It's no secret: E*Trade Financial Corp.'s (NASDAQ:ETFC) grand experiment of trying to transform itself into a player in the mortgage market has been a complete failure. The online broker tried to diversify its revenue stream with an experimental foray into toxic mortgages, which only left the company deep in debt. How deep the current status of the trouble is will be seen when E*Trade's second-quarter earnings are announced Wednesday after market close at 5 p.m. ET.
Analysts expect the company to post its eighth-consecutive quarterly loss at 38 cents per share. That number is in the ballpark of the 41 cents per share, or $232.7 million, loss in the first quarter that E*Trade registered. The company got some breathing room in the second quarter when it exchanged $1.7 billion of its interest-bearing senior unsecured bonds for convertibles notes due 10 years from now. Additionally, the company raised additional capital from a $600 million stock offering. But is this enough for E*Trade? For now, possibly yes, but investors aren't expecting to see a profit in 2009 and possibly in 2010 as well, an outlook that'll likely continue to weigh down the stock, which closed at $1.29 on Tuesday.
E*Trade may see a brighter future with a sale or at least a major divestment to a competitor. Why? The online trading sector seems to be a mature sector with new customers hard to come by, especially with the downturn of the equities market. The experiment of expanding into mortgages was an abysmal failure, and there's not many other sectors that E*Trade can grow in, except possibly by entertaining a deal with a peer or an established bank looking for an online broker play. - Gerald Magpily
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Showing posts with label Nasdaq. Show all posts
Showing posts with label Nasdaq. Show all posts
Thursday, July 30, 2009
Thursday, July 9, 2009
E*TRADE Makes a Good Trade
E*Trade's (Nasdaq: ETFC) debt exchange offer is a success. The online discount broker received commitments from its creditors to swap more than $1.8 billion in debt for new convertible bonds.
The healthy reception during the early tender period is the result of several factors.
* The new bonds don't bear interest as zero coupons, but the conversion terms are sweet. The Class A debentures can be turned into E*Trade stock, at a rate of just $1.034 per share.
* Citadel, E*Trade's largest shareholder and creditor, already committed to the deal, leading by example.
* With fears of even greater capital requirements looming, creditors realize that this is the best move to keep the discounter from buckling.
E*Trade still has a long way to go before it catches up to larger, profitable rivals TD AMERITRADE (Nasdaq: AMTD) and Charles Schwab (Nasdaq: SCHW). All 12 of the major analysts following the company expect E*Trade to post another loss this year. They're all over the map in their expectations for 2010, with a profit target range between a loss of $1.00 a share and a profit of $0.12 a share.
Trading activity has been brisk, and E*Trade continues to pad to its brokerage account totals. The recent rollout of apps for Apple (Nasdaq: AAPL) and Research In Motion (Nasdaq: RIMM) smartphones can only help, making its Web-based trading platform even stickier.
E*Trade's non-brokerage business has been going the other way, but it's hard to win online banking clients when money market yields are pathetic and borrowing standards are tightening.
The road to recovery will be long for E*Trade, but at least the discounter isn't making the dangerous mistake of standing still.
source
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The healthy reception during the early tender period is the result of several factors.
* The new bonds don't bear interest as zero coupons, but the conversion terms are sweet. The Class A debentures can be turned into E*Trade stock, at a rate of just $1.034 per share.
* Citadel, E*Trade's largest shareholder and creditor, already committed to the deal, leading by example.
* With fears of even greater capital requirements looming, creditors realize that this is the best move to keep the discounter from buckling.
E*Trade still has a long way to go before it catches up to larger, profitable rivals TD AMERITRADE (Nasdaq: AMTD) and Charles Schwab (Nasdaq: SCHW). All 12 of the major analysts following the company expect E*Trade to post another loss this year. They're all over the map in their expectations for 2010, with a profit target range between a loss of $1.00 a share and a profit of $0.12 a share.
Trading activity has been brisk, and E*Trade continues to pad to its brokerage account totals. The recent rollout of apps for Apple (Nasdaq: AAPL) and Research In Motion (Nasdaq: RIMM) smartphones can only help, making its Web-based trading platform even stickier.
