Dow Jones 30: Industrials Index

[setravis]

Tuesday, January 18, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading up +1.60 points and posted a frech contract high in overnight trade. The US stock market last Friday shook off early weakness on China's decision to raise bank reserve requirements and finished on its high after JPMorgan Chase reported record profits: Dow +0.47%, S&P 500 -0.17%, Nasdaq Composite -0.07%. The Nasdaq posted a 9-3/4 year high and the Dow and S&P 500 posted 2-1/3 year highs.

               Bullish factors for stocks included (1) the larger-than-expected increase in Dec industrial production which posted its biggest gain in 5 months (+0.8% versus expectations of +0.5%), (2) the larger-than-expected jump in Dec capacity utilization which rose to its highest level in 2-1/3 years (+0.6 to 76.0 versus expectations of +0.4 to 75.6%), (3) strength in semiconductor-companies after Intel, the world's biggest chipmaker, said it would boost spending on plants and equipment this year, and (4) a rally in financial stocks after JPMor gan Chase, the second-largest US bank by assets, posted a record $4.83 billion profit for Q4, helped by $2 billion in reserve reductions as credit quality and the US economy improved.


   Bearish factors included (1) carry-over weakness from a plunge in European and Asian stock markets after China raised banks reserve requirements for the fourth time in 2 months, which may slow its economy and the global economy as well, (2) the weaker-than-expected Dec US retail sales (+0.6% and +0.5% less autos versus expectations of +0.8% and +0.7% less autos, (3) the unexpected decline in the Jan US University of Michigan consumer confidence (-1.8 to 72.7 versus expectations of +1.0 to 75.5), and (4) concern that the European sovereign-debt crisis may worsen after Fitch Ratings cut Greece's long-term foreign and local currency issuer default ratings to BB+, or junk, from BBB- with a negative outlook.


•   Apple (APPL) slipped 4.5% in pre-market trading after the company reported that CEO Steve Jobs will take a leave of absence to focus on his health, leaving Tim Cook in charge for the third time in 7 years.

[setravis]

Wednesday, January 19, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading down -1.40 points. The US stock market yesterday gyrated on both sides of unchanged into early afternoon when it rallied into the close as weakness in the technology sector was offset by strength in European markets on optimism that EU leaders will increase efforts to stem the debt crisis: Dow +0.43%, S&P 500 +0.14%, Nasdaq Composite +0.38%. The Dow and S&P 500 both posted 2-1/3 year highs and the Nasdaq posted a 9-3/4 year high.

                Bullish factors for stocks included (1) carry-over support from a rally in European stocks on speculation EU leaders will increase efforts to stem the sovereign-debt crisis, (2) strength in energy and raw-material producers after a slide in the dollar index to a 1-3/4 month low prompted a broad-based rally in commodities, and (3) strong foreign demand for US dollar assets after the Nov long-term TIC flows increased by $85.1 billion, much larger than expectations of $40.0 billion.

   Bearish factors included (1) the slide in homebuilders on concern the housing crisis may linger after the unexpected stagnation in the Jan NAHB housing market index (unchanged at 16 versus expectations of +1 to 17), (2) weakness in technology stocks after Apple fell on leadership concerns when the company reported that CEO Steve Jobs will take a leave of absence to focus on his health, and (3) the warning from the IEA that the current price of oil is "alarming" and may endanger the recovery in the global economy.


•   Apple (AAPL) rose 1.9% in pre-market trading after it reported late yesterday Q1 profit of $6.43 a share, easily surpassing analysts' estimates of $5.41 a share.


•   International Business Machines (IBM) rose 2.4% in pre-market trading after it reported Q4 profit of $4.18 a share, topping analysts' estimates of $4.08 a share.

[setravis]

Thursday, January 20, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading down -1.00 point. The US stock market yesterday sold-off steadily the entire day on the back of weak US housing starts and disappointing earnings results from Goldman Sachs: Dow -0.11%, S&P 500 -1.01%, Nasdaq Composite -1.46%.

