S&P Lowers Gannett Rating to Junk Shares of Gannett ( GCI) were down nearly 20% in early trading after Standard & Poor's cut the newspaper company's corporate credit rating to junk status. S&P maintains the lowered rating is resulting from a worsening pace of expected decline in advertising spending in both Gannett's newspaper publishing and broadcasting businesses, which is due to deteriorating levels of economic activity in the U.S. and the U.K. The company just recently cut its quarterly dividend payout by 90% to 4 cents per share. We have avoided shares of Gannett since our early June coverage began, when shares were trading at $27.75. The company has a dividend yield of 5.48%, based on last night's closing stock price of $2.92. We would look elsewhere for a better investment opportunity. Gannett is not recommended at this time, holding a Dividend.com rating of 2.5 out of 5 stars. Online Education Firms on the Move Shares of online education firms were on the move this morning after a Morgan Stanley call on the sector. Shares of ITT Educational Services ( ESI) were up 2% in early trading after Morgan Stanley raised the stock to an overweight from equal-weight, citing an attractive valuation. The stock has technical support at the $90 level. If today's rally can pick up steam, we see overhead resistance around the $118 to $120 levels. Shares of Career Education ( CECO) were down 3% in early trading, after Morgan Stanley downgraded it to an underweight from equal-weight rating, citing the stock's recent run-up. The stock has technical support around the $12 to $14 price area. If the stock can resume its previous rebound, we see overhead resistance around the $27 level.
Shares of Strayer Education ( STRA) are basically flat so far today after Morgan Stanley bumped up its rating to equal-weight from underweight, citing a more attractive valuation and a catalyst from campus expansions. The stock has technical support in the $156 to $166 price area. If the stock can rebuild some momentum, we see initial overhead resistance at the $195 levels. The online education space has become a battleground for bulls and bears, as bulls argue growth, and bears argue rich valuations. The names above are likely better for investors who are nimble and have short-term time horizons. AutoZone Shares Jump as Second-Quarter Sales, Short-Sellers Scramble Shares of auto parts retailer AutoZone ( AZO) were up more than 8% in early trading Tuesday, on the heels of a fiscal second-quarter earnings report that easily beat expectations. The Memphis-based company said it earned $115.9 million, or $2.03 per share, in the fiscal second quarter, up from $106.7 million, or $1.67 per share, in the year-ago period. Overall net sales rose 8.1% from year-ago levels to $1.45 billion. On average, Wall Street analysts expected adjusted earnings of $1.85 per share on revenue of $1.38 billion. The company said that U.S. same-store sales, considered a key indicator of a retailer's health, rose 6% from the year-ago period. AutoZone has benefited from a new car sales meltdown, as cost-conscious consumers put off new vehicle purchases in favor of fixing up their old cars. Shares of AutoZone are now hitting all-time highs. We have talked about this company before; it is a stock that has quite a few times burned short-sellers trying to short. Shorts would be better off waiting for technical resistance to weaken. Those levels are at the $121 to $127 area and also the $111 mark as well.
In the meantime, we do not currently rate this non-dividend paying stock, but we do follow this leading auto-parts retailing name closely. AutoZone does not currently pay a dividend. Qualcomm Boosts Dividend Payout 6% Shares of Qualcomm ( QCOM) were up slightly in early trading, after the wireless technology giant announced its Board of Directors has approved a 6% increase in the company's quarterly cash dividend. The dividend will increase from 16 cents to 17 cents per share of common stock and will be effective for quarterly dividends payable after March 27. This dividend increase raises the annual dividend to 68 cents per share of common stock. We had removed shares of Qualcomm from our "Recommended" list back on Sept. 25, when the stock traded at $46.54. The company will know have a dividend yield of 1.95%, based on the higher dividend payout and last night's closing stock price of $32.79. The stock has technical support in the $26 to $28 area. If the stock fails to hold there, we could possibly see the $20 to $22 zone come into play. If the shares can firm up, we see overhead resistance around the $42 level. We would remain on the sidelines for now. Qualcomm is not recommended at this time, holding a Dividend.com rating of 3.1 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system.