E*Trade's non-brokerage business has been going the other way, but it's hard to win online banking clients when money market yields are pathetic and borrowing standards are tightening.
The road to recovery will be long for E*Trade, but at least the discounter isn't making the dangerous mistake of standing still.
source
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Tuesday, July 7, 2009
How the major stock indexes fared on Thursday
A dour report on job losses in June sent stocks sharply lower Thursday.
Major stock indexes fell more than 2.6 percent after the government said the U.S. unemployment rate hit a 26-year high. The Dow Jones industrials closed at their lowest level in six weeks. Trading on the New York Stock Exchange was extended until 4:15 p.m. Eastern time in order to execute customer orders impacted by system irregularities, an NYSE spokeswoman said.
The Dow Jones industrial average fell 223.32, or 2.6 percent, to 8,280.74.
The Standard & Poor's 500 index fell 26.91, or 2.9 percent, to 896.42.
The Nasdaq composite index fell 49.20, or 2.7 percent, to 1,796.52.
For the week:
The Dow is down 157.65, or 1.9 percent.
The S&P is down 22.48, or 2.5 percent.
The Nasdaq is down 41.70, or 2.3 percent.
For the year:
The Dow is down 495.65, or 5.7 percent.
The S&P is down 6.83, or 0.8 percent.
The Nasdaq is up 219.49, or 13.9 percent.
A service of YellowBrix, Inc.
source
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Major stock indexes fell more than 2.6 percent after the government said the U.S. unemployment rate hit a 26-year high. The Dow Jones industrials closed at their lowest level in six weeks. Trading on the New York Stock Exchange was extended until 4:15 p.m. Eastern time in order to execute customer orders impacted by system irregularities, an NYSE spokeswoman said.
The Dow Jones industrial average fell 223.32, or 2.6 percent, to 8,280.74.
The Standard & Poor's 500 index fell 26.91, or 2.9 percent, to 896.42.
The Nasdaq composite index fell 49.20, or 2.7 percent, to 1,796.52.
For the week:
The Dow is down 157.65, or 1.9 percent.
The S&P is down 22.48, or 2.5 percent.
The Nasdaq is down 41.70, or 2.3 percent.
For the year:
The Dow is down 495.65, or 5.7 percent.
The S&P is down 6.83, or 0.8 percent.
The Nasdaq is up 219.49, or 13.9 percent.
A service of YellowBrix, Inc.
source
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Monday, July 6, 2009
Stocks, commodities retreat after job losses top estimates
A worse than expected employment report sent stock prices sharply lower Thursday.
The Dow Jones industrial average fell 223.32 points to 8,280.74, its biggest decline since April 20. All 30 stocks in the index traded lower. The Nasdaq composite index was down 49.20 points to 1,796.52 and the S&P 500 stock index dropped by 26.91 points to 896.42.
For the day, all three indexes were down more than 2.5 percent. That was enough to wipe out modest gains in the first three sessions of the holiday-shortened week. The Nasdaq was down 2.27 percent, the S&P 500 fell 2.44 percent and the Dow dipped 1.87 percent.
The Labor Department reported that payrolls fell by 467,000 jobs in June, much more than had been anticipated. The nation's unemployment rate rose to 9.5 percent.
The prospects of continued economic weakness sent oil prices lower. Crude closed at $66.73 a barrel, down $2.58 on the day and 3.5 percent for the week.
"It's ugly out there," Jack Ablin, who oversees $60 billion as chief investment officer at Harris Private Bank in Chicago, told Bloomberg Television. "We were trying to gain a little bit of traction on the jobs front, to get less bad numbers on a monthly basis. Clearly this month's report is a setback."
The stock market's three-week slump has been spurred by concern the S&P 500's 40 percent surge since March outpaced prospects for a recovery in the economy and corporate profits. The U.S. equity benchmark is poised to cap its longest stretch of weekly losses since March. U.S. markets will be closed Friday for the Independence Day holiday.
