Bullmarket.com Wrapup
Stocks climbed higher today, as investors shrugged off a sharp rise in crude oil prices and whatever anxiety they may have about the Federal Reserve's decision on interest rates, which is due tomorrow. Investors have for the most part resigned themselves to the fact the Fed is unlikely to cut interest rates in the near term; for now they will settle for a continuation of the central bank's steady-as-she goes policy of not raising them further. The 10-year Treasury note also found buyers in advance of the Fed's announcement.
Ordinary Americans, for their part, were upbeat about the state of the economy in January, a period when wages were moving up and oil prices were going down, according to the private Conference Board's monthly consumer confidence survey. Oil futures, however, rose more than $2 a barrel today on a report in The Wall Street Journal that Saudi Arabia would cut its production another 168,000 barrels a day starting February 1st, or almost 1 million barrels a day from last summer. Natural gas prices were also up sharply as artic cold settled in across the Midwest.
In earnings news, U.S. Airways Group (NYSE: LCC - News) swung to a profit in Q4, earning $12 million, or 13 cents per share, against a loss of -$261 million, or -$3.27 a share, during the corresponding 2005 quarter. The results included several special items, which if excluded, meant the company would have earned $86 million, or 91 cents a share. The stock dropped -2% despite the positive results. Fuel prices are the company's largest cost component, and today's increase in oil prices contributed to the selling pressure. Rival JetBlue Airways (Nasdaq: JBLU - News) also declined, falling -4% after it reported a return to profitability in Q4, earning $17 million, or 10 cents a share, against a year-earlier loss of -$42 million, or -25 cents a share.
Proctor & Gamble (NYSE: PG - News) reported a 12% increase in profits amid strong sales of razors and other high-margin products, and it increased its full-year guidance. Meanwhile, transportation bellwether United Parcel Service (NYSE: UPS - News) reported results that were in line with expectations, but it issued soft guidance for the current quarter and full year.
In the pharmaceutical sector, Merck (NYSE: MRK - News) said acquisition costs and the loss of patent protection for its anti-cholesterol drug Zocor cut its Q4 profit by -58%. Revenue, however, was up 5% on sharply increased sales of vaccines. Merck's profit dropped to $474 million, or 22 cents a share, from $1.1 billion, or 51 cents per share, a year earlier. Included in the results was a charge of -$466 million related to Merck's purchase of biotechnology company Sirna Therapeutics. Wyeth (NYSE: WYE - News), meanwhile, said its profits rose 17% on strong sales of its vaccine Prevnar and arthritis drug Enbrel, but its results were below analyst forecasts. Wyeth co-markets Enbrel Amgen (Nasdaq: AMGN - News).
Electronics retailer Radio Shack (NYSE: RSH - News) rose 5% after being upgraded from "sell" to a "buy" by Goldman Sachs, which called the company a "classic turnaround opportunity." Wireless phone maker Motorola (NYSE: MOT - News) also rose sharply, jumping 7% on news that activist investor Carl Icahn has taken a 1.4% stake in the company and was seeking a seat on its board. Motorola, the world's #2 cell phone maker, recently reported a -48% drop in its Q4 profits as prices for its popular Razr phones have plummeted. The stock has been trading near its 52-week low.
Ordinary Americans, for their part, were upbeat about the state of the economy in January, a period when wages were moving up and oil prices were going down, according to the private Conference Board's monthly consumer confidence survey. Oil futures, however, rose more than $2 a barrel today on a report in The Wall Street Journal that Saudi Arabia would cut its production another 168,000 barrels a day starting February 1st, or almost 1 million barrels a day from last summer. Natural gas prices were also up sharply as artic cold settled in across the Midwest.
In earnings news, U.S. Airways Group (NYSE: LCC - News) swung to a profit in Q4, earning $12 million, or 13 cents per share, against a loss of -$261 million, or -$3.27 a share, during the corresponding 2005 quarter. The results included several special items, which if excluded, meant the company would have earned $86 million, or 91 cents a share. The stock dropped -2% despite the positive results. Fuel prices are the company's largest cost component, and today's increase in oil prices contributed to the selling pressure. Rival JetBlue Airways (Nasdaq: JBLU - News) also declined, falling -4% after it reported a return to profitability in Q4, earning $17 million, or 10 cents a share, against a year-earlier loss of -$42 million, or -25 cents a share.
Proctor & Gamble (NYSE: PG - News) reported a 12% increase in profits amid strong sales of razors and other high-margin products, and it increased its full-year guidance. Meanwhile, transportation bellwether United Parcel Service (NYSE: UPS - News) reported results that were in line with expectations, but it issued soft guidance for the current quarter and full year.
In the pharmaceutical sector, Merck (NYSE: MRK - News) said acquisition costs and the loss of patent protection for its anti-cholesterol drug Zocor cut its Q4 profit by -58%. Revenue, however, was up 5% on sharply increased sales of vaccines. Merck's profit dropped to $474 million, or 22 cents a share, from $1.1 billion, or 51 cents per share, a year earlier. Included in the results was a charge of -$466 million related to Merck's purchase of biotechnology company Sirna Therapeutics. Wyeth (NYSE: WYE - News), meanwhile, said its profits rose 17% on strong sales of its vaccine Prevnar and arthritis drug Enbrel, but its results were below analyst forecasts. Wyeth co-markets Enbrel Amgen (Nasdaq: AMGN - News).
Electronics retailer Radio Shack (NYSE: RSH - News) rose 5% after being upgraded from "sell" to a "buy" by Goldman Sachs, which called the company a "classic turnaround opportunity." Wireless phone maker Motorola (NYSE: MOT - News) also rose sharply, jumping 7% on news that activist investor Carl Icahn has taken a 1.4% stake in the company and was seeking a seat on its board. Motorola, the world's #2 cell phone maker, recently reported a -48% drop in its Q4 profits as prices for its popular Razr phones have plummeted. The stock has been trading near its 52-week low.
posted by Stock Administrator @ 10:16 PM
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