The market review for February 4

Wednesday, 3 February, the U.S. stock market dominated by negative sentiment. Investors, fearful of exit is not too optimistic macroeconomic statistics, chose to begin to fix profit, resulting in a tender opened gepom down. Published data on the number of created jobs in January, fears are not confirmed – decline amounted to 22 thousand against expected 40 thousand, thus index Dow Jones to return to the level of the closure Tuesday, and even slightly exceed it. However, the index of business activity in the service sector in January went weak (50.5 points vs. the expected 51 points), and the market again, a wave of sales.

The mood of bidders influenced and communication agency Moody’s that the United States sovereign credit rating could be downgraded in the future from its current “Aaa” (the highest degree of reliability), unless additional measures are taken to reduce the state budget deficit of the country. At the moment the United States maintains its rating due to the high degree of economic and institutional reliability. But amid the crisis has worsened the relationship between the size of government debt, the U.S. GDP and budget revenues. As expected, experts Moody’s, the figures from the U.S. will be weaker than in other countries with rating “Aaa”.

As a result of trading on February 3 2010. Dow Jones index fell by 26.3 points -0,26%) – to 10,270.55 points, NASDAQ rose by 0.85 points (0.04%) – to 2,190.91 points, S & P 500 fell by 6.04 points (-0.55%) and amounted to 1,097.28 points.

Slightly on Wednesday looked shares media conglomerates Time Warner Inc., Published the accounts for the IV quarter of 2009. Company earned profits of 53 cents per share, whereas a year earlier loss of $ 13.41 per share. Analysts’ forecasts were surpassed, but the demand for paper Time Warner did not use and have fallen in price on its day to 2,14%. Is much better in case a Rupert Murdoch-controlled News Corp., Capitalization per day increased by 7,13%. With the success of “Avatar”, which was filmed at the studio owned corporation Twentieth Century Fox, News Corp. in the II quarter of the current fiscal year with a profit of 25 cents per share, which was higher than analysts expected 20 cents. A large proportion of positive lies in the fact that the set-off II quarter went only 13 days of the show box office film in history, and the remaining profits from the film can be seen in the results of the current quarter. Increases in the prices as Walt Disney Co. (2.57%) and Viacom Inc. (2.12%).

The pharmaceutical sector was under selling pressure after the publication of the report for the IV quarter of 2009. the world’s largest pharmaceutical company Pfizer Inc. Its earnings excluding one-time costs was 49 cents a share, 2 cents nedotyanuv up to market expectations. Increased the reluctance of players to maintain positions in the securities of the company Pfizer pledges to earn for the year 2,1-2,22 per share, which is also below forecasts of investors (2,25 U.S. $ / per share), although not essential. As a result of trading shares of Pfizer fell in price by 2,31%, Merck & Co. – On 2,07%, Bristol-Myers Squibb Co. – On 1,13%, GlaxoSmithKline – to 1,44%, Eli Lilly & Co. – 0,87%.

Significantly reduced the capitalization of the largest in the U.S. life insurance company MetLife Inc. (-4.32%), After it was officially confirmed by the fact of negotiating the purchase of American Life Insurance Company (Alico), owned by American International Group (AIG). Alico has 19 million customers, operates in 50 countries – it will purchase MetLife radically expand its overseas business. However, the agency S & P skeptical about a deal and promises to reduce the credit rating of MetLife, if the deal goes through. Other insurers look better, although not grow: quotes WellPoint Inc. Wednesday fell by 1,51%, Unitedhealth Group Inc. – On 2,14%, The Travelers Companies Inc. – On 1,02%.

At 8,91% shares collapsed Western Union Co. after the company announced its net profit fall for the IV quarter of 2009. to 32 cents a share from 34 cents a year earlier. The results of the report coincided with market expectations. However, investors do not like projections of the company occurred relatively little or no profit on the basis of 2010. Investors American Express Company forecasts a competitor is not scared, and the company’s shares rose by 1.77%.

Capitalization of representatives of the banking industry on the session on February 3 raznonapravlenno changed, but the negative sentiment still prevailed. Papers of Goldman Sachs Group Inc. went up by 0.18%. The remaining players in the sector have completed the day “minus”: Wells Fargo & Co – on 2,09%, US Bancorp – on 1,65%, Citigroup Inc. – On 0,6%, JPMorgan Chase & Co. – On 0,64%, PNC Financial Services Group Inc. – On 1,72%. For stocks last RBC Capital Markets analyst raised the forecast to “at the sector level” to “best choice”.