                Bearish factors for stocks included (1) a slide in homebuilders after Dec US housing starts fell more-than-expected and matched a 20-month low (-4.3% to 529,000 versus expectations of -0.9% to 550,000), which questions the sustainability of the economic recovery, (2) weakness in financial stocks after Goldman Sachs slumped when it reported earnings dropped 52% and fell for the third straight quarter on lower revenue from trading and investment banking, and (3) profit taking and long liquidation as the S&P 500 has rallied for the last 7 weeks up to a 2-1/3 year high.

   Bullish factors included (1) the larger-than-expected increase in Dec building permits which rose to their best level in 9 months and predicate future housing construction (+16.7% to 635,000 versus expectations of +2.0% to 555,000), (2) reduced European sovereign-debt concerns after Portugal successfully auctioned 750 billion euros of bills, which signals Europe's high-deficit countries can still finance their debt, and (3) earnings optimism as 17 of the 24 companies in the S&P 500 that have reported quarterly earnings since Jan 10 have beaten analysts' estimates.


•   EBay (EBAY) gained 2.1% in pre-,arket trading after the company said 2011 sales will be as high as $10.6 billion, compared with analysts' estimates of $10.2 billion.


•   Morgan Stanley (MS) slid 2.7% in pre-market trading ahead of the release of its quarterly earnings later this morning.

[setravis]

Friday, January 21, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading up +4.50 points as German business confidence climbs to an all-time high. The US stock market yesterday closed slightly lower on concern China will raise interest rates and hamper global economic growth: Dow -0.02%, S&P 500 -0.13%, Nasdaq Composite -0.77%. The S&P 50 and the Nasdaq fell to 1-week lows.

                Bearish factors for stocks included (1) carry-over weakness from a slide in Asian and European stock markets on concern that stronger-than-expected growth in China (China Q4 GDP 9.8% q/q versus expectations of 9.4% q/q), will lead to further Chinese interest rate hikes that may slow the global economy, (2) weakness in commodity producers which fell on concern demand for raw materials may slide if China keeps raising interest rates, and (3) long liquidation pressures after the S&P 500 had advanced for 7 straight weeks and is due for near-term consolidation.

   Bullish factors included (1) the larger-than-expected decline in weekly initial US unemployment claims (-37,000 to 404.000 versus expectations of -25,000 to 420,000), (2) a rally in homebuilders after the stronger-than-expected Dec existing home sales which rose to their best level in 7 months (+12.3% to 5.28 million versus expectations of +4.1% to 4.87 million), and (3) the bigger-than-expected increase in Dec leading indicators (+1.0% versus expectations of +0.6%).


•   General Electric (GE) climbed 2.7% in pre-market trading after the company late yesterday reported Q4 profit from continuing operations of 36 cents a share, beating analysts' estimates of 32 cents.


•   Google (GOOG) rose 1.6% in pre-market trading after the company late yesterday reported Q4 profit of $8.75 a share, well ahead of analysts' estimates of $8.08. Seperately, Google co-founder Larry Page was named CEO, replacing Eric Schmidt, who becomes executive chairman.

[setravis]

Monday, January 24, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading down slightly by -0.20 of a point. The US stock market last Friday finished mixed as strong quarterly earnings results and record high business confidence in Germany offset weakness in technology stocks: Dow +0.41%, S&P 500 +0.24%, Nasdaq Composite -0.55%. The Dow rose to a 2-1/2 year high and the Nasdaq slipped to a 2-week low.

                Bullish factors for stocks included (1) carry-over support from a rally in European stock markets after the Jan German IFO business climate rose to its highest level since records for a reunified Germany began in 1991, and (2) a strong quarterly earnings season thus far as 42 of the 57 S&P 500 companies that have reported results since Jan 10 have beaten analysts estimates.

