Jim Cramer Blog

The Dow Jones Industrial Average chugged along to another record close, topping the mark it last set in February, but the market overall traded mixed. Declining stocks edged advancing issues on both the NYSE and Nasdaq markets. A weak report from Yahoo (Nasdaq: YHOO) after Tuesday's closing bell helped to weigh on the tech sector, as did a loss reported before today's open by Motorola (NYSE: MOT). Crude oil futures edged up slightly, while the 10-year Treasury note pushed higher, shaving the yield.
The Dow's advance was fueled by solid gains by Caterpillar (NYSE: CAT), Boeing (NYSE: BA), andJ.P. Morgan Chase (NYSE: JPM), which reported a 55% increase in Q1 earnings on a 25% increase in revenue today. J.P. Morgan reported a profit of $4.8 billion, or $1.34 a share, against $3.1 billion, or 86 cents a share, last year. The current quarter included an 11-cent gain that resulted from an accounting change. The bank credited reduced volatility and improved profits in its trading operations, as well as record results from its asset management and commercial banking divisions.
In the tech sector, Yahoo's report of an -11% decline in its Q1 profit disappointed investors who were expecting more of an impact from its revised search advertising platform known as Panama. The stock declined -11.8% in today's trading. Subscribers can read our detailed analysis of Yahoo's results in today's issue.. Motorola swung to a Q1 loss as continued weakness in its once-booming mobile phone business weighed on results. Motorola said it expects its handset business to return to profitability by the second half of the year, but many analysts expressed doubt that this would happen.
Not all of the reports coming out of the tech sector were disappointing. The profit report from semiconductor bellwether Intel (Nasdaq: INTC) pleased investors that feared the company's market share battle with Advanced Micro Devices (NYSE: AMD) would cut further into profit margins. Intel, however, reported that its much-watched gross margin came in better than forecasted for Q1, leading the company to predict an increase in profitability in the second half of the year. The company reported earnings of 27 cents a share against 23 cents a share in the same period last year.
In other earnings news, shares of movie rental company Netflix (Nasdaq: NFLX) sank -9.4% as the company's improved Q1 results still fell short of analyst forecasts. The company earned $9.9 million, or 14 cents a share, against $4.4 million, or 7 cents a share, in the year-earlier quarter. Analysts were looking for EPS of 16 cents, according to Thompson Financial.
The tanker sector moved higher after Teekay Shipping (NYSE: TK) announced late Tuesday that it would join with Danish shipping concern A/S Dampskibsselskabet TORM (Nasdaq: TRMD) to buy oil-tanker operator OMI (NYSE: OMM) for $1.8 billion in cash. Teekay's shares advanced 7.2% today on the news. Other shipping concerns were up in today's action as well, including Overseas Shipholding Group (NYSE: OSG), which added 10.3%.
By the BullMarket.com Staff

Labels: AMD, BA, CAT, INTC, JPM, MOT, NFLX, OMM, OSG, TK, TRMD, YHOO

New economic data offered a relatively stable level of inflation, but investors took a pessimistic view of the numbers and sent stocks lower on the day. The disappointment stemmed in part from the fact that, while recent data has been pointing to a softening economy, inflation pressure is still being felt. All three major indexes closed moderately lower on the day
Looking at the numbers, the Labor Department's Consumer Price Index (CPI) rose 0.4% in February, ahead of the 0.3% expected by Wall Street. The closely watched core rate, which excludes volatile food and energy prices, was up 0.2%, matching expectations. Coming on the heels of yesterday's Producer Price Index (PPI) numbers, which pointed to some inflationary pressure, the CPI numbers left investors on edge.
In corporate news, several subprime mortgage stocks once again posted outsized gains as the crisis in that sector continues to shake out. Accredited Home Lenders (Nasdaq: LEND - News) added another 16% on top of yesterday's big gains after announcing that it would sell some of its loans at a discount, enabling it to meet looming margin calls. Fremont General (NYSE: FMT - News) tacked on 20% after its credit line with Credit Suisse was boosted by $1 billion.
Elsewhere, in the wake of the January announcement from the Federal Deposit Insurance Corp. delaying its review of bank charter applications from Wal-Mart (NYSE: WMT - News), the retailer has scrapped long-held plans to establish a bank. Wal-Mart's plans had come under fire because, among other arguments, some believe a Wal-Mart bank would have an unfair advantage over traditional banks. Wal-Mart has argued all along that it never intended to open its own bank, but that it sought to be classified as one in order to reduce credit and debit card transaction costs. Home Depot (NYSE: HD - News), which also has a pending application, has not abandoned its efforts.
In other news, CVS (NYSE: CVS - News) moved one step closer to completing its marathon effort to acquire pharmacy benefits manager Caremark Rx (NYSE: CMX - News) after Caremark shareholders approved CVS' $26.5 billion offer. CVS had been engaged in a long-running bidding war with Express Scripts (Nasdaq: ESRX - News) over Caremark.
Elsewhere in M&A, crude oil tanker company OMI Corp (NYSE: OMM - News) jumped 14.5% after management said it was considering putting the firm up for sale. Newmont Mining (NYSE: NEM - News), meanwhile, posted a modest gain after a BusinessWeek report suggested it might be a target of Barrick Gold (NYSE: ABX - News), the world's biggest gold producer. Barrick, however, dismissed the speculation.
Finally, tech giant Hewlett-Packard (NYSE: HPQ - News) announced the biggest stock buyback in its history, authorizing the repurchase of $8.0 billion in shares. The new authorization comes on top of the $3.3 billion HP had remaining, as of January 31st, under its prior $6.0 billion repurchase plan, which was approved in August 2006. The tech leader finished the session only slightly higher on the news.

Labels: ABX, CMX, CVS, ESRX, FMT, HD, HPQ, LEND, NEM, OMM, WMT