The market review for February 3

Tuesday, 2 February, the U.S. stock market continued the growth begun the previous day. On the side of buyers were as positive corporate news and optimistic macroeconomic statistics. Change the value of the index of pending transactions involving the sale of homes in December 2009. surpassed analysts’ expectations – the increase was 1% against the projected 0.6%. In addition, U.S. Treasury Secretary Timothy Geithner urged the Republicans to join the action to reduce the budget deficit of the country. He believes that these measures can be started when the recovery will not cause doubts, but the economy will be on his feet. The administration of U.S. President Barack Obama supports the creation of a bipartisan financial commission which would deal with finding solutions to the problem. Republicans, however, until recently, rejected the idea. Be that as it may, macroeconomic statistics out strong, most of the corporate profit exceeds expectations, and if the budget deficit and the country will eventually decline, then the highs of 2007. for the U.S. stock market may not be the last in history.

As a result of trading on February 2 2010. Dow Jones index rose by 111.32 points (1.09%) – to 10,296.85 points, NASDAQ rose 18.86 points (0.87%) – to 2,190.06 points, S & P rose 14.13 points to (+1.3%) – amounting to 1,103.31 points.

Another indication of possible improvement in the U.S. construction industry is the outcome of the second-largest builder in the country of DR Horton Inc. for I quarter 2009-2010 financial year. He managed to earn 56 cents a share, pleasantly surprised experts who expected to see a loss of 26 cents per share. As a result of DR Horton trades capitalization soared to 10.92%.

Significantly increased stock quotes, the book retailer Barnes & Noble Inc. (7.78%), while news that the owner of one of the largest stakes in the company of Ron Berkeley there plans to buy another 37% of its securities. At 17,63% shares soared in price women’s clothing retailer AnnTaylor Stores Corp. after the CEO Kay Krill, announced that its financial results for the IV quarter will be much better indicators of 2008. and surpass the expectations of analysts. Publication of the report of the company is scheduled for 12 March this year. Other industry representatives also were in demand: Costco Wholesale Corp. went up by 1,49%, The Home Depot Inc. – On 2,25%, Lowe’s Companies Inc. – On 2,68%. The last two networks specialize in tools for repair and building materials – obviously, here sunk the echoes of expectations of recovery in real estate.

Substantially above the market on Tuesday traded securities in the United States second-largest printer maker Lexmark International Inc. (+10.6%). Aggressive buying securities companies were summoned as a tripling of its net profit in the IV quarter of 2009. compared with the same period a year earlier, and promises to Lexmark to earn 80 cents per share, in the I quarter of this year (analysts also expect earnings per share of 62 cents).

Another leader of growth was the largest in America, a manufacturer of diesel engines and generators Cummins Inc. Net income for the IV quarter of 2009. almost twice exceeded the expectations of experts, amounting to $ 1.36 per share, against the forecast level of $ 0.78 in 2010. manufacturer expects sales of $ 11 billion, higher than analysts’ estimates (10.2 billion dollars). The market was encouraged by news, quotes Cummins rose 8,84%.

The market leader in logistics services United Parcel Service Inc. (UPS) tripled its net profit for the IV quarter of 2009. for a similar indicator for 2008., losing 2.5% of revenue. In the company’s strong results are attributed to an increase in traffic due to the holiday season and reduced costs. Regarding forecasts for 2010., The most difficult, according to representatives of UPS, will I quarter, but up to this year, the company plans to earn a minimum of $ 2.7 per share, which corresponds to market expectations. At the end of the trading session on February 2 UPS securities rose in price by 0,39%, its rival FedEx Corp. – On 2,06%.

With higher prices for industrial metals stocks were in demand and steel companies. The highest growth in the sector have demonstrated Paper Alcoa Inc., Went up by 2.32%. CEO Klaus Kleinfeld said that the manufacturer has completed the bulk of the reductions in staff and is now beginning to switch to growth. According to him, the terms of reference of the aluminum business are now much better than they were a year ago. At 1.29% increased in price action Freeport-McMoRan Copper & Gold Inc. after analysts Citigroup have raised recommendations on them to “hold” to “buy”. AK Steel Holding Corp. became more expensive to 1,16%, Southern Copper Corp. – On 2,98%.