A divergence of Dow Jones's industrial, transportation and utility stock indexes suggests a rally in the U.S. market may stay stalled near current levels, according to Andrew Burkly, a technical analyst at Brown Brothers Harriman.
The Dow Jones industrial average last month rose to the highest reading since January before retreating to a level that's still above the average of the past 50 days. The Dow Jones utilities average, on the other hand, extended its June rally into this month, hitting a five-month high yesterday. The Dow Jones transportation average, while also staying above its 50-day moving average, generated the least bullish pattern by failing to exceed a May high, according to Burkly.
The second-quarter earnings season will kick off next week with Alcoa Inc. (NYSE: AA), the largest U.S. aluminum producer, reporting results on July 8. Analysts estimate profits in the S&P 500 declined 34 percent in the second quarter and will slump 21 percent on average in the third before rebounding 61 percent in the final three months of the year, according to Bloomberg data.
"I have a hard time imagining we're going to go into a new raging bull market from here," said Randy Frederick, director of trading and derivatives at Charles Schwab & Co. in Austin, Texas. "People can't spend if their comfort level is low and they're worried about their jobs."
Home Depot Inc. (NYSE: HD), the biggest home-improvement retailer, lost 3.9 percent to $22.79. Alcoa, the nation's largest aluminum producer, retreated 3.7 percent to $9.97. Travelers, the insurer that stayed profitable through the credit crisis, slumped 3.5 percent to $39.69.
General Motors Corp. (OTC: GMGMQ), the bankrupt automaker selling most of its assets to the U.S. government, may file for an initial public offering of its stock in 2010, according to an adviser to President Barack Obama. GM was in bankruptcy court this week seeking approval to sell most of its assets to the Treasury, which is paying for the company with the more than $27 billion in loans it has made to the automaker.
Johnson Controls Inc. (NYSE: JCI) posted the S&P 500's second-steepest loss, sliding 7.4 percent to $21.07. The maker of car interiors and batteries was downgraded to "Hold" from "Buy" at Deutsche Bank AG on concern the stock price already reflects the company's ability to navigate the auto industry slump.
The stock's decline in the index was exceeded only by an 8.9 percent tumble in shares of Monster Worldwide Inc., the world's largest online recruiting company, following the jobs report. The Labor Department figures showed the jobless rate rose to 9.5 percent, the highest since August 1983, from 9.4 percent.
"It's clearly disappointing," Hugh Johnson, who manages more than $1.5 billion as chairman of Albany, New York-based Johnson Illington, said of the employment data. "I would argue that we'll have a correction between 5 and 15 percent" in the stock market.
All 40 stocks in the S&P 500 Energy Index tumbled. Halliburton Co. (NYSE: HAL) and Hess Corp. (NYSE: HES) lost more than 5.5 percent, leading the measure of oil drillers, explorers and equipment suppliers to a 3.1 percent slump.
Elan Corp. (NYSE: ELN) surged 13 percent to $7.88. Johnson & Johnson (NYSE: JNJ) agreed to develop its medicines against Alzheimer's disease and pay $1 billion for an 18.4 percent stake in the Irish drugmaker.
Benchmark indexes advanced yesterday, adding to gains from the S&P 500's best quarter since 1998, as improving gauges of manufacturing and home sales added to optimism the worst of the recession is over.
source
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The Dow Jones industrial average fell 223.32 points to 8,280.74, its biggest decline since April 20. All 30 stocks in the index traded lower. The Nasdaq composite index was down 49.20 points to 1,796.52 and the S&P 500 stock index dropped by 26.91 points to 896.42.
For the day, all three indexes were down more than 2.5 percent. That was enough to wipe out modest gains in the first three sessions of the holiday-shortened week. The Nasdaq was down 2.27 percent, the S&P 500 fell 2.44 percent and the Dow dipped 1.87 percent.
The Labor Department reported that payrolls fell by 467,000 jobs in June, much more than had been anticipated. The nation's unemployment rate rose to 9.5 percent.
