Daily Wrap

DJIA -42.47 (-0.30%) to 13,944.05; S&P 500 -2.73 (-0.18%) to 1,509.39; NASDAQ -3.35 (-0.11%) to 3,165.13

Apple Computers (AAPL) was thrust back in the news and by an interesting party on what I found an interesting story.  David Einhorn of Greenlight Capital stated that a legal action has been initiated against AAPL over the company’s refusal to unbundled three corporate governance proposals.  AAPL states that the action would break SEC rules.  Essentially what Einhorn really wants is for AAPL to start giving its stockpile of cash back to investors and is suggesting they do so by creating preferred stock that carries a higher dividend rate.  From what I gathered, AAPL has roughly $137B in cash now and a report from Stuart Jeffrey at Nomura Securities calculates that Apple will generate about another $103 billion over three years which takes AAPL’s nest egg to $240B of more than HALF of the current marketcap.  That is crazy to me.  Later in the day AAPL release a statement saying they have been reviewing ways to return cash to investors and that they will thoroughly review Mr. Einhorn’s ideas.  AAPL closed $11.55 or 2.53% higher on the day.

Retail stocks were in focus today as a few names announced same-store sales.  In particular Macy’s (M), Kohl’s (KSS) and Nordstrom (JWN) all reported double digit gains in their same-store sales.  Only M was higher for the day and they also reaffirmed Q4 guidance which might have been the reason but looking over all 3 charts I think a bullish argument can be made for all.  JWN and M are in the stronger trend but KSS is coming off of a MACD divergent low and has an upside gap.  I will add these to my Watch List for potential set-ups.

Akamai (AKAM) was absolutely beaten today after reporting disappointing disappointing quarterly results.  Making things worse for AKAm, Wall Street piled on with downgrades.  AKAM was able to recover off today’s lows but so did the market in general.  As a reminder that you can review the list I compile each day as well as an archive of past days in the Upgrades/Downgrades section.

The following noteworthy companies are scheduled to report earnings before tomorrow’s open: AOL, ETR, LH, MCO

As for the general market, the view remains the same.  Medium term looking for higher prices while shorter term feel the rally is extended and nearing a top for pullback/consolidation.