bid

The era of the 'frugal consumer' is upon us, and it's extending all the way up the social/economic ladder.

• Picasso painting fails to sell – There was no buyer earlier this week for a 1971 Picasso painting, "Woman with Hat," estimated by Sotheby's (NYSE: BID) auction house to go at bid for $16-24 million. Further, an Alberto Giacometti 1951 bronze sculpture of a cat, also with a $16-24 million estimate, was withdrawn. Sotheby's said each fell below their reserve prices, The Associated Press reported.

There's a saying among the specialists and traders who do most of the living and breathing at the New York Stock Exchange that goes: "When the little guys are cutting back, that's an inconvenience. But when the big guys start cutting back, that's a problem."

Sotheby's auction house has abruptly withdrawn a Picasso Cubist painting that was set to be auctioned on November 3, The New York Times reported Monday.

This, as CNN's Larry King would say, is not good news.

1909 work is withdrawn

The painting, "Arlequin" (1909), was estimated at more than $30 million, and was one of the most expensive works in the fall art season. David Norman, a co-chairman of Sotheby's Impressionist and modern art department worldwide, told The Times the painting was withdrawn "for private reasons." Sotheby's (NYSE: BID) shares rose 20 cents to $7.85 in mid-day Tuesday trading.

Most investors/readers know about the stream of U.S. economic statistics originating from the U.S. Commerce and Labor Departments, and from other Washington agencies, that form the basis for 'taking the pulse' of the economy.

But more experienced investors know about that group of 'unofficial statistics' that fill-in the economic landscape and frequently provide clues regarding future economic activity that the others do not. In this category, you'll find mall traffic levels, those infamous corrugated box orders, and package deliveries, as metrics of significance.

And another metric worth keeping an eye on, in the interpretation of stock exchange specialists? The demand and prices for fine art.

Fine art, antiques, and collectibles are the aesthetic knick-knacks of the gentry. Or as one New York Stock Exchange (NYSE: NYX) specialist put it, "A lot of the other metrics measure how the little guy is doing. Art demand measures how the big guys are doing."

The significance? "When the little guy is pulling back, that's a concern. But when the big guys are pulling back, now that's a problem," he said.

Art demand slowdown telegraphing global slump?

Moreover, a problem may be surfacing with the 'big guys.' Sotheby's, the world's largest, publicly-traded auction house has dropped about 20% in the past week on concern the global art market may be slowing, Bloomberg News reported. Sotheby's (NYSE: BID) shares declined 39 cents to $22.64 in Friday afternoon trading.

Sotheby's contemporary art auction on Wednesday was not a confidence builder. The sale totaled $10.4 million, well below the $14 million high estimate, will only 69% of lots selling, Bloomberg News reported. In comparison, during a similar sale a year ago, 81% of lots were purchased.

Monday, May 5

• Happy Cinco de Mayo!
• Day one of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Management Advisory Committees meeting: Purdue Pharma's NDA for Oxycontin.
  
• Anadarko Petroleum (NYSE:APC) to report Q1 earnings; conference call Tuesday at 10:00am.

Tuesday, May 6

• Day two of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Mgmt Advisory Committees meeting: Cephalon's (NASDAQ:CEPH) sNDA for Fentora.
• Molson Coors (NYSE:TAP) to report Q1 earnings; conference call at 12:00pm.
• Walt Disney Company (NYSE:DIS) to report Q2 earnings; conference call at 4:30pm.

Wednesday, May 7

• Marsh & McLennan (NYSE:MMC) to report Q1 earnings; conference call at 8:30am.
• Transocean (NYSE:RIG) to report Q1 earnings; conference call at 10:00am.
• Hot Topic (NASDAQ:HOTT) and Zumiez (NASDAQ:ZUMZ) to report April sales at 4:00pm.

Thursday, May 8

• Wal-Mart (NYSE:WMT) to report April sales at 8:00am. Abercrombie & Fitch (NYSE:ANF) to report sales at 8:15am. Target (NYSE:TGT) to report sales at 8:30am.
  