In the oil and gas sector dominated by positive sentiment: paper Exxon Mobil Corp. increased in value at 1,18%, Chevron Corp. – On 1,18%, ConocoPhillips – on 2,2%, Occidental Petroleum Corp. – On 1,19%, oilfield services company Schlumberger Ltd. – On 2,05%.

Amid calls for Former Fed Chairman Paul Volcker to prohibit large commercial banks to high risk transaction, to make the financial system more stable, representatives of the banking industry have shown Feb. 2 differently directed changes in the dynamics of quotations. Increases in the prices Citigroup Inc. (+2,1%), Goldman Sachs Group Inc. (+2,49%), JPMorgan Chase & Co. (2.32%) and Bank of America Corp. (1.17%). Cheaper Wells Fargo & Co (-0,48%), US Bancorp (-1,23%), The Bank of New York Mellon Corp. (-1.08%) And PNC Financial Services Group Inc. (-2.17%). Representatives of the Bank of New York, by the way, said Tuesday the purchase of a financial services company PNC Global Investment Servicing for U.S. $ 2.31 billion

Corporate reporting companies is increasingly happy market participants. To date, reported back about half of the enterprises included in the calculation of the S & P 500. If the emerging trend continues, the U.S. market will be able to continue its recent growth. “Cooled” in recent weeks, the fall quotes do allow.

Acme Packet Inc. (APKT:US) surged 9.7 percent to $11.70. The maker of devices to transmit phone calls and video forecast 2010 profit excluding some items of at least 44 cents a share. On average, the analysts surveyed by Bloomberg estimated earnings of 42 cents.

Alliance Data Systems Corp. (ADS:US) declined 4 percent to $59. The credit-card processor forecast 2010 earnings excluding some items of $6 a share, missing the average analyst estimate in a Bloomberg survey of $6.15.

BPZ Resources Inc. (BPZ:US) dropped 6.3 percent to $5.85. The U.S. oil producer plans to offer $140 million of convertible notes due 2015.

C.H. Robinson Worldwide Inc. (CHRW:US) slumped 9.4 percent to $52. The arranger of freight shipments reported fourth- quarter earnings excluding some items of 52 cents a share, missing the average analyst estimate in a Bloomberg survey by 7 percent.

Fiserv Inc. (FISV:US) added 2.3 percent to $47.45. The manager of check-processing and cash machines forecast 2010 profit excluding some items of $3.96 to $4.07. Analysts on average estimate the company will earn $4.05 a share.

GT Solar International Inc. (SOLR:US) jumped 11 percent to $6.65. The supplier of equipment to solar-cell manufacturers forecast 2010 profit excluding some items of at least 52 cents a share. On average, the analysts surveyed by Bloomberg estimated earnings of 49 cents.

International Rectifier Corp. (IRF:US) rose 5.4 percent to $21. The El Segundo, California-based semiconductor manufacturer forecast third-quarter sales of at least $225 million. The average analyst surveyed by Bloomberg estimated revenue of $201.8 million.

JDS Uniphase Corp. (JDSU:US) gained 3.3 percent to $8.65. The maker of phone equipment posted second-quarter profit of 12 cents a share, excluding some items. Analysts projected a profit of 9 cents, the average of estimates compiled by Bloomberg. JDS also forecast third-quarter sales of at least $325 million. The analysts surveyed by Bloomberg estimated revenues of $322.7 million.

MetLife Inc. (MET:US) lost 3 percent to $35.26. The biggest U.S. life insurer said it is in talks to purchase a unit from American International Group Inc. to expand in 50 countries after posting its first profit in a year. Excluding some investment results, MetLife earned 96 cents a share, beating the 95 cent average estimate of 18 analysts surveyed by Bloomberg.

Myriad Genetics Inc. (MYGN:US) advanced 6.3 percent to $25.50. The maker of a test for detecting inherited breast cancer reported second-quarter profit excluding some items of 36 cents a share, beating the average analyst estimate in a Bloomberg survey by 5.3 percent.

Navios Maritime Partners LP (NMM:US) slid 5.9 percent to $15.43. The provider of maritime freight transportation plans to offer 3.5 million common units.

