Markets Higher, Closing News 2/16/12

Markets closed the day higher, above or close to key support levels on encouraging news from Greece and positive U.S. economic news.

European central banks are discussing a deal to allow Greek bond holders to swap their existing bonds for new ones; the new plan is expected to be approved on Monday.

U.S. wholesale prices rose only modestly in January, as energy and food costs declined, but a jump in other prices could be a concern for the Federal Reserve as it contemplates further economic stimulus.   Jobless claims were down 13,000 to 348,000 more better than the expected 365k; while there is still a question about the number of people who have dropped out of the workforce altogether, investors were encouraged by the jobs numbers especially as the four week moving average of jobless claims remains below the key level of 400,000.  Housing starts were up 1.5% to 699k which was better than expected and December’s numbers were revised up, signaling a slow upward trend in home construction.

Market Indices/Statistics:

  • Dow closed up 123.13 pts/+0.96% to 12,904.08

  • S&P closed up 14.81 pts/+1.10% to 1,358.04

  • Nasdaq closed up 44.02 pts/+1.51% to 2,959.85

  • 29 of the 30 Dow stocks closed higher

  • All 10 S&P 500 sectors closed up

  • Consumer Discretionary was the lowest gainer (+0.53%);  Materials was the most positive sector (+1.68%)

  • The VIX was down 1.92 to 19.22

  • Oil is up $0.47 to $102.61

  • Nat Gas is up $0.077 to $2.815

  • Gold is up $2.10 to $1,730.20

  • Euro vs. Dollar up $0.0068 to $1.3134

  • Dollar vs. Yen up $0.49 at $78.91


Apache Corp. (APA, -$0.06/-0.6% TO $107.61) reported EPS of $2.94 vs. expectations of $2.87; revenue was $4.3 billion, 25.1% lower than the $3.4 billion reported in the year ago period.

Duke Energy Corp. (DUK, +$0.23/+1.1 to $21.10) announced Q4 adjusted EPS of $0.24 vs. expectations of $0.21; revenue was $3.37 billion, 2 % lower than the $3.46 billion reported in the year ago period but slightly better than expectations of $3.46 billion. Earnings were hurt by reduced electricity needs and higher maintenance costs thanks to mild temperatures and storm damage domestically, but that was offset by strong results from the company’s hydro-electric power plants in Brazil.

General Motors Co. (GM, +$2.24/+9.0% to $27.17) reported EPS Of $0.39 vs. expectations of $0.41; revenue was $38.0 billion, 3.0% higher than the $36.9 billion reported in the year ago period and better than expectations of $37.9 billion.  GM announced its highest profit of $7.6 billion in 2011.  The company will work to improve efficiency and has announced that its white-collar workers will be moved to retirement plans to lower pension liabilities.  There is some concern over the company’s European business, but the company plans to work on that concern.  The company continues to try and proceed with its acquisition of Progress Energy in the face of concerns that the Federal Energy Regulatory Commission has expressed.

J.M. Smucker Co. (-$6.55/-8.4% to $71.60) announced Q3 adjusted EPS of $1.22 vs. estimates of $1.41; revenue was $1.47 billion, lower than the $1.54 billion expected by analysts.  The company’s FYE outlook was weak as well; EPS are expected to be $4.60-$4.65 on revenue of $5.5 billion vs. expectations of $5.02 on revenue of $5.65 billion.  Higher prices for products like JIF peanut butter and Folgers coffee turned customers away and margins were hurt by rising raw materials costs.

Marriott (MAR, +$0.09/+0.3% to $34.82) reported EPS of $0.46 vs. estimates of $0.47; revenue was $3.7 billion, 1.4% higher than the $3.6 billion reported in the year ago period. Occupancies and room rates improved at the company’s hotels in most markets around the world, and they are encouraged by a growing middle class and economic growth in emerging markets; on that view RevPar guidance was raised to 5-7% for 2012 which sent shares higher.

VF Corp. (VFC, +$4.67/+3.3% to $147.92) reported EPS of $2.32 vs. expectations of $2.30; revenue was $2.9 billion, 36.9% higher than the $2.1 billion reported in the year ago period.  The rise in revenue was due to strong Timberland sales and the performance of the company’s outdoor and action sports divisions, little fazed by the moderate winter climate domestically; however, margins were pressured by higher production costs.  FYE 2012 outlook is a little light; EPS is expected to be $9.30 vs. estimates of $9.53 and revenue is expected to be $10.96 billion shy of the $11.24 billion consensus.

Coming Friday:

Economic Reports:  Jan. Consumer Price Index – MoM (+0.3% expected) at 8:30 a.m. and Jan. Leading Indicators (+0.5% expected)  Earnings:  Aegon N.V. ADS (est: $0.13), Brookfield Asset Mgmt Inc. (est: $0.20), Campbell Soup Co. (est: $0.62), Digital Realty Trust Inc. (est: $1.01), Enbridge Inc. (est: $0.39), Encana Corp. (est: $0.09), Gold Fields Ltd. ADS (est: $0.53), H.J. Heinz Co. (est: $0.85), Pilgrim's Pride Corp. (est: $-0.29), Ventas Inc. (est: $0.87)