Markets Higher, Closing News 2/28/12

Markets recovered after being down this morning on disappointing durable goods orders and a lower than expected S&P Case Shiller index number.  Consumer confidence results buoyed the markets and sent them into positive territory for the rest of the day.  The Dow finally found its way to close above 13,000!

Orders for long-lasting goods dropped 4.0% in January at the fastest pace in three years, as demand for big ticket items fell sharply after recently gaining.  The S&P Case Shiller index showed that home prices in December fell 3.1% to the lowest levels since the housing crisis began in mid-2006. However, consumer confidence rose to 70.8 in February much better than the 63.0 expected by analysts.  The report attributed the increase to a better view of current business and labor market conditions as well as a more optimistic view of the employment situation.

European markets were up on the announcement of the European Central Bank initiating a 2nd Long-Term Refinancing Operation aimed at addressing a new credit crunch.

Light sweet crude moved down on the disappointing durable goods results.  It is currently at $106.46.

This has been the best February for the S&P since 1998, and it closed at its best level since June 2008; the Nasdaq ended at its best level since December 2000.

Market Indices/Statistics:

  • Dow closed up 23.61 pts/+0.18% to 13,0005.12

  • S&P closed up 4.59 pts/+0.34% to 1,372.18

  • Nasdaq closed up 20.60 pts/+0.69% to 2,986.76

  • 21 of the 30 Dow stocks closed higher

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

  • IT was the most positive sector (+0.86%);  Utilities was the biggest declining sector (-0.37%)

  • The VIX was down 0.23 to 17.96

  • Oil is down $2.10 to $106.46

  • Nat Gas is down $0.085 to $2.627

  • Gold is up $11.20 to $1,786.10

  • Euro vs. Dollar is down $0.0011 to $1.3454

  • Dollar vs. Yen is up $0.02 to $80.47

Companies in the News:

Apple Inc. (AAPL, +$10.40/+2.0% to $535.41) shares rose on excitement over the debut of the iPad3 which is expected for next Wednesday.  Apple crossed the $500 billion market cap level.

Apollo Group (APOL, -$7.90/-15.4 to $43.04) shares were hit after the company announced that its expects to sign up fewer students in Q2, a low to mid single digit decline; the announcement came after a strong upswing in new student enrollment in Q1.  The company believes they’re at the bottom of a recovery though they are finding that the recovery is turbulent. Aside from macroeconomic issues facing potential students, competition in the sector increased when the U.S. Department of Education set new results aimed at addressing student populations with high debt but low job rates.  The company reduced guidance for 2012 operating profits from $655-$750 million to $625-$725 million.

Micron Tech Inc. (MU, +$0.33/+3.9% to $8.88) shares were active again today on yesterday’s news that a rival, Japanese-based Elpida, filed for bankruptcy protection. In addition, Intel is selling its stake in two wafer factories to Micron for $600 million in order to expand their NAND Flash memory joint venture relationship to improve the venture's efficiency and flexibility.


Cablevision Sys Corp. (CVC, -$1.51/-9.7% to $14.13) announced EPS of $0.22 vs. expectations of $0.23; revenue was $1.7 billion, 10.5% lower than the $1.9 billion reported in the year ago period.  Shares were under pressure after the company commented that it would not be raising rates in 2012 as the company steps up efforts to grow its subscriber base and stem the loss of customers to satellite and phone-company TV service providers.  Furthermore, analysts expecting an increase in cash flow were disappointed when the company said it expects to see a decline.

Domino's Pizza Inc. (DPZ, +$5.28/+15.7% to $38.82) returned Q4 EPS of $0.52 vs. expectations of $0.49; revenue was $501.7 million, 4.5% higher than the $479.97 million reported in the year ago period.  Results were higher than expected thanks to share repurchases and new products like artisan pizza and cheesy bread that helped drive sales.  The company announced a new Android app which is expected to boost orders in Q2.

Office Depot (ODP, +$0.57/+18.9% to $3.59) reported EPS of $0.03 vs. expectations of $0.00; revenue was $2.97 billion, 0.3% higher than the $2.96 billion reported in the year ago period. The better than expected results were driven by lower expenses and fewer offered discounts during the 4th quarter.  Office supply companies are also benefitting from the reduction in jobless claims and increased consumer confidence.

Coming Wednesday:

Economic Reports: Weekly Mortgage Applications (-4.5% previously) at 7:00 a.m.; Q4 GDP (+2.8% expected) at 8:30 a.m.; Chicago PMI (61.0 expected) at 9:45 a.m.; Beige Book at 2:00 p.m.   Earnings:  Carter’s Inc. (est: $0.44), CenterPoint Energy Inc. (est: $0.19), Joy Global Inc. (est: $1.35), Liz Claiborne Inc. (est: $0.10), Edison Intl (est: $0.45); Costco Wholesale Corp (est: $0.87), Staples Inc. (est: $0.40)

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