Markets Lower, Closing News 2/22/12

Markets spent most of the day in negative territory over renewed concerns about the economic strength of the euro zone.  Data released showed the services sector contracted along with manufacturing in the region’s most powerful countries, Germany and France.  This report did not encourage investors as trouble still lingers in struggling debtor states, such as Spain where unemployment is at 23%, and Greece where concern for the country’s financial stability remain and continuous cuts have provoked riots.

The Markit Eurozone Composite Flash PMI, a good leading indicator of overall economic growth, fell to 49.7 in February from 50.4 last month, below expectations for a rise to 50.6 and under the 50 line that divides growth from contraction.

Fitch cut its rating for Greek sovereign debt citing a high possibility for default in the near term.

That weakness was echoed in China, whose PMI showed export orders falling, for the fourth month in a row, and in their worst performance in eight months.

Oil (brent crude) was up again today and crossed the $122.50 mark on lingering concerns over Iran’s confrontation with the West, this as talks with U.N. nuclear inspectors failed.

Market Indices/Statistics:

• Dow closed down 27.02 pts/-0.21% to 12,938.67


• S&P closed down 4.55 pts/-0.33% to 1,357.66


• Nasdaq closed down 15.40 pts/-0.52% to 2,933.17


• 10 of the 30 Dow stocks closed higher


• 3 of the 10 S&P 500 sectors closed up


• Energy was the most positive sector (+0.20%);  Financials was the biggest laggard (-1.27%)


• The VIX was flat at 18.19


• Oil is down $0.39 to $105.87


• Nat Gas is up $0.022 to $2.902


• Gold is up $19.70 to $1,778.20


• Euro vs. Dollar is up $0.0002 to $1.3247


• Dollar vs. Yen is up $0.01 at $80.24

Companies in the News:

T-Mobile USA is trying to convince the Federal Communications Commission to block Verizon’s (VZ, -$0.28/-0.7% to $38.21) acquisition of spectrum from cable companies stating that the deal would place an unfair concentration of the service with Verizon.
 

Earnings:

Donaldson Co. Inc. (DCI, -$2.42/-3.2% to $74.51) announced EPS of $0.70 vs. estimates of $0.71; revenue was $580.9 million vs. estimates of $603.6 million.

TJX Cos. (TJX, -$0.09/-0.3% to $35.13) reported EPS of $0.62, in line with expectations; revenue was $6.7 billion, 6.0% higher than the $6.3 billion reported in the year ago period.  Despite pressure on margins, the company reported comp store sales growth of 4% for the year.  The company believes in its value proposition and feels the temperate climate will help drive even better sales growth in the coming months.

Toll Brothers Inc. (TOL, -$1.22/-5.2% to $22.48) reported EPS of (-$0.02) vs. expectations of $0.02; revenue was 322.0 million, 3.6% lower than the $334.1 million reported in the year ago period.  The luxury homebuilder posted an unexpected loss on a less than robust recovery in the housing market, especially as consumers remain focused on high unemployment and rising gas prices.  The company did point to a recent rise in housing starts as a point of optimism.

Earnings After the Bell:

Hewlett-Packard Co. (HPQ, -$0.41/-1.4% to $28.94) reported EPS of $0.92 vs. expectations of $0.87; revenue was $30.0 billion, 7.1% lower than the $32.3 billion reported in the year ago period.

Limited Brands Inc. (LTD, -$0.19/-0.4% to $45.48) announced EPS of $1.50 vs. estimates of $1.46; revenue was $3.5 billion, 1.7% higher than the $3.5 billion reported in the year ago period.

MGM Resorts Intl (MGM, -$0.42/-3.0% to $13.77) reported EPS of (-$0.21) vs. estimates of (-$0.19); revenue was $2.3 billion, 55.7% higher than the $1.5 billion reported in the year ago period.

Coming Thursday:

Economic Reports: Initial Jobless Claims (355k expected) at 8:30 a.m.; Dec. House Price Index – MoM (+0.1% expected)at 10:00 a.m.  Earnings:  Ensco Plc Ads (est: $0.95), American Tower Corp (est: $0.3), Kohl's Corp. (est: $1.80), Public Svc Enterprise Grp Inc. (est: $0.48), Hormel Foods Corp. (est: $0.48), Target Corp. (est: $1.4), Public Storage (est: $1.59), Royal Bank of Scotland Grp PLC ADS (est: $0.05), Telecom Italia S.p.A. ADS (est: $0.89), Tenaris S.A. ADS (est: $0.63), American Intl Grp Inc. (est: $0.61), Molycorp Inc. (est: $0.41), Salesforce.com Inc. (est: $0.40)