turn raised their outlook for the year, citing overall sales should come in at $88M, up from $71.5M to $74.5M, previously stated, and their overall profit should be in the range of $14.7M to $15.2M. By the close, shares of YTEC were down more than 7% in today’s trading, giving up $1.03 to end at $13.19 per share.

Abercrombie & Fitch Co. (ANF), which is principally, engaged in the purchase, distribution and sale of men's, women's and kids' casual apparel. The company's retail activities are conducted under the Abercrombie & Fitch and Abercrombie trade names through retail stores, a catalogue, a magazine/catalogue and a website, all bearing some form of the company name. Before the markets opened this past Friday, the company confirmed results for their 2Q in which earnings slipped for the quarter based largely on the fact that discretionary spending has slowed tremendously over the past year or so. For their recent quarter, ANF posted earnings of $77.8M, or $0.87 per share, down 4% from last year’s results of $81.3M, or $0.88 per share. Revenues, albeit slightly, increased year-over-year by 5% to total $845.8M. During the time frame, analysts were predicting that the clothing retailer post earnings of $0.86 on total sales of $851.4M. The company also reiterated full-year earnings per share of $4.95 to $5, well below market expectations of $5.36 per share. By the close of Friday’s session, shares of ANF closed up by $0.02 at $52.59. However, Monday’s session brought dire results as the stock lost more than 2% by the close, dropping $1.12 to end at $51.47. Shares of ANF have been trading within a range of $48.21 to $85.77 over the past twelve months.

While consumer spending continues to be curbed by numerous economic factors, the price of crude is trying to do its part as the cost for a barrel resumes its downward trek to start the week. Light, sweet crude for September delivery retreated on the day, falling $0.90 to $112.87 a barrel, after jumping as high as $115.35 before declining. In additional NYMEX trading, heating oil futures slipped $0.0343 to $3.0848 a gallon, while gasoline prices fell $0.045 to $2.8152 a gallon. Natural gas futures dropped $0.204 to $7.888 per 1,000 cubic feet.

As the price of crude continues its decline, so does the price of gasoline. At the pump, a gallon of regular dropped $0.01 overnight to a new national average of $3.741, according to auto club AAA, the Oil Price Information Service and Wright Express. With consumers cutting back on driving, prices have now retreated some 9% from the record of $4.114 a gallon achieved on July 17th.

With the markets taking a hard hit to begin the week, many investors looked towards the safety of government backed securities as Treasury prices ended the day higher. By the conclusion of trading, the 10-year note gained 7/32 to 101 16/32, while its yield slipped to 3.82% from 3.84% on Friday. The 30-year note advanced as well, adding 19/32 to 101 2/32, and its yield slipped to 4.43% from 4.47% last week. In addition, the 2-year note increased 3/32 to 100 22/32 and its yield retreated from 2.39% to 2.36%.

The U.S. Dollar started the week off slowly, as the major European currencies gained ground on the greenback to reverse the trend seen throughout last week’s trading. On the day, the 15-nation Euro bought $1.4705 in early European trading, up from the $1.4680 the dollar bought in late New York trading Friday, while the British pound was also higher, up from $1.8665 to $1.8654. In additional currency trading, the Dollar bought 110.14 Japanese yen, down from 110.56 yen in New York late Friday.

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