Paper producers of raw materials become cheaper with varying degrees of intensity. As steel companies, there was a reduction in the leaders of Southern Copper Corp. (-4.83%), Followed by Freeport-McMoRan Copper & Gold Inc. (-2,83%), AK Steel Holding Corp. (-2.7%) And United States Steel Corp. (-2.56%). In the oil and gas industry to lead in the fall of Chevron Corp. (-1.67%), Slightly behind Occidental Petroleum Corp. (-0.8%) And ConocoPhillips (-0,32%). Exxon Mobil Corp. lost 0,54% capitalization.

Complete the third trading session in a row the growth of the U.S. market was not ready, however, and sell securities, bidders are not going. During the past session the Dow Jones came back twice to level the end of trading on Tuesday, indicating investors’ indecision. Apparently, in anticipation of data on unemployment, which will be published on Friday, the global trading ideas on the stock market does not appear, but the players’ interest will be confined to the corporate records of GlaxoSmithKline and MasterCard Inc.

99 Cents Only Stores (NDN:US): The discount retailer reported profit excluding some items of 35 cents a share in the third quarter, beating the average analyst estimate in a Bloomberg survey by 41 percent.

Alexander & Baldwin Inc. (ALEX:US): The parent of ocean- transport company Matson Navigation reported fourth-quarter earnings of 14 cents a share, missing the average analyst estimate in a Bloomberg survey by 40 percent.

Assurant Inc. (AIZ:US): The provider of homeowner and health insurance posted fourth-quarter adjusted profit of 86 cents a share, missing by 14 percent the average estimate of analysts surveyed by Bloomberg.

Broadcom Corp. (BRCM:US): The maker of semiconductors for wireless headsets and television set-top boxes forecast first- quarter sales that exceeded analysts’ estimates.

Burger King Holdings Inc. (BKC:US) rose 5.7 percent to $18.49. The second-largest U.S. hamburger chain reported second- quarter adjusted profit of 37 cents a share, beating the average analyst estimate in a Bloomberg survey by 7.6 percent.

Cisco Systems Inc. (CSCO:US): The biggest maker of networking equipment topped analysts’ profit estimates and predicted an acceleration in sales growth as customers resumed projects they put off during the recession.

Concur Technologies Inc. (CNQR:US) dropped 1.8 percent to $40.39. The maker of software for managing travel expenses forecast 2010 earnings excluding some items of 80 cents a share, missing the average analyst estimate of 82 cents in a Bloomberg survey.

Dolby Laboratories Inc. (DLB:US): The maker of sound systems for film and music forecast 2010 earnings excluding some items of at least $2.21 a share. On average, the analysts surveyed by Bloomberg estimated profit of $2.05.

EnerSys (ENS:US): The industrial-battery maker reported third-quarter profit excluding some items of 44 cents a share, beating the average analyst estimate in a Bloomberg survey by 20 percent.

Idex Corp. (IEX:US): The maker of rescue equipment forecast first-quarter earnings excluding some items of at least 40 cents a share. The average analyst estimate in a Bloomberg survey is for profit of 39 cents.

Kraft Foods Inc. (KFT:US) fell 1.2 percent to $28.15. The world’s second-biggest foodmaker plans to sell at least $4 billion of debt to pay for its takeover of Cadbury Plc, according to a person familiar with the offering.

MEMC Electronic Materials Inc. (WFR:US): The maker of silicon wafers for solar modules and semiconductors posted fourth-quarter loss excluding some items of 1 cent a share. On average, the analysts surveyed by Bloomberg estimated a profit of 2 cents.

MKS Instruments Inc. (MKSI:US) rallied 13 percent to $19.98. The maker of components used in manufacturing flat-panel screens and chip equipment reported fourth-quarter sales of $149.3 million, beating average analyst estimate in a Bloomberg survey by 15 percent.

Monster Worldwide Inc. (MWW:US) fell 5.6 percent to $15.50. The online recruiter reported a fourth-quarter loss of 1 cent a share excluding some items, 25 percent wider than the average analyst estimate in a Bloomberg survey. Monster also said it agreed to acquire the assets of Yahoo! HotJobs, an online recruitment Web site, from Yahoo! Inc. (YHOO:US) for $225 million in cash.

RightNow Technologies Inc. (RNOW:US): The Web-based customer service provider forecast 2010 earnings excluding some items of 45 cents a share at most. On average, the analysts surveyed by Bloomberg estimated profit of 46 cents.

