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1139 ET 01June2009-Citi sees operating margin recovery in 2009
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Citi on Monday said it was "highly likely" that there would be a rebound in
operating margins in the second half of 2009 because of a reversal in
industrial production trends alongside a moderation in corporate inventory
reduction.
The firm wrote that a recovery would create an opportunity for value
investors.
"Historically, the direction of margins has been a consistent indicator of
the relative performance of growth and value indices," it wrote. "Accordingly,
value names should wrestle back to outperform growth stocks, suggesting that
financials and some deeper cyclical areas may prove more rewarding for
investors."
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1129 ET 01June2009-Caraustar files for Chapter 11, shares tank
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Shares of Caraustar Industries CSAR.O tumbled 56 percent to 8 cents on
Monday, after the packaging products company filed for Chapter 11 and said it
had entered into a restructuring agreement with certain noteholders that would
reduce its debt obligations by about $135 million.
The company said it has secured credit approval from General Electric
Capital Corp for a $75 million senior secured debtor-in-possession revolving
credit facility.
For details, see [ID:nBNG429236]
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1125 ET 01June2009-Markets rally after data lifts optimism
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Major U.S. indexes advanced on Monday, rallying after strong economic data
bolstered optimism that the worst of the recession may be over.
Despite that, some sentiment was pressured after General Motors GM.N
filed for bankruptcy and was kicked out of the Dow industrial index.
For details, see [ID:nN01467313]
The Dow Jones industrial average .DJI rose 2.4 percent to 8,700.97 while
the S&P 500 .SPX gained 2.5 percent to 941.89 and the Nasdaq .IXIC was up
2.7 percent to 1,821.71.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1113 ET 01June2009 Option players snap up Zoltek call options
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Shares of advanced materials firm Zoltek Cos Inc (ZOLT.O) bolted 10.2
percent higher to $10.91 in late morning trade. Its option volume is 16 times
the combined daily average, according to Trade Alert. Driving the action is the
buying of the June $7.50 and $10 calls, having earlier traded over 4,200
contracts each with blocks trading at the ask side right from the opening, said
WhatsTrading.com option strategist Frederic Ruffy. While open interest in the
$7.50 strike is sufficient to cover (5,160 lots), this appears to be fresh
buying in both strikes, he said. The stock's option implied volatility rose 5
percent to 82 percent on the day. It was not clear what was driving the bullish
activity.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1107 ET 01June2009-Barclays raises price target on American Express
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Barclays Capital on Monday raised its price target on American Express Co
(AXP.N), lifting it to $28 from $23.
"Recent troubles with rising charge-offs in AmEx's credit card portfolio
have obscured the fact that it still has a number of core businesses that are
generating high returns at this point in the cycle on relatively small amounts
of capital," the firm wrote. "As credit costs normalize in the coming years, it
should bring the value of those segments back into focus, particularly if
management continues to shrink its lending portfolio, releasing the significant
capital that supports those lower return segments."
The firm kept its equal weight rating on the Dow component, saying it was
fairly valued "given the significant risks that still remain for credit card
issuers."
Shares of AmEx rose 5.4 percent to $26.18.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
