Jim Cramer Blog

Earnings and the economy are the focus for traders and so far Tuesday, this has been enough to push stocks higher. Nonetheless, traders are cautious ahead of the FOMC statement due out tomorrow afternoon. A gain in consumer confidence has helped push Caterpillar (CAT) and Home Depot (HD) higher and Motorola (MOT) shares are up sharply on news of buying by Carl Icahn. CNet Networks (CNET) is seeing its shares soar on earnings news, although drug-makers Merck (MRK) and Wyeth (WYE) are down on disappointing results. 3M (MMM) has also put pressure on the Dow ($INDU), falling hard on its earnings report. MMM shares are off nearly four percent Tuesday, accounting for more than 20 points on the Dow. This diversified maker of products announced earnings that were four-cents short of estimates. The company also stated that 2007 earnings would be in a range from $4.60 to $4.75 a share. However, this is well below analysts’ expectations for earnings closer to $4.99 a share. Drug makers MRK and WYE are seeing there shares fall one and two percent respectively. MRK’s earnings were a penny short of expectations on a 58 percent drop in profits. However, MRK shares had gained 38 percent from their lows last May. At least the company reaffirmed guidance for 2007, which kept selling to a minimum. WYE also missed earnings estimates handily though earnings and revenues rose more than 10 percent from the year ago period. Shares of handset maker MOT are higher by more than six-percent in midday action. The company is benefiting from news that Carl Icahn has raised his stake in the company to 1.4 percent and that he has sent in notice to the company for nomination to its Board of Directors at the 2007 Annual Meeting. This has helped take the stock off its yearly lows near $18. Shares of technology media company CNET are up nearly 10 percent Tuesday. This is occurring despite the fact that company announced a sharp decline in profits in the fourth-quarter. However, revenues were up 14 percent and investors were pleased to hear that 2007 sales would be much stronger than analysts had predicted. In economic news, the Conference Board released its January confidence index and it came in just above expectations. The index rose to 110.3 from 110.0 in December, but improvements came in the employment component and the inflation gauge. Though this isn’t a report that gets a lot of attention from traders, economically sensitive stocks like CAT and HD have seen gains on the news.
Jody Osborne

Labels: CAT, CNET, HD, MMM, MOT, MRK, WYE