NetLogic Microsystems Inc. (NETL:US) climbed 9.2 percent to $47.31. The developer of semiconductors reported fourth-quarter earnings excluding some items of 44 cents a share, beating the average analyst estimate by 4.5 percent.

News Corp. (NWSA:US) surged 7.1 percent to $13.67. The media company that owns the Twentieth Century Fox film studio and the Wall Street Journal reported second-quarter profit that beat analysts’ estimates and raised its 2010 earnings forecast after “Avatar” broke box-office records and advertising sales increased.

PNC Financial Services Group Inc. (PNC:US) lost 1.2 percent to $54. The fifth-ranked bank by deposits in the U.S will repay $7.6 billion of federal bailout funds. PNC said it expects to finance the deal by selling $3 billion of common stock, $1.5 billion to $2 billion of senior notes, and the bank’s investment servicing unit.

Tesoro Corp. (TSO:US) declined 5.2 percent to $12.30. The U.S. petroleum refiner reported fourth-quarter loss excluding some items of 99 cents, wider than the average analyst estimate in a Bloomberg survey of a loss of 83 cents. Tesoro also said it will suspend its quarterly dividend for the “foreseeable future” to preserve cash and keep a “healthy” balance sheet.

VeriSign Inc. (VRSN:US) dropped 5.2 percent to $22.20. The operator of computers that direct Internet traffic reported fourth-quarter profit excluding some items of 31 cents a share, missing the average analyst estimate in a Bloomberg survey by 10 percent.

Key earnings/guidance since yesterday’s close:
-Pfizer (PFE) missed by a penny, ex items, in Q4 despite better-than-expected revenue of $16.5 bln (First Call consensus $15.9 bln). For 2010 guidance, the company provided downside EPS expectations — $2.10-$2.20 vs. $2.27 consensus — but in line revenue expectations — $67-$69 bln vs. $67.5 bln consensus. It also provided specific 2012 financial targets, seeing revenue of $66.0-$68.5 bln and EPS of $2.25-$2.35. Shares of PFE are indicated nearly 2% lower premarket.
-Honda Motor (HMC), currently embroiled in a recall scandal along with peer Toyota Motor (TM), reported fiscal Q3 EPS of $0.81, $0.14 better than the single-analyst estimate of $0.67, and revenue of $24.3 bln, better than the single-analyst estimate of $23.7 bln. The company also increased its FY10 guidance, raising net sales expectations to 8.53 bln yen from 8.45 bln yen, operating income to 320 bln yen from 190 bln yen and net income attributable to the company to 265 bln yen from 155 bln yen. Shares of HMC are indicated nearly 2% higher premarket.

Technical Perspective: Technology dominated the NASDAQ Comp yesterday, which has lagged on the recent bounce and over the last four weeks, and still has another 1.2% to reach its 50-day ema. But the S&P 500 came within two points of reaching a similar level (50-day ema at 1107, 50-day sma at 1113). A hold near 1099/1098 and 1095 in the early going today would do no short term damage. However, given the already substantial gains this week and with the employment data looming Friday, we would be watching for signs of a possible breather on a move back toward the 50-day averages.

Key economic data:
-January ADP Employment change at 8:15 a.m. ET (consensus -30,000; prior -84,000)
-January ISM Services Index at 10:00 a.m. ET (consensus 51.0; prior 50.1)

Federal Reserve/Treasury:
-Secretary Geithner testifies for a second day on President Obama’s FY11 budget, this time before the House Ways and Means Committee at 10:00 a.m. ET
-Governor Warsh speaks at 1:00 p.m. ET (Note: Mr. Warsh wrote an opinion piece in the Financial Times, saying “eradicating the too-big-to-fail problem should be the main policy goal.”)

Key Note/Bond auction results:

-65 companies are confirmed to report today after the close, including Cisco Systems (CSCO) and Visa (V)

Key industry conferences:
-Credit Suisse Energy Summit (Day 3 of 5) — Companies presenting: FTI, RIG, APC, HAL, WES, EXH, CAM, EXC, KEG, ESV, OKE, BHI, CRZO
-Morgan Stanley U.S. Financials Conference — Companies presenting: BK, CMA, PMT, BMO, NYB, TCBI, BNS, GHL, WBS, HOMB, PVTB, TD, MI, WDR, CFR, RY

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