Hot stocks to watch: The IMF cut global economic growth expectation, and predicted that the EU countries will not be able to complete the budget target. The third season of U.S. corporate earnings reports came in, and investors got cautious. The U.S. stocks traded lower in early trading Tuesday, and swung within a narrow range in the afternoon trading. The three major stock indexes closed down.
The most concerned one among the hot stocks was Alcoa Inc. (AA), for litigation expenses, the company turned to a net loss in the third quarter, but the results were still better than Wall Street’s expectations. Alcoa recognized the third-quarter loss of $143 million, or 13 cents per share. Excluding non-recurring items, the company posted earnings 3 cents per share.Analysts pooled by FactSet Research had expected the company to break even. The company posted a profit of $172 million, or earnings of 15 cents per share for the same period of last quarter.
As the declines in metal prices, Alcoa saw the third-quarter sales declining 8% to $5.8 billion, topping the $5.56 billion average estimate of analysts.
Due to the economy slowdown in China, Alcoa cut the growth rate of the global aluminum demand in 2012 from 7% to 6%. AA stock price rose 0.11% on Tuesday.
S&P Capital IQ released research report, giving Google (GOOG) stock a buy rating and raised the target price on this stock to $ 800 from $675.
Yum! Brand (YUM), the parent company of KFC, Pizza Hut and Taco Bell chains published its third quarter earnings report in the after-hours trading session Tuesday showing its third quarter earnings were better-than-expected, prompting YUM stock to rise more than 4% in after-hours. In the regular trading session, the stock traded down 1.34%.
For the third quarter as of September 28, Yum! Brand booked $3.57 billion in net sales, higher than last year same period’s $3.27 billion; net profit came in at $471 million, equivalent to $1 per share; Analysis had been expecting the company would post earnings of 97 cents per share on net sales of $3.66 billion for this quarter.
The company’s sales in China for the quarter amounted to $2 billion, accounting for 56% of the Group’s total revenue, and more than half for the first time; sales in China represented a year-over-year increased of 22%.
In addition, the earnings report pointed out that the third quarter same-store sales grew by 6%, in line with the market expectations.
These two search engine companies also came in as hot stocks today. Analysts at Capital IQ said the risk of acquisition of Motorola Mobility has reduced, and expects the related expenses will be between $275 million and $300 million. Google will primarily focus on the intelligent phones and tablet PCs, which will bring stable revenues for the company. The 8-K document filed by Google last week also showed it will bear the cost of the restructuring expenditures of Motorola. GOOG stock price retreated 1.81% on Tuesday.
Baidu (BIDU) shares fell sharply by nearly 7% on Tuesday, mainly due to an analyst at Credit Suisse Group downgraded Baidu’s stock rating. Baidu will release its third quarter earnings on October 17. Credit Suisse analyst Wallace Cheung today released a research report, downgrading Baidu’s stock rating from “neutral” to “underperform”, and cut the target price from $118 down to $83. This is second time over the past few weeks that Baidu’s stock rating was downgraded. Cynthia Meng, an analyst at Jefferies, downgraded Baidu’s stock rating from “buy” to “hold” on October 1.
Avian Securities released a research report, showing it cut the rating on Qualcomm Inc (QCOM) stock to neutral rating, and reduced the price target on this stock to $60 from $62.
Avian expects Qualcomm will face fierce chip competitors, including Nvidia, Broadcom, as well as MediaTek, these chip manufacturers all design chip on the basis of ARM architecture. Among them, Nvidia’s design orders in tablet field have surpassed Qualcomm, and has begun invading the high-end smart phone field and its partners include LG / ZTE / HTC / Lenovo, etc., meanwhile MediaTek attacks in the low end market. QCOM stock price gave up 1.64% on Tuesday.