   Bearish factors included (1) the prediction from the Center on Budget and Policy Priorities that US states face deficits in fiscal 2012 that may exceed $140 billion, which may hurt overall US economic growth, (2) weakness in technology stocks which dragged the Nasdaq lower, and (3) the warning from Fitch Ratings that there is a continuing risk that Euro-Zone nations will have their credit ratings downgraded until fiscal consolidation is secured and the economic recovery is broad-based.


•   Sara Lee (SLE) rose 3.7% in pre-market trading after the company received a takeover bid from Apollo Global Management LLC, Bain Capital LLC and TPG Capital that gets closer to the $20 a share that Sara Lee's board is seeking.


•   Nvidia (NVDA) climbed 2.6% in pre-market trading after an article in Barron's over the weekend said the stock may climb as much as 80% in the next year on the success of its Tegra processor in the tablet computer and smartphone markets.

[setravis]

Tuesday, January 25, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading down -4.40 points. The US stock market yesterday finished higher on increased M&A activity and overall economic optimism: Dow +0.92%, S&P 500 +0.58%, Nasdaq Composite +1.04%. The Dow rallied to a 2-1/2 year high.

                Bullish factors for stocks included (1) carry-over support from a rally in European stock markets after the Jan Euro-Zone PMI composite index unexpectedly expanded by its fastest pace in 6 months, (2) a survey from the NABE that showed the percentage of businesses expecting to increase payrolls in the next 6 months exceeded the share projecting more firings by 35 points, the most since the survey bean in 1998, (3) a rally in technology stocks after Intel gained when it said it will add $10 billion to its stock buyback plan, (4) a rally in paper and pulp producers after Rock-Tenn Co. agreed to buy Smurfit-Stone Container for $3.5 billion, and (5) strong overall M&A activity as Bloomberg data shows global M&A volume increased to $660.8 billion in Q4, the highest since Q3 2008.


   Bearish factors included (1) weakness in energy producers after crude oil fell when Saudi Arabia's Oil Minister signaled that OPEC may increase supply to meet rising demand, and (2) weakness in bond insurers after a proposal from Standard & Poor's to the way it grades bond insurers might prompt them to cut the ratings of existing bond insurers with investment-grade ratings by one or more rating grades unless the insurers raise capital or reduce risk.


•   Texas Instruments (TXN) fell 2.6% in European trading after the company late yesterday said that stockpiles of unsold chips had increased in Q4 and it reported that future orders had slipped.


•   American Express (AXP) lost 1.7% in European trading after the credit-card issuer reported a Q4 charge of $74 million, or 6 cents a share because of job cuts, and that excluding the charge, it would have earned 94 cents a share, below analysts' estimates of 96 cents.

[setravis]

Wednesday, January 26, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading up +5.50 points. The US stock market yesterday retreated after the UK economy unexpectedly shrank and several companies reported disappointing earnings but recouped most of its losses and settled mixed on speculation President Obama during his State of the Union speech on Tue night may announce plans to stimulate the economy: Dow -0.03%, S&P 500 +0.03%, Nasdaq Composite +0.06%. The Dow eked out another 2-1/2 year high.

                Bullish factors included (1) the larger-than-expected increase in Jan US consumer confidence which rose to its best level in 8 months (+7.3 to 60.6 versus expectations of +1.5 to 54.0), (2) the action by the IMF to raise their forecast for global economic growth this year to 4.4% from an Oct forecast of 4.2%, (3) the statement from the chairman of the US Council of Economic Advisers that President Obama would consider lowering corporate taxes as one of a variety of proposals intended to boost the economy, and (4) late-day short covering in stocks on speculation President Obama in his Tue night State of the Union Speech may announce additional stimulus measures and other plans to stimulate the economy.