• NVidia (NADAQ:NVDA) to report Q1 earnings; conference call at 5:00pm.

Friday, May 9

• PDUFA date for Adolor Corp (NYSE:ADLR) and GlaxoSmithKline's (NYSE:GSK) Entereg for management of Post-operative Ileus.
• American International Group (NYSE:AIG) to report Q1 earnings; conference call at 8:30am.
• Sotheby's (NYSE:BID) to report Q1 earnings; conference call at 9:00am.

The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is Sotheby's.

Sotheby's (NYSE: BID) is the world's second-largest auctioneer of fine arts, antiques and collectibles, offering property in numerous collecting categories, including paintings, jewelry, decorative arts, and books.

Analysts expect Sotheby's to register strong revenue growth in 2008, with an improving financial position, and modest debt. Furthermore, costs remain reasonable. The Reuters F2008/F2009 EPS consensus estimates for the company are $2.82/$3.14.

MOST NOTEWORTHY: The Restaurant Sector, Blockbuster and Plexus were today's noteworthy upgrades:

• Bear Stearns upgraded the Restaurant Sector to Market Weight from Underweight citing better investor sentiment following Fed rate cuts and the economic stimulus plan; upgraded shares include Brinker International (NYSE: EAT), Cheesecake Factory (NASDAQ: CAKE) and Darden Restaurants (NYSE: DRI).
  
• JP Morgan upgraded shares of Blockbuster (NYSE: BBI) to Overweight from Neutral ahead of the company's Q4 results on March 6, as they believe the quarter will be at least in-line and 2008 guidance will be above Street expectations.
  
• Plexus (NASDAQ: PLXS) was raised to Outperform from Neutral at Credit Suisse as they believe current quarter sales and bookings are tracking ahead.

OTHER UPGRADES:

• Maxwell Technologies (NASDAQ: MXWL) was upgraded to Market Perform from Market Underperform at JMP Securities.
  
• The firm also raised Sotheby's (NYSE: BID) to Market Outperform from Market Perform.
  
• Goldman Sachs added Allianz AG (NYSE: AZ) to its Conviction Buy List.

The Tales of Beedle the Bard, a book of fairy tales created, hand-written and illustrated by Harry Potter author J.K. Rowling, sold for nearly $4 million at a Sotheby's (NYSE: BID) auction on Thursday.

The book is one of seven copies Rowling made, and she gave the other six away to people involved with the Harry Potter collection. The book had only been expected to fetch about $100,000, but soared far beyond that and was eventually sold to a London art agent for $4 million.

The proceeds will benefit The Children's Voice, which campaigns for rights of children who grow up in institutions, particularly in Eastern Europe. To learn more about the charity, or perhaps make it part of your holiday giving plan, visit its website.

It's impressive to see that the first thing that Rowling released upon the completion of the Harry Potter series was not another book to cash in on her name. In fact, Rowling, who is already a billionaire, won't be making any money from this book.

J.K. Rowling has conducted herself with unbelievable class, and her good works and wariness of diving right into another book should only help build anticipation for her next project.

Harry Potter fans looking for a peak of what the book consists of should head over to Amazon.com, which has a terrific series of photos and a video about the book. More photos and reviews of the stories will be uploaded.

Here are some highlights of this past week's earnings coverage from BloggingStocks:

