Jim Cramer Blog

The stock market managed a modest positive follow-up on Wednesday's rally, fueled by well received comments on the economy from Federal Reserve Chairman Ben Bernanke. Bernanke testified before Congress again today, but his reiteration of comments made yesterday had much less impact. Traders instead shifted some of their focus to digesting new reports on the state of housing and manufacturing output today. Oil prices dropped sharply early in the day on a forecast of warmer weather returning to the Northeast next week, but crude futures recovered to close essentially unchanged. The 10-year Treasury note rose, trimming the yield to 4.71%.

A report from the National Association of Realtors confirmed what most observers of the housing industry believed: the housing market slump accelerated in the final three months of last year, with formerly booming regions of the country recording the sharpest declines. According to the realty industry trade group, sales in Nevada dropped -36%, -31% in Florida, -27% in Arizona, and -21% in California. Nationwide, home sales fell in 40 states and median home prices declined in nearly half of the metropolitan areas surveyed by the realtors. The trade group's chief economist said he believes the housing slump is bottoming out.
In other economic news, industrial production dropped -0.5% in January, the sharpest decline since Hurricanes Katrina and Rita disrupted manufacturing activity in the summer of 2005, the Federal Reserve reported. Almost half of the manufacturing decline was due to a sharp -6.0% drop in automobile production. Energy production was also off -1.2%.
In earnings news today, biotechnology company Biogen Idec (Nasdaq: BIIB - News) reported Q4 profits that were nearly double its year-ago results. Biogen earned $109 million, or 32 cents a share, up from $56 million, or 16 cents, a year earlier. Revenue rose 12% to $708 million. Excluding one-time charges, Biogen earned 53 cents a share, which was 2 cents shy of estimates. The stock finished down -5%. The company also offered an upbeat assessment of Tysabri, its new treatment for multiple sclerosis. The drug produced only $30 million in revenue in Q4 but is expected to become a top seller for the company. Regulators in the U.S. and Europe approved reintroducing Tsyabri last June. The drug was pulled from the market shortly after its 2005 introduction following the deaths of two patients from a rare brain disorder. Doctors are now warned to monitor patients for the disorder known as PML.
Anheuser-Busch (NYSE: BUD - News) gained 3% on reports that it was in possible merger talks with the Belgium-based brewer InBev. Neither company would confirm whether talks were going on. Bud's domestic rival, Molson Coors Brewing (NYSE: TAP - News), meanwhile, rose to a record high after the company posted a sharp increase in its Q4 profit. The beer maker said it earned $99 million, or $1.14 a share, up from $22.4 million, or 26 cents, a year earlier. Revenue rose 11% to $2.1 billion.
In the technology sector, Real Networks (Nasdaq: RNWK - News) sank -16% on a sharp earnings decline and a weak outlook. The stock was immediately downgraded to "sell" by Oppenheimer. The company's net income fell to $39 million from $296 million a year ago. Revenue rose 50% to $126 million. Last year's results included a lawsuit payment from Microsoft (Nasdaq: MSFT - News).

Published By BullMarket.com Staff

Labels: BIIB, BUD, MSFT, RNWK, TAP