   Bearish factors for stocks included (1) carry-over weakness in European stocks after Q4 UK GDP unexpectedly contracted -0.5% q/q, (2) concerns that US housing market weakness will continue to be a drag on the economy after Nov S&P/CaseShiller composite-20 home prices fell -1.6% y/y, the biggest annual decline in 11 months, (3) weaker-than-expected earnings results from American Express, Johnson & Johnson and 3M, (4) weakness in raw-material and energy producers as a strong dollar prompted widespread commodity declines, and (5) renewed European sovereign-debt concerns after Moody's Investors Service warned that Spain's banks may need as much as 89 billion euros in a stressed case scenario.


•   Keynote (KEYN) surged 19% in pre-market trading after the company late yesterday reported Q1 earnings of 32 cents a share, almost double analysts' estimates of 17 cents a share.


•   Juniper Networks (JNPR) climbed 2.6% in pre-market trading after the second-largest US maker of networking equipment said profitability will improve this year as sales growth from acquisitions and new produts outpaces increases in R&D costs.

[setravis]

Thursday, January 27, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading little changed, down -0.10 of a point. The US stock market yesterday finished higher on decent company earnings results, strong US new home sales and the Fed's action to maintain stimulus measures: Dow +0.07%, S&P 500 +0.42%, Nasdaq Composite +0.74%. The S&P 500 posted a 2-1/3 year high and the Dow posted a 2-1/2 year high.

                Bullish factors included (1) strength in homebuilders after Dec US new home sales rose more than expected to its best level in 8 months (+17.5% to 329,000 versus expectations of +3.5% to 300,000), (2) a strong earnings season thus far with 87 out of the 119 S&P 500 companies that have released quarterly results since Jan 10 reporting higher-than-estimated earnings, and (3) the action by the Fed to maintain its quantitative easing measures to stimulate economic growth.

   Bearish factors for stocks included (1) the -12.9% w/w decline in MBA weekly mortgage applications to their lowest level in 2 years, which suggests a recovery in the US housing market may be slow to develop, and (2) the post FOMC statement that said the economic expansion is "continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions."


•   Qualcomm (QCOM) jumped 6.7% in European trading after the company predicted that its revenue for the current period will be $3.45 billion to $3.75 billion, higher than analysts' estimates of $3.14 billion.


•   Starbucks (SBUX) slipped 2.7% in European trading after the company said it will generate Q2 net income of as much as 33 cents a share, below analysts' estimates of 35 cents.

[setravis]

January 28, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading unchanged. The US stock market yesterday fluctuated on both sides of unchanged but settled higher as pending home sales and strong company earnings results offset a jump in jobless claims: Dow +0.04%, S&P 500 +0.22%, Nasdaq Composite +0.58%. The S&P 500 posted a 2-1/3 year high and the Nasdaq rose to a 1-week high.

                Bullish factors included (1) a sign that the US housing market may be stabilizing after the stronger-than-expected Dec US pending home sales (+2.0% m/m versus expectations of +1.0% m/m), and (2) exceptional Q4 earnings results thus far as 109 of the 147 S&P 500 companies (74%) who reported quarterly earnings since Jan 10 have beaten analysts' estimates.

   Bearish factors for stocks included (1) the larger-than-expected increase in weekly US initial unemployment claims which rose to their highest level in 2-3/4 months (+51,000 to 454,000 versus expectations of +1,000 to 405,000), (2) the weaker-than-expected Dec durable goods orders (-2.5% and +0.5% ex transportations versus expectations of +1.5% and +0.9% ex transportation), and (3) concern that sovereign-debt risks are spreading globally after Standard & Poor's cut Japan's credit rating one step to AA-, saying the government lacks a "coherent strategy" to address a 943 trillion yen ($11 trillion) debt burden, the world's largest.


•   Amazon.com (AMZN) slumped 8.7% in European trading after the company said Q1 operating profit will be $260 million to $385 million with sales as low as $9.1 billion, weaker than analysts' estimates of operating profit of $474 million on sales of $9.36 billion, as it steps up spending on warehouses for products and data centers to support its Web Services unit.


•   Verizon Communications (VZ) slid 1% in pre-market trading after the second-largest US phone company agreed to buy Terremark Worldwide for $19 a share in cash, or a total value of about $1.4 billion.