The prospects of continued economic weakness sent oil prices lower. Crude closed at $66.73 a barrel, down $2.58 on the day and 3.5 percent for the week.
"It's ugly out there," Jack Ablin, who oversees $60 billion as chief investment officer at Harris Private Bank in Chicago, told Bloomberg Television. "We were trying to gain a little bit of traction on the jobs front, to get less bad numbers on a monthly basis. Clearly this month's report is a setback."
The stock market's three-week slump has been spurred by concern the S&P 500's 40 percent surge since March outpaced prospects for a recovery in the economy and corporate profits. The U.S. equity benchmark is poised to cap its longest stretch of weekly losses since March. U.S. markets will be closed Friday for the Independence Day holiday.
A divergence of Dow Jones's industrial, transportation and utility stock indexes suggests a rally in the U.S. market may stay stalled near current levels, according to Andrew Burkly, a technical analyst at Brown Brothers Harriman.
The Dow Jones industrial average last month rose to the highest reading since January before retreating to a level that's still above the average of the past 50 days. The Dow Jones utilities average, on the other hand, extended its June rally into this month, hitting a five-month high yesterday. The Dow Jones transportation average, while also staying above its 50-day moving average, generated the least bullish pattern by failing to exceed a May high, according to Burkly.
The second-quarter earnings season will kick off next week with Alcoa Inc. (NYSE: AA), the largest U.S. aluminum producer, reporting results on July 8. Analysts estimate profits in the S&P 500 declined 34 percent in the second quarter and will slump 21 percent on average in the third before rebounding 61 percent in the final three months of the year, according to Bloomberg data.
"I have a hard time imagining we're going to go into a new raging bull market from here," said Randy Frederick, director of trading and derivatives at Charles Schwab & Co. in Austin, Texas. "People can't spend if their comfort level is low and they're worried about their jobs."
Home Depot Inc. (NYSE: HD), the biggest home-improvement retailer, lost 3.9 percent to $22.79. Alcoa, the nation's largest aluminum producer, retreated 3.7 percent to $9.97. Travelers, the insurer that stayed profitable through the credit crisis, slumped 3.5 percent to $39.69.
General Motors Corp. (OTC: GMGMQ), the bankrupt automaker selling most of its assets to the U.S. government, may file for an initial public offering of its stock in 2010, according to an adviser to President Barack Obama. GM was in bankruptcy court this week seeking approval to sell most of its assets to the Treasury, which is paying for the company with the more than $27 billion in loans it has made to the automaker.
Johnson Controls Inc. (NYSE: JCI) posted the S&P 500's second-steepest loss, sliding 7.4 percent to $21.07. The maker of car interiors and batteries was downgraded to "Hold" from "Buy" at Deutsche Bank AG on concern the stock price already reflects the company's ability to navigate the auto industry slump.
The stock's decline in the index was exceeded only by an 8.9 percent tumble in shares of Monster Worldwide Inc., the world's largest online recruiting company, following the jobs report. The Labor Department figures showed the jobless rate rose to 9.5 percent, the highest since August 1983, from 9.4 percent.
"It's clearly disappointing," Hugh Johnson, who manages more than $1.5 billion as chairman of Albany, New York-based Johnson Illington, said of the employment data. "I would argue that we'll have a correction between 5 and 15 percent" in the stock market.
All 40 stocks in the S&P 500 Energy Index tumbled. Halliburton Co. (NYSE: HAL) and Hess Corp. (NYSE: HES) lost more than 5.5 percent, leading the measure of oil drillers, explorers and equipment suppliers to a 3.1 percent slump.
Elan Corp. (NYSE: ELN) surged 13 percent to $7.88. Johnson & Johnson (NYSE: JNJ) agreed to develop its medicines against Alzheimer's disease and pay $1 billion for an 18.4 percent stake in the Irish drugmaker.
Benchmark indexes advanced yesterday, adding to gains from the S&P 500's best quarter since 1998, as improving gauges of manufacturing and home sales added to optimism the worst of the recession is over.
source
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