Edwards Lifesciences Sinks in After
Shares of Edwards Lifesciences Corp. (EW) got the smack down in afterhours
trading on Monday - shares were off 17% and will draw massive amounts of trader
attention to the short side, come Tuesday morning. The company warned Q3 revenue
will miss its own estimate because of weak transcatheter heart valve sales.
Edwards reported they now expect revenue of $448 million which is below the
forecasted $465 million to $485 million range it issued in July.
The $5-per-gallon gasoline prices that plague California and the West Coast are
not likely to spread across the country like some infectious disease because
there is plenty of oil in the market and there’s enough refining capacity to
meet demand. Gas prices across the nation are far less vulnerable to the recent
refinery outages that put the hammer to prices in California due to few
pipelines that connect the state to the rest of the country. California gets
most of its crude via tankers from Alaska, Asia or South America and refines
most of its gasoline in-state. The state has done little to boost its refining
capacity, bucking heads with the oil industry for years over a host of
environmental regulations and strict gasoline formulas. “Refiners and regulators
on the West Coast don’t exactly have a warm relationship,” according to Tom
Kloza, chief oil analyst at Oil Price Information Service (OPIS). Although there
is little expansion on the East Coast, surplus gasoline cargoes from Europe or
eastern Canada can reach New York Harbor within 10-11 days which makes it much
easier to deal with shortages than in California where the nearest overseas
suppliers are in distant Asia. California is extremely vulnerable to refinery
outages so when a fire at the Chevron Corp. (CVX) Richmond refinery, a power
outage at the Torrance refinery for Exxon Mobil (XOM) and maintenance work at
additional plants took out about 25% of the state’s gasoline production
capacity, wholesalers panicked. The results are skyrocketing prices at the pump.
According to the AAA Daily Fuel Gauge Report , a gallon of regular gas averaged
$4.67 statewide in California on Monday, up 50 cents in just a week. In
comparison, the national average price per gallon of gas stands at $3.82 a
gallon, up 4 cents from a week ago. California has other issues that affect
price per gallon. California requires motorists to burn summer blend gasoline
until the end of October while the summer gas season typically ends elsewhere on
September 15. Summer gasoline is formulated to pollute less during the hot
summer months but, hits the wallet harder since it is more expensive to produce.
California refiners are deliberately drawing down inventories of summer-grade
gas as they move to switch over to the winter grade, a switch the rest of the
country has already made. Because of California’s geographical isolation, its
fuel market is thinly traded since there are not that many traders, for their
market. The wholesale market is much more susceptible to wild price swings than
regions that are more actively traded. Independent refiners still active in the
California market consist of Phillips 66 (PSX), Tesoro Corp. (TSO) and Valero
Energy Corp. (VLO). According to Kloza, wholesale prices in California plunged
to $3.30 a gallon Monday from a record $4.30 on Thursday, triggered in part by
Governor Jerry Brown ending the summer gasoline season, early. Drivers will
begin to see the price effect at the pump in a few days.
Marathon Petroleum Corp. (MPC) shares were higher by 6% on Monday after agreeing
to buy BP PLC’s Texas City refinery and infrastructure assets. Marathon
Petroleum will pay a base purchase price of $598 million, plus nearly $1.2
billion in inventories and an additional $700 million over six years - subject
to conditions. The deal is expected to contribute to the buyer’s earnings in the
first year of operations.
Alliance Financial Corp. (ALNC) announced Monday they agreed to a takeover from
NBT Bancorp Inc. (NBTB) in a deal valued at approximately $233 million that
combines the two upstate New York lenders. Alliance holders will receive 2.1779
shares of NBT common stock or roughly $48.24 a share based on Friday's close,
per details of the deal. The agreed upon figure represents a 22% premium of
Friday's close and is well above its all-time high of $41.85 in September.
Alliance shares were higher by 16% into the close of the trading session on
Monday. NBT shares ended the trading session down 3%. The deal broadens NBT's
placement into the Syracuse area in Central New York plus, adds $1.4 billion in
assets. Alliance Chairman and Chief Executive Jack H. Webb will join the board
of NBT and will become executive vice president, strategic support for NBT. The
deal is expected to close in Q2 of 2013.
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Oct 8, 2012