[setravis]

History suggests time is right to buy Dow stocks
It's not too late to profit from rally as market's cycle shifts in favor of blue-chip stocks

NEW YORK (AP) -- Are you too late to the rally?

One of the fastest bull markets in history pushed the Dow Jones industrial average to a close near 12,000 last week, the highest point for the index of 30 blue chip stocks in two and a half years. The broader Standard and Poor's 500 index, the benchmark for most mutual funds, flirted with similar highs. An investor who bought an S&P 500 index fund at its March 2009 low has doubled his money since then, assuming dividends were reinvested.

But lost in the attention focused on Dow 12,000 is the fact that it has lagged every other U.S. market index over the past 12 months. Large companies have only recently started to take the lead. That suggests that the bull market could push ahead despite the Dow's 1.4 percent drop on Friday when concerns about political turmoil in Egypt and a couple of disappointing earnings reports gave investors reason to sell.

Markets tend to move in cycles. Riskier smaller companies often fall hardest during a recession and perform the best coming out of one. Larger companies, which often hold more of their value during downturns, tend to perform better after a recovery turns into an economic expansion. After the tech bubble popped, for instance, small companies performed better than the Dow index every year from 2003 to 2006. Dow stocks performed better from 2006 to the start of the financial crisis in 2008.

That cycle is under way again. The Russell 2000, which tracks the performance of smaller companies, returned 27 percent after dividends each of the last two years. The Dow gained 22.6 percent after dividends in 2009 and 14 percent in 2010. So far this year, however, the Dow has gained 2.4 percent, while the Russell index has dropped 1.1 percent.

"We're getting closer to the cross-over point in the bull market," says Doug Godine, managing director at Signal Hill, an investment bank.

Dow stocks range from Caterpillar to Coca Cola and Merck to Microsoft. The index is meant to mirror the overall economy, which is improving. The Commerce Department said Friday that the gross domestic product, the broadest measure of the economy, grew at an annual rate of 3.2 percent from October to December. Economists expect consumer spending to double in 2011 from last year's rate. And businesses are starting to spend more money on computers, energy and basic products.

Dow components International Business Machines and Hewlett-Packard have jumped more than 8 percent since the start of the year. Another Dow member, General Electric, closed above $20 a share Monday, the first time since October 2008. The company said the previous Friday that fourth-quarter profit jumped 52 percent thanks to big gains from its GE Capital and energy infrastructure divisions.

The other reason Dow stocks are doing well lately: They're cheap by recent historical standards. The index's trailing price to earnings ratio, a measure that shows investors how much they are paying for a dollar in earnings, is 14.7, well below the 18.1 it has averaged since 2003. The price to earnings ratio for the S&P 500 index of large companies, meanwhile, is 17.3.

"Big stocks are still playing catch-up," says Bob Doll, chief market strategist at BlackRock, a firm that manages $3.45 trillion in assets. "As they go higher, investors are going to say 'Stocks are going up, so I better buy some more of them.'"

[setravis]

Monday, January 31, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading up +1.60 points. The US stock market last Friday opened higher but then trended lower the rest of the day and closed sharply lower on geo-political concerns after civil unrest in Egypt intensified: Dow -1.39%, S&P 500 -1.79%, Nasdaq Composite -2.48%. The S&P 500 posted a 2-1/3 year high but erased its gains and closed lower as both the S&P and the Dow fell to 1-week lows, while the Nasdaq slid to a 3-week low.

                Bearish factors included (1) concerns that the civil unrest in Egypt will spread across the Middle East and lead to global instability, which led to investors dumping stocks and putting their money into the safe-haven of government bonds and commodities, (2) the weaker-than-expected US Q4 GDP (+3.2% annualized versus expectations of +3,5% annualized), and (3) a slump in US automakers led by a 13% plunge in Ford after it said Q4 profit fell -79% after its European operations reported a loss, and (4) the warn ing from Moody's Investors Service that it may need to place a "negative" outlook on the US debt rating sooner than anticipated.

