Markets Mixed Closing News 12/12/2012

Stocks had reached an intra-day high shortly after the Fed released its rate decision, but gave back all their gains, following Chairman Bernanke’s press conference.  Bernanke commented that the economy is already being hurt by the fiscal cliff and added that the Fed could not offset the full impact of the fiscal cliff because it's just too big.  However, Chairman Bernanke did maintain that the he believes the crisis will be resolved without significant long-term damage. The Federal Reserve committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September.  Policymakers also repeated a pledge to keep buying bonds until the labor market outlook improves substantially.  The Dow closed up 2.99 points to 13,245.45.


 


Highlights from the Fed announcement:


 


•             Fed keeps Fed funds rate at 0-0.25% as long as jobless rate is above 6.5% and as long as inflation is seen remaining under 2.5%.


 


•             Fed will begin $45B/month purchases of treasuries when “Operation Twist” expires


 


•             Fed will continue to buy additional agency MBS at $40B/month


 


•             Economic activity and employment continued to improved moderately


 


Fiscal Cliff negotiations intensified in D.C. today, but U.S. House of Representatives Speaker John Boehner said "serious differences" remain with President Barack Obama in their talks. If no agreement is reached, steep tax hikes and budget cuts will fall into place next year.


 


Enjoy your Wednesday night!                                                                             


 


Market Indices/Statistics:



  • Dow closed down 2.99 pts/-0.02 to 13,245.45; 15 of the 30 Dow stocks closed lower

  • S&P closed up 0.64 pts/+0.04% to 1,428.48;  5 of the 10 S&P 500 sectors closed higher

  • Nasdaq closed down 8.49 pts/-0.28% to 3,013.81

  • Telecom was the most positive sector (+1.03%)

  • The VIX ended up 0.38 to 15.95

  • Oil is down $0.97  to $86.76

  • Nat Gas closed down $0.011 to $3.401

  • Gold is up $3.60 to $1,713.20

  • Euro vs. Dollar is up 0.0066 to $1.3070

  • Dollar vs. Yen is down $0.05 at $83.20

 


 


Top Headlines:


 


Berkshire Hathaway Inc, (BRK/B , +$2.05/+2.35% to $89.32) will buy back stock for as much as 120% of book value, a measure of assets minus liabilities.  The old limit was 110%.  The company hadn’t bought back stock this year through Sept. 30 after buying less than $100 million in 2011.  Berkshire Hathaway Inc. cleared the way for more share repurchases as a signal to the markets that they view the stock as undervalued.


 


Walmart Stores Inc. (WMT, -$1.95/-2.75% to $68.94) is being probed by the Indian government about spending on lobbying to facilitate its entry into India.  Walmart recently disclosed that it spent close to $25 million on lobbying activities, including activities related to "enhanced market access for investment in India," according to an India news agency.


 


JPMorgan Chase & Co.  (JPM, +$13/+0.30% to $42.77) was advised by U.S. regulators to improve investor disclosures on proprietary trading almost a year before  a bad trade on credit derivatives cost the bank at least $6.2 billion.  The SEC had asked JP Morgan to provide information about the bank’s so-called principal transactions revenue and proprietary trading.  Proprietary trading, in which banks make bets with their own money, would be restricted under a Dodd- Frank Act provision known as the Volcker rule.


 


Earnings: 


 


Restoration Hardware Holdings (RH) reports Q3 EPS of $0.07 beats by $0.03. Revenue of $284.2M (+22% Y/Y) beats by $2M.


 


Monmouth Real Estate Investment (MNR) reports Q4 FFO of $0.10 beats by $0.06.


 


Official Payments (OPAY) reports Q4 EPS of -$0.12 beats by $0.02. Revenue of $28.9M (+1.5% Y/Y) misses by $1M.


 


Avanir Pharmaceuticals (AVNR) reports Q4 EPS of -$0.09 misses by $0.01. Revenue of $13.5M beats by $0.6M.


 


Coming Thursday:


 


Economic Reports:  Advance Retail Sales (est. 0.5%) 8:30am; Retail Sales Less Autos (Est. 0.0%) 8:30am; Retail Sales Less Auto and Gas (Est. 0.3%) 8:30am; Producer Price Index MoM (Est. -0.5%) 98:30am; PPI Ex. Food & Energy MoM (Est. 0.1%) 8:30am;  Producer Price Index YoY (Est. 1.8%) 8:30am;  PPI Ex. Food & Energy YoY (Est. 1.8%) 8:30am; Continuing Claims (Est. 3210K) 8:30am. 


 


Earnings Thursday:   Ciena Corp. (Est. -$0.06); Comverse Technologies (Est. $1.20); Excel Maritime (Est. -$0.42); Hovnanian (Est. -$0.06); Pier I Imports (Est. $0.24); Quisilver (Est. $0.09); Spartech (Est. $0.70).