• Agilent Technologies Inc. (NYSE: A) beat expectations in both earnings and revenues.
• Bob Evans Farms Inc. (NASDAQ: BOBE) beat estimates despite rising labor and commodities costs.
• Cimatron Ltd. (NASDAQ: CIMT) reported record revenues and improved profits.
• FedEx Corp. (NYSE: FDX) cut its outlook, leading the share price to a 52-week low.
• Fossil Inc. (NASDAQ: FOSL) had a strong quarter due to international sales and cost cutting.
• Home Depot Inc. (NYSE: HD) profits declined due to the housing slowdown.
• JCPenney Co. (NYSE: JCP) beat low expectations despite it first profit decline in three quarters.
• PepsiCo Inc. (NYSE: PEP), reaffirmed its full-year forecast after the recent restructuring announcement.
• Sotheby's (NYSE: BID) narrowed its losses, due largely to higher auction and private sale commissions.
• Starbucks Corp. (NASDAQ: SBUX) met expectations but lowered its guidance.
• Tandy Brands Accessories Inc. (NASDAQ: TBAC) posted losses due to overreliance on a single customer.
• TJX Cos. (NYSE: TJX) fell short of expectations but offered sunny full-year guidance.
• Tyco International Ltd. (NYSE: TYC) beat expectations and offered "cautiously optimistic" outlook.
• Wal-Mart Stores Inc. (NYSE: WMT) beat estimates on improved U.S. performance and international growth.

Jim Cramer offers three tests for financial stocks. Zac Bissonnette examines the relationship between earnings and the number of press releases generated by a company.

Upcoming results to watch for include: Hewlett-Packard Co. (NYSE: HPQ), Target Corp. (NYSE: TGT), Whole Foods Market (NASDAQ: WFMI), Abercrombie & Fitch Co. (NYSE: ANF), Gap Inc. (NYSE: GPS), and Deere & Co. (NYSE: DE).

Visit AOL Money & Finance for more earnings coverage.

Following a disappointing auction, Sotheby's (NYSE: BID) lost over a third of its value in trading last week. Despite the downfall, Richard Moroney sees an opportunity to "bid" on the shares of the art auction firm.

The editor of Dow Theory Forecasts explains, "Sotheby's plunged in price after disappointing results for a major art auction triggered several brokerage downgrades. Following the drop, the company posted better-than-expected sales for the September quarter.

"However, because of losses on guarantees that Sotheby's provided to sellers in the disappointing auction, earnings were slightly worse than consensus estimates. For the quarter, the company lost $0.33 per share, an improvement from the per-share loss of $0.49 in the year-earlier period.

"Because of the seasonal nature of the art business, Sotheby's typically loses money in the September quarter. The company says it remains optimistic on the outlook for the art market for the remainder of 2007, and it seems Wall Street has overreacted to a single disappointing auction.

"While worries regarding the guarantees that Sotheby's provides and the general health of the art market could keep the stock under pressure in the near term, we view the sell-off as a buying opportunity.

"Trading at 12 times expected 2007 earnings, the stock seems undervalued considering the company's track record and outlook. Sotheby's remains a Best Buy."

Each day, Steven Halpern's TheStockAdvisors.com website features the latest investment commentary and favorite stock picks of the nation's leading financial newsletter advisors.

Sotheby's (NYSE: BID) reported operating revenues of $85.1 million for the third quarter on Friday, a 48% increase from the prior period. Operating losses fell to $20.9 million, a 31% improvement. The Q3 gains were primarily the result of higher auction commission revenues and private sales commissions. However, the stock fell on Friday due to worries about recent losses on underperforming auctions. Today, the stock is rebounding strongly as investors had time to digest the overall rosy picture printed in the earnings release. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BID.

After hitting a one-year high of $61.40 in October, the stock has fallen considerably this month. BID opened this morning at $34.25. So far today the stock has hit a low of $33.76 and a high of $34.81. As of 11:10, BID is trading at $34.68, up $1.93 (5.9%). The chart for BID looks neutral and deteriorating.

Sotheby's (NYSE: BID), an auctioneer of authentic fine arts and collectibles, is recently down $14.62 to $35.50. Bank of America says, "reducing to Neutral on possible slowdown, heighten risk. Tepid results for major sale suggests cloudier macro outlook for the art market." BID call option volume of 4,735 contracts compares to put volume of 7,837 contracts. BID November 34 straddle is priced at $5.75. BID December option implied volatility of 84 is above its 26-week average of 49 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

First Solar (NASDAQ: FSLR) moving up 30% on strong earnings. Rio Tinto (NYSE: RTP) up 28% on takeover bid from BHP Billiton (NYSE: BHP). Also moving up NetSol Tech (NASDAQ: NTWK) spiking 19% on earnings news.

