Markets Higher, Closing News 2/8/12

Markets managed to end up in positive territory on a quiet news day driven mostly by corporate earnings as investors weighed another delay in Greek negotiations


Market Indices/Statistics:



  • Dow closed up 5.75 pts/+0.04% to 12,883.95

  • S&P closed up 2.91 pts/+0.22% to 1,349.96

  • Nasdaq closed up 11.78 pts/+0.41% to 2,915.86

  • 16 of the 30 Dow stocks closed higher

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

  • Financials was the most positive sector (+0.77%);  Energy was the most negative sector (-0.55%)

  • The VIX was up 0.51 to 18.16

  • Oil is up $0.62 to $99.03

  • Nat Gas is down $0.032 to $2.440

  • Gold is down $12.80 to $1,735.90

  • Euro vs. Dollar down $0.0004 to $1.3255

  • Dollar vs. Yen up $0.02 at $77.05

Companies in the News:


Yahoo! (YHOO, -$0.10/-0.6% to $15.78) Chairman, Roy Bostock, along with three other directors, announced their intention to step down from the company’s board making room for some restructuring which many say includes a much needed strategy for the company Chinese business, Alibaba. 


3M Company (MMM, +$0.08/+0.1% to $87.97) Chairman, President and CEO, Sir George W. Buckley announced his intention to retire this Summer.  The board named COO, Inge G. Thulin as the next President and CEO and ultimately Chairman in May.


 


Diamond Foods (DMND, -$16.95/-45.0% to $36.66) fell in late trading after an announcement ran that its Audit Committee concluded that the company’s financial statements for 2010 and 2011 would need to be restated to correct for the treatment of payments to walnut growers, an issue which has been largely in question over the past several months.  Inadequate internal controls were cited as inaccurate records were found.  The board will also be appointing a new CEO and CFO.


Earnings:


Agrium Inc. (AGU, +$1.78/+2.2% to $82.98) announced adjusted Q4 EPS of $2.34 vs. expectations of $1.99; revenue was $3.18 billion vs. estimates of $3.08 billion. The strong profit was due mostly to strength in grain prices.  The company expects to expand its potash production capacity by about 50%.


Computer Science Corp (CSC, +$4.91/+18.5% to $31.39) reported EPS of $1.35 vs. expectations of $0.57; revenue was $3.8 billion, lower than the $4.0 billion reported in the year ago period.  There seemed to be some positive reaction to the announcement of a new CEO, Mike Lawrie, who has extensive IT experience.


CVS Caremark Corp. (CVS, +$0.49/+1.1% to $43.57) announced Q4 EPS of $0.82 per share on net income of $1.06 billion vs. $0.75 and $1.03 billion in the year ago period.  Adjusted earnings were $0.89, which was in line with analyst expectations.  Revenue was $28.32 billion, 15% higher than the year ago period and better than the $28.09 billion expected by analysts.  The positive results were due to an increase in pharmacy service revenue and new business.  The company sees FYE earnings of $3.18-$3.28 which were adjusted higher because of business the company expects to gain as a result of the Walgreen-Express Scripts merger dispute.  Estimates for the year were $3.26 per share.


Ralph Lauren Corp. (RL, +$14.42/+9.2% to $171.49) reported EPS of $1.78 vs. expectations of $1.67; revenue was $1.8 billion, 16.6% higher than the $1.5 billion reported in the year ago period.


Sprint Nextel (S, -$0.04/-1.6% to $2.41) announced Q4 earnings of (-$0.35) vs. estimates of (-$0.37).  The company’s profit margin based on operating earnings before items fell to 9.5% from 16% a year earlier due to the high cost of subsidizing Apple’s iPhone.  Sprint added 161k subscribers vs. expectations of 272k.  Although, revenue of $8.72 billion was better than the $8.3 billion expected by analysts.  Full year revenue growth of 4-6% is the company’s forecast on operating income of $3.7-$3.9 billion.


Time Warner Inc. (TWX, +$0.01/+0.03% to $38.11) reported EPS of $0.94 vs. $0.87; revenue was $8.2 billion, 4.9% higher than the $7.8 billion reported in the year ago period. Higher revenue was largely driven by the release of Harry Potter and the Deathly Hollows: Part 2” on home video.  The company is confident in its program pipeline even as the Harry Potter franchise comes to a close.  Approximate forecasts for the year are $3.18 - $3.32 while analysts are expecting $3.16.


Walt Disney Co. (DIS, +$0.29/+0.7% to $41.27) returned Q1 EPS of $0.80 vs. estimates of $0.72; revenue was $10.78 billion, slightly higher than the $10.72 billion reported in the year ago period.  A recovering consumer has lead to increased attendance and increased spending by those who are visiting the company properties.  Advertising revenue was up for Disney’s broadcasting properties, but ratings were down – particularly on ESPN thanks to the NBA lockout.


Coming Thursday:


Economic Reports:  Weekly Initial Jobless Claims (370k expected) at 8:30 a.m.; Dec. Wholesale Inventories (+0.4% expected)   Earnings:  Bunge Ltd. (est: $1.57), CF Indus Hldgs Inc. (est: $6.82), Coca-Cola Enterp Inc. (est: $0.36), Credit Suisse Grp AG ADS (est: $0.66), Intl Flavors & Fragrances Inc. (est: $0.71), LinkedIn Corp. (est: $0.07), Noble Energy Inc. (est: $1.14), PepsiCo Inc. (est: $1.13), Philip Morris Intl Inc. (est: $1.09), Scripps Networks Interactive Inc. (est: $0.82)