   Bullish factors for stocks included (1) the stronger-than-expected Q4 US personal consumption which expanded at its fastest level in 4-1/2 years (+4.4% versus expectations of +4.0%), (2) the larger-than-expected increase in the Jan US University of Michigan consumer confidence (+1.5 to 74.2 versus expectations of +0.6 to 73.3), (3) the smaller-than-expected increase in the Q4 employment cost index (+0.4% versus expectations of +0.5%), and (4) a lack of inflation pressures after the Q4 core PCE deflator increased +0.4% q/q, the smallest increase since data began in 1959.


•   Massey Energy (MEE) soared 14% in pre-market trading after Alpha Natural Resources agreed to buy the company for about $8.5 billion in cash and stock.

[setravis]

Tuesday, February 1, 2011...

Overnight U.S. Stock News

March S&Ps this morning are trading up +6.40 points. The US stock market yesterday finished with moderate gains due to strong US economic data: Dow +0.58%, S&P 500 +0.77%, Nasdaq Composite +0.49%. The Nasdaq fell to a 3-week low but erased its losses and finished higher.

                Bullish factors included (1) the stronger than expected Dec US personal spending (+0.7% versus expectations of +0.5%), (2) the unexpected increase in the Jan Chicago purchasing managers index which expanded at its fastest pace in 22-1/2 years (+2.0 to 68.8 versus expectations of -1.8 to 65.0), (3) slack inflation pressures after the Dec core PCE deflator rose +0.7% y/y, the smallest year-over-year increase since records began in 1959, and (4) strength in energy producers after crude oil rallied to a 1-week high.


                Bearish factors for stocks included (1) concern that the ongoing civil unrest in Egypt will spread throughout the Middle East and lead to global instability, and (2) comments from Atlanta Fed President Lockhart who said the banking system has a "ways to go" before "fully healthy" and that he sees risks to the US economic outlook from the housing market and the European debt crisis.
Newmont Mining (NEM) climbed 1.3% in pre-market trading after copper prices soared to an all-time high.

[setravis]

Wednesday, February 2, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading little changed, down -0.20 of a point. The US stock market yesterday trended higher the entire day and finished with sharp gains on upbeat global economic data: Dow +1.25%, S&P 500 +1.67%, Nasdaq Composite +1.89%. The S&P 500 posted a 2-1/3 year high and the Dow posted a 2-1/2 year high.

                Bullish factors included (1) carry-over support from a rally in Asian and European markets on strong global economic data after German unemployment fell to an 18-year low in Jan, the Jan Euro-Zone PMI manufacturing index was unexpectedly revised up to a 9-month high, the Jan UK PMI manufacturing index unexpectedly expanded at its best level since data began in 1992, and China's manufacturing activity expanded in Jan, (2) the unexpected increase in the Jan ISM manufacturing index which expanded at its fastest level in 6-1/2 years (+2.3 to 60.8 versus expectations of -0.5 to 58.0), (3) strong Q4 earnings results as 74% of the 204 S& ;P 500 companies that have reported earnings since Jan 10 have beaten estimates, and (4) strength in raw-materials producers and mining companies after copper soared to an all-time high on optimism that the expanding global economy will boost demand.

   Bearish factors for stocks included (1) concern that the ongoing civil unrest in Egypt will spread throughout the Middle East and lead to global instability after the Prime Minister of Jordan was forced to resign, and (2) the unexpected plunge in Dec construction spending for a second month along with the downward revision to Nov (Dec -2.5% m/m versus expectations of +0.1% m/m and Nov revised down to -0.2% m/m from the previously reported +0.4% m/m). The plunge in Dec construction spending was the largest since July and brought the value of all projects down to a $787.9 billion annual rate, the lowest in 10 years and a sign that the industry will continue to lag behind the economic recovery.