Moving down by 13%, Sotheby's (NYSE: BID) on failure to sell Van Gogh. And Cisco Systems (NASDAQ: CSCO) falling 7% on weak guidance.

Stocks may not open the same as their pre-market indications.

Douglas A. McIntyre is an editor at 247wallst.com.

MAJOR PAPERS:

• Troubled Sprint Nextel Corporation (NYSE: S) is searching for a replacement for CEO Gary Forsee, and expects to have a new person in place by December, reported the Wall Street Journal.
• Two Bear Stearns Companies (NYSE: BSC) collapsed mortgage related hedge funds, that lost $1.6B, have drawn an investigation from the U.S. attorney in Brooklyn, NY, reported the Wall Street Journal.
• The Financial Times reported that the U.K. economy will be affected by the global credit crisis, according to Chancellor of the exchequer Alistair Darling, who said that while the U.K. economy is in a strong position to ride out the impact, growth projections will be lowered from the current 2.5%-3%.

OTHER PAPERS:

• From BusinessWeek's "Inside Wall Street" section:
  
• Sotheby's (NYSE: BID) has benefited from Wall Street's equity market gains, with high-end investors piling money into art, and Rommel Dionisio of Wedbush Morgan Securities sees the stock going to $60 in a year.
• Amid concern that it might miss the Street's Q3 forecast, is Polycom (NYSE: PLCM) oversold at $26? Yes, says Greg MacArthur, president of investment outfit Viewpoint2000.
• Stereotaxis (NASDAQ: STXS) makes a computerized magnetically controlled navigation system that guides devices used in minimally invasive cardiac arrhythmia surgery, and Standard & Poor's rates the stock a Buy, in part because of its order backlog of $55 million.

Launched on July 30th, Claymore/Robb Report Global Luxury (NYSE: ROB) is an exchange-traded fund that, according to Paul Trach, targets the upper crust of the consumer discretionary sector.

The editor of The ETF Authority notes that the fund is designed to track the performance of the world's premium luxury companies, with a portfolio that looks like a who's who of luxury brands.

The specialty index tracked by the fund, he notes, was constructed by Robb Media, which manages a number of publications aimed at the ultra-affluent. Tracy says, "Robb has its finger on the pulse of the world's wealthiest individuals."

He explains, "The portfolio contains about 40 holdings that read like a who's who of upscale brand names: Coach (NYSE: COH), Polo Ralph Lauren (NYSE: PL), Saks (NYSE: SKS), Sotheby's (NYSE: BID), Tiffany (NYSE: TIF), and Wynn Resorts (NYSE: WYNN), among others.

And with stakes in countries like France, Switzerland, Italy, and Germany and holdings in such companies as Hermes, Porsche, and Harry Winston, he notes, "ROB offers global exposure to some of the world's most iconic companies."

According to The Wall Street Journal, industry observers are predicting that the recent explosive growth in the art market could be reversing.

The Journal reports: "The sheer volume of works planned for sale is fueling the nervous buzz. Christie's has estimated the works it will have on the block at its major London sales in October at $154 million -- compared with the $83 million it made at those sales last year and $33 million in 2005. Sotheby's is selling 387 works at its London auctions next month, compared with 254 last year and 206 the year before."

Subprime woes and reduced Wall Street bonuses may have reverberations in the art market. Last week I wrote that hedge fund honchos are getting cheap -- no longer shelling out for the pricey real estate like they once did.

It looks like the art market could get very weak. The combination of hedge fund/private equity bosses becoming suddenly tight-fisted, and the potential for a supply glut could spell trouble.

But so far, the stock market doesn't appear to be worried. Shares of Sotheby's (NYSE: BID) are pretty close to an all-time high, but have exhibited great volatility during past periods of economic weakness. After reaching into the $40s in 1999, shares of the auctioneer sank into the single digits in 2002, perhaps aided by a price-fixing scandal.