Sheds 100 Points|
Priceline.com Inc. (PCLN) shares were literally hammered Wednesday, down almost
110 points, off by 15% into mid-afternoon trading, following the online travel
company's disappointing Q3 profit outlook. The company reported late Tuesday
that for its Q3 ending in September, it expects to earn between $11.10 and
$12.10 a share, excluding one-time items. Reports from the company indicate
economic conditions in Europe revolving around the ongoing euro crisis were the
main reason for its forecast.
SodaStream (SODA) Israel-based maker of its namesake carbonated beverage
machine, raised its 2012 outlook for the second time this year, creating a move
of its shares to the upside by 3% into mid-afternoon trading on Wednesday. The
company reported they now project revenue to grow 40% this year over 2011, with
profit to increase 55%. Over the past 18 months, SodaStream has been making a
strong push into the U.S. Investors maintain a very high short position at 49%,
in the company.
After a government weekly report showed a larger-than-expected decline in
crude-oil supplies on Wednesday, crude-oil futures held onto their gains on.
Crude-oil futures reached their highest in more than two months extending an
advance into a fourth session. On the New York Mercantile Exchange, crude-oil
for September delivery (NMN:CLU2) rose 43 cents or 0.4%, to $94.07 a barrel. For
the week ended August 3, the Energy Information Administration reported a
decline of 3.7 million barrels of crude-oil. Gasoline supplies reported by the
EIA were down 1.8 million barrels, and distillates retreated 700,000 barrels.
The Labor Department reported Wednesday that U.S. productivity rose at a modest
1.6% clip in Q2 with the output of goods and services rising much faster than
the amount of time employees worked. The government also said output rose 2.0%
in the April-to-June period, while hours worked increased at a slower 0.4% rate,
sharply lower from a 3.2% gain in hours worked during Q1. Unit-labor costs
slowed to a 1.7% increase from 5.6% during Q1. To match the Q1 gain after
factoring out inflation, hourly wages rose 2.6%. Productivity slowed to a 0.2%
increase from 5.5% in the first three months of 2012 in the manufacturing
In the wake of several high-profile incidents, the Securities and Exchange
Commission said it will be holding a roundtable on market technology next month.
The SEC roundtable discussion set for September 14, will be focused on the
design and control of all types of automated market systems. Last week, Knight
Capital erroneously conducted several trades during a roll-out of technology
that cost the firm $440 million.
The Federal Reserve on Wednesday is scheduled to buy long-dated Treasury
securities for its stimulus plan that extends the average maturity of the U.S.
government debt sitting on its balance sheet. The central bank aims to buy $1.5
billion to $2.0 billion in notes due between February 2036 and May 2042.
Originally, Operation Twist stimulus program was set to end in June but,
extended at the June policy meeting to year-end for the Fed to exchange an
additional $267 billion in short-dated notes for longer-dated ones. The Fed aims
to buy $44 billion and sell $38 billion this month in order to keep the Fed’s
balance sheet size steady. The Fed hopes to push long-term borrowing costs lower
for consumers and businesses to facilitate the economic recovery, by purchasing
A signal that the Bank of England could inject further stimulus in the coming
months, the central bank cut its forecasts for growth and inflation in the U.K.
economy. The central bank said in its quarterly inflation report, the damaging
economic effects of the financial crisis could persist longer than previously
thought, while inflation is likely to fall below target from mid-2013, remaining
there for two years. The BOE said the biggest risk to any recovery comes from
the euro zone and specifically, the danger that leaders will delay resolving the
long-running fiscal crisis. The economy across the pond sank deeper into
recession in Q2. Compared with the previous three months, output tumbled 0.7%,
while on an annual basis it shrank 0.8%. BOE’s charts show rate setters think
output will return to growth in annual terms, later this year and end 2012 at an
annual growth rate of just under 1% with expected annual growth of just over 2%
at the end of 2013 down, from a forecast in May of around 2.5%. Thanks to a fall
in inflation, as well as the 'Funding for Lending' scheme introduced by the
central bank and the government sees growth being supported by a rise in
consumer spending. In Q3 of 2013, policy makers expect the annual rate of
inflation to return to the BOE target of 2% and remain there until mid-2015.
Forecasts are based on investor expectations that the BOE will cut its key
interest rate which are currently at a record-low 0.5%, by Q2 of 2013, at the
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