The market review for February 22

Stock trading on U.S. trading floors on Friday, February 19, major indexes opened lower against the backdrop of the landmark decision of the Federal Reserve to raise the so-called discount rate. The last time the U.S. central bank increased it in June 2006. The vast majority of analysts interpreted the decision of the regulator as an unambiguous signal about the beginning of the exit from the crisis of monetary regime. A logical extension of the measures initiated sooner or later will increase the base interest rate, which since December 2008. is at the level 0-0,25%. However, in the Reserve tried to reassure the market by stating that the step taken does not mean a quick raise key interest rates. In addition, the department reiterated that the situation in the U.S. financial system is recovering and banks no longer need that level of support that is given to them earlier. Investors found these arguments convincing, and indexes climbed into positive territory.

As a result of trading on February 19 2010. Dow Jones index rose by 9.45 points (0.09%) – to 10,402.35 points, NASDAQ rose by 2.16 points (+0.1%) – to 2,243.87 points, S & P rose to 2,42 points (0.22%) and amounted to 1,109.17 points.

In the technology sector in the deep minus left the paper Dell Inc. after the publication of company accounts for the IV quarter of 2009. according to which its net profit at 17 cents per share by 10 cents could not reach to the predictions of experts. Profitability at the level of 17,4% is also not pleased with the market participants, who were waiting 18%. At Dell dismal explain a shift in demand from expensive PCs with generics and a reduction in corporate sales with higher profitability. As a result of trades Dell has lost 6,65%, IBM Corp. – 0,49%, Hewlett-Packard Company – 0,04%.

Software vendors mostly dropping: Microsoft Corp. decreased by 0,69%, Apple Inc. – On 0,62%, Oracle Corp. – On 0,82%, McAfee Inc. – On 0,17%. Markedly rose in price only Automatic Data Processing Inc. (+0.9%) And Adobe Systems Inc. (1.39%).

As it became known on Friday, the world’s largest oilfield services company Schlumberger Ltd. close to the acquisition of Smith International Inc., that would create a giant in the field of oilfield services. Investors Schlumberger for potential expansion is viewed with skepticism – the company’s stock fell 2.9%, but in the papers of Smith International was active buying – shares soared in price by 13,04%. With regard to oil and gas companies, they mostly appeared stronger in the market: the capitalization of Devon Energy Corp. increased by 1,72%, EOG Resources Inc. – On 0,32%, Occidental Petroleum Corp. – On 0,64%, Chevron Corp. – On 0,58%, ConocoPhillips – on 0,06%.

Commission on International Trade in the U.S. (US International Trade Commission) has concluded that U.S. producers could suffer because of the growing volume of imports of steel drill pipe from China, and is currently considering the establishment of anti-dumping duties. Against this background, United States Steel Corp. went up by 4,57%, AK Steel Holding Corp. – On 1,13%. Demand for the securities of other representatives of the industry was somewhat lower: the shares of Newmont Mining Corp. increased in price by 0,27%, Southern Copper Corp. – On 0,68%, Freeport-McMoRan Copper & Gold Inc. – On 0,73%.

Thanks to a report on improving the situation in the banking industry and there is no need to obtain public support in the previous levels looked good leading American banks. By the end of the trading capitalization US Bancorp rose by 0,96%, The Bank of New York Mellon Corp. – On 3,5%, Goldman Sachs Group Inc. – On 0,29%, Bank of America Corp. – On 0,01%, Wells Fargo & Co. – On 0,11%. Cheaper only Citigroup Inc. (-0.29%) And JP Morgan Chase & Co. (-0.94%).

Fears of imminent increase in base rates the Fed has not significantly changed the situation on the U.S. market – it continued upward movement and concluded the week on a positive note. However, the local “overheating” of quotations began to strike the eye – this is already the second week of growth and the fourth day victory for the bulls “in a row. If in the upcoming trading day week will an episode for the implementation of downward correction, the first thing we will see lower Dow Jones index to a mark of 10300 items, and then to 10150 points. Continued upward movement appears unlikely, however, optimistic buyers will appreciate the fact that the strong resistance levels up to the mark of 10,720 points for the Dow in the U.S. market there.

EnergySolutions Inc. (ES:US): The provider of technical services to the nuclear industry said that, excluding some items, it expects to earn 69 cents a share at most this year. Analysts, on average, estimated profit of 69 cents, according to a Bloomberg survey.

GlaxoSmithKline Plc (GSK:US): The maker of Avandia knew of possible heart damage linked to the diabetes drug several years before a study documented the risk, two U.S. senators said in asking why the Food and Drug Administration has allowed the medicine to remain on pharmacy shelves.

Heineken NV (HINKY:US): The beer maker’s purchase of Fomento Economico Mexicano SAB’s $8 billion unit Cerveza may increase U.S.-traded shares to $40 within three years, according to Barron’s, citing Bernstein Research.

Hologic Inc. (HOLX:US): The medical-imaging equipment maker said it will post a charge of as much as $12.5 million in the current quarter as a result of its patent infringement settlement with Johnson & Johnson’s Ethicon Endo-Surgery unit.

U.S. Bancorp (USB:US): Minnesota’s largest lender was raised to “buy” from “neutral” by Rochdale Securities analyst Dick Bove, who said possible higher interest rates may increase the bank’s margins.

Walgreen Co. (WAG:US): The biggest U.S. drugstore chain may rise to $50 as its $1.1 billion Duane Reade Holdings Inc. purchase helps the company expand revenue in metropolitan New York and pare costs, Barron’s reported, citing BB&T Capital Markets analyst Andrew Wolf.

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