Jim Cramer Blog

It was a rollercoaster ride on Wall Street, as stocks attempted to balance a solid Hewlett-Packard (NYSE: HPQ - News) earnings report with mortgage sector concerns and a report by the Fed predicting slowed economic growth in 2008. The Dow finished up 52 points on the day to close at 13,010. Meanwhile, the Nasdaq and S&P each posted small gains to finish at 2,597 and 1,440, respectively. Light, sweet crude surged in trading to close at $97.69 per barrel for December delivery. Treasury prices traded relatively flat, while gold prices gained on the day to close at $794.50 an ounce. The dollar hit a new low versus the euro, but gained against the yen.

On the economic front, the Federal Reserve revealed that it's cut its growth expectations for the U.S. economy for the coming year. According to newly released forecasts, the central bank now expects growth to slow to between 1.8%-2.5% in 2008, down sharply from previously unreleased estimates in June that had forecasted growth of 2.5%-2.75%.
In earnings news, shares of Freddie Mac (NYSE: FRE - News) plunged -28.7% today after posting a net loss and announcing it would write down nearly -$8.1 billion in lending-related assets. For the third quarter, the mortgage company reported a loss of -$2.03 billion, or -$3.29 per share, compared with a loss of -$715 million, or -$1.17 per share, a year earlier. The firm said it has hired an adviser to help study capital-raising options and said it is considering slashing its dividend by -50%.
After the bell last night, Hewlett-Packard reported a fourth-quarter surge in net income to $2.16 billion, or 81 cents a share, up 28% from $1.69 billion, or 60 cents per share, last year. Excluding one-time items, the company posted a profit of 86 cents per share. Sales in the quarter jumped to $28.3 billion, up 15% from $24.6 billion a year earlier. Analysts, on average, had been looking for a profit of 82 cents per share on revenue of $27.4 billion. Shares of Hewlett-Packard traded up fractionally on the day.
Shares of Target (NYSE: TGT - News) were down -4.1% in trading as the discount retailer posted a drop in net earnings to $483 million, or 56 cents per share, down from $506 million, or 59 cents per share, a year ago. Quarterly revenue rose to $14.82 billion, up 9.3% from $13.57 billion in 2006. On average, analysts were looking for EPS of 62 cents on $14.8 billion in revenue. The company also said its board had authorized a new $10 billion share repurchase program. Subscribers can read our take on Target in today's edition.
Homebuilder D.R. Horton (NYSE: DHI - News) reported a swing to a loss in the fourth quarter. For the period ended September 30th, the company posted a loss of -$50.1 million, or -16 cents per share, versus a profit of $277.7 million, or 88 cents per share, last year. Sales in the quarter fell to $3.12 billion, down -35% from $4.8 billion in 2006. Despite the loss, results still beat Wall Street estimates, as analysts had predicted a loss of -66 cents per share on sales of $2.9 billion. Shares of D.R. Horton closed up 2.5% on the day.

By the BullMarket.com Staff

Labels: DHI, DR Horton Inc., FRE, HPQ, TGT