Who moved the cheese? (4/8/13)
Traders were cautious today as they faced signs of a slowing economy and the potential for a lackluster earnings season. Stocks traded lower for most of the session but turned positive at the close as investors used the markets’ recent pullback as a buying opportunity.
The Dow gained 48 points, led by Disney (DIS) and Coca-Cola (KO), which were both up 1%. Johnson & Johnson (JNJ) fell 1% after it was downgraded by J.P. Morgan. 17 of the 30 Dow components gained ground. The S&P 500 edged up 9, and the Nasdaq rose 18. Advancers outpaced decliners by two to one on the NYSE and six to five on the Nasdaq. The prices of Treasuries weakened. Gold futures fell $3.40 to close at $1,575.50 an ounce, and the price of crude oil gained 66 cents to settle at $93.36 a barrel.
In Earnings News:
- Earnings season unofficially kicks off after the closing bell today when Alcoa (AA) releases its first quarter earnings. Analysts are expecting weak results this quarter, with earnings growth forecasted to increase 1.6%, compared to 6.2% growth last quarter.
In Other Business News:
- Former U.K. Prime Minister Margaret Thatcher passed away today at the age of 87. Her free-market policies, which included privatizing state-run industries, weakening unions, and deregulating the financial industry, were controversial but had long-lasting effects on the British economy.
- General Electric (GE) agreed to purchase Lufkin Industries (LUFK) for $3 billion. Lufkin manufactures pumps that help extract oil from older fields, and the acquisition complements GE’s recent focus on the oil and gas industries. The all-cash deal values Lufkin at $88.50 a share, a 38% premium over its closing price on Friday. Lufkin’s shares jumped 37%, while GE’s shares gained 0.8%.
- Hewlett-Packard (HPQ), the world’s leading server maker, officially announced its Moonshot line of low-power servers. The new, smaller systems are expected to decrease power consumption by 89% and reduce costs by more than 75%. The price of the company’s stock slipped 0.1%.
*****
If I asked you what you thought the most stolen food was, how would you respond? Anything in the office fridge, you say? Clever (and quite possible true in the grand scheme of things), but not entirely correct—at least according to a report published back in 2011 by the U.K.’s Centre for Retail Research.
Initially, I would have guessed powdered baby formula. Or maybe Kobe beef or high-end chocolate. And if we narrowed the survey to just North America, those three items would indeed top the list. However, globally, the most sought-after food is cheese, which accounts for over 3% of stolen goods.
Why cheese? Prices have risen and times are tough. And in many cases, it’s small and easy to transport. According to an article in the U.K.’s The Telegraph in 2006, many Italian supermarkets had to install cameras focused on their cheese counters to discourage shoplifters from taking wedges of parmesan, which accounted for 10% of all stolen goods. But size doesn’t always discourage thieves.
A couple of weeks ago, a truck drove away from K&K Cheese in Cashton, WI with 21 tons of Wisconsin Muenster cheese and a supposed destination of Texas. However, the driver had other intentions. He was arrested at the Vince Lombardi (how perfect!) Service Area off the New Jersey Turnpike on suspicion of selling the cheese on the black market. The 42,000 pounds of cheese was valued at over $200,000.
I’m sure at one point as this bust was going down, the driver was told, “It’s ‘nacho’ cheese.” He was probably also described as a “Muenster.” And maybe his confession contained “I ‘gouda’ gotten away with it if it weren’t for those meddling kids.” No matter what, the driver’s reputation is shredded. I should stop before this gets too cheesy and give you a chance to leave your own jokes in the comments area below.