•   Electronic Arts (ERTS) surged 9.7% in European trading after it reported Q3 earnings of 59 cents a share, ahead of analysts' estimates of 56 cents.

[setravis]

Thursday, February 3, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading down -1.50 points. The US stock market yesterday finished mixed after S&P cut Ireland's credit rating and riots erupted in Egypt: Dow +0.02%, S&P 500 -0.27%, Nasdaq Composite -0.06%. The Dow posted a 2-1/2 year high.

                Bearish factors included (1) concern the European sovereign-debt crisis may worsen after Standard & Poor's cut Ireland's credit rating to A- from A and said the country remains on "creditwatch with negative implications," (2) concern that civil unrest in Egypt may spread throughout the Middle East and lead to global instability after riots broke out between anti-government protesters and people loyal to President Mubarak, and (3) weakness in airline stocks after the International Air Transport Association predicted that oil prices at current levels will increase airline costs by more than this year's projected earnings.

   Bullish factors for stocks included (1) the larger-than-expected increase in the Jan ADP employment change (+187,000 versus expectations of +140,000), and (2) continued strong earnings results as 72% of the 226 companies in the S&P 500 that reported earnings results since Jan 10 have beaten analysts' estimates.


•   Down Chemical (DOW) climbed 1.4% in European trading after the company reported Q4 profit of 47 cents a share on an adjusted basis, beating analysts' estimates of 35 cents.


•   Hartford Financial Services (HIG) rallied 4.3% in European trading after the company reported Q4 earnings of $1.06 a share, beating analysts' estimates of 99 cents, and it also doubled its quarterly dividend to 10 cents a share.

[setravis]

Friday, February 4, 2011...

Overnight U.S. Stock News

•   March S&Ps this morning are trading up +0.60 ahead of the release of the Jan payrolls report. The US stock market yesterday fluctuated on either side of unchanged until early afternoon when it pushed higher into the close on strong economic data: Dow +0.17%, S&P 500 +0.24%, Nasdaq Composite +0.16%. The Dow posted a 2-1/2 year high.

                Bullish factors for stocks included (1) the larger-than-expected decline in weekly initial US unemployment claims (-42,000 to 415,000 versus expectations of -34,000 to 420,000), (2) the unexpected increase in the Jan ISM non-manufacturing index to its best level in 5-1/3 years (+2.3 to 59.4 versus expectations of unchanged at 57.1), (3) the unexpected increase in Dec factory orders (+0.2% versus expectations of -0.5%), (4) the stronger-than-expected Q4 nonfarm productivity (+2.6% versus expectations of +2.0%), and for all of 2010 productivity rose +3.6%, the most since 2002, (5) a lack of wage pressures with the unexpected decli ne in Q4 unit labor costs (-0.6% versus expectations of +0.3%), and for all of 2010 labor costs fell -1.5% after a -1.6% drop in 2009, the first back-to-back declines since 1962-63, and (6) strength in retailers after Retail Metrics reported that comparable-store sales at more than 30 chains of comparable-stores it tracks rose +4.4% in Jan, their 17th straight monthly gain and stronger than expectations of a +2.6% increase.

   Bearish factors included (1) carry-over weakness from a slide in global stock markets as violent protests intensified in Egypt, which raises concern the political unrest may spread throughout the Middle East and lead to global instability, (2) sobering comments from Fed Chairman Bernanke who said that "with output growth likely to be moderate for awhile and with employers reportedly still reluctant to add to their payrolls, it will be several years before the unemployment rate returns to a more normal level," and (3) weakness in commodity producers after dollar strength prompted declines in most commodities.


•   Las Vegas Sands (LVS) fell 5.9% in European trading after it reported Q4 revenue of $2.02 billion, below analysts' estimates of $2.07 billion.


•   Goodyear Tire & Rubber (GT) gained 4.6% in European trading after Appaloosa Management LP disclosed that it had bought a 6.1% stake in the largest US tiremaker.