TrueBlue Inc. (TBI:US): The provider of temporary manual labor reported fourth-quarter earnings excluding some items of 5 cents a share, beating the average analyst estimate in a Bloomberg survey by 8.7 percent.

Visa Inc. (V:US) rose 4.2 percent to $87.03. The world’s biggest payments network was raised to “overweight” from “equalweight” at Barclays Capital after posting a 33 percent gain in fiscal first-quarter profit as consumers used credit and debit cards instead of cash and spending picked up.

Yum! Brands Inc. (YUM:US): The owner of Pizza Hut and Taco Bell restaurant chains reported fourth-quarter adjusted profit of 50 cents a share, beating the average analyst estimate of 48 cents a share in a Bloomberg survey.

Key earnings/guidance since yesterday’s close:
-Cisco Systems (CSCO) beat by a nickel in Q2 (Jan) on better-than-expected revenue of $9.8 bln (guidance $9.2-$9.5 bln; First Call consensus $9.4 bln), but slightly worse-than-expected gross margin of 64.5% (consensus 64.8%). On the conference call, mgmt provided upside Q3 revenue guidance, seeing an increase of 23-26% y/y, which translates to $10.0-$10.3 bln (consensus $9.5 bln). It also expects a 64-65% range for gross margin (64.8% consensus) and reiterated its long-term growth forecast of 12-17% y/y. Shares of CSCO are 3% higher premarket.
-Visa (V) beat by $0.11 in Q1 (Dec) on basically in line revenue of $1.96 bln (consensus $1.92 bln). The company is now reporting payment volumes in real time instead of a one quarter lag, and in the first quarter they rose 14% y/y (9% in constant currency) compared to growth of 3% y/y in the fourth quarter. It reaffirmed its outlook for 20%+ EPS growth for FY10, as expected, while also raising its net revenue growth outlook to 11-15% from the “lower end” of 11-15% and its operating margin outlook to the mid-to-high 50% range from the mid 50% range. Shares of V are 4% higher premarket. [Note: Peer MasterCard (MA) will report later this morning.]
-Sony (SNE) reported net income of 79.2 bln yen in Q3 (Dec), well above the 33.7 bln yen consensus, on revenue of 2.24 tln yen. Because of the beat, the company narrowed its loss forecast for FY10, expecting a net loss of 70 bln yen, up from a previous forecast of a net loss of 95 bln yen, while also keeping its revenue forecast of 7.3 tln yen. Shares of SNE are not trading yet premarket.
-Toyota Motor (TM) reported net income of 153.2 bln yen in Q3 (Dec), well above the 87.7 bln yen consensus, on revenue of 5.29 tln yen. The company raised its guidance for FY10, now seeing net income of 80 bln yen, up from expectations of a loss of 200 bln yen, and revenue of 18.5 tln yen, up from 18.0 tln yen. But today’s results may be overshadowed by an acknowledgement of complaints about its Prius model, with the company saying it already modified its braking system in January and will consider steps for current Prius owners. Shares of TM are indicated nearly 1% lower premarket.

Technical Perspective: The S&P spent yesterday’s session in the red, but there were a number of intraday reversals that ultimately accomplished little, which is typical of a market taking a breather following an extensive move. With the employment data on Friday, participants may not be anxious to become aggressive on moves in either direction. The initial range to watch is at 1100 and 1093. Resistance above is at Tuesday’s peak (1104) and the index’s 50-day ema (1106). A support zone is at 1092/1090, with a short-term chart area of importance (initial rebound highs) at 1087/1086.

CALENDARS
Key economic data:
-Initial Jobless Claims for the week ended Jan. 30 (consensus 455,000; prior 470,000) and Continuing Claims for the week ended Jan. 23 (consensus 4.581 mln; prior 4.602 mln) at 8:30 a.m. ET
-Preliminary Q4 Nonfarm Productivity (consensus 6.5%; prior 8.1%) and Unit Labor Costs (consensus -3.5%; prior -2.5%) at 8:30 a.m. ET
-December Factory Orders at 10:00 a.m. ET (consensus 0.5%; prior 1.1%)

Federal Reserve/Treasury:
-Secretary Geithner testifies for a third day on President Obama’s FY11 budget, this time before the Senate Budget Committee at 10:00 a.m. ET
-Kansas City President Hoenig speaks on his U.S. economic outlook and monetary policy at 2:00 p.m. ET

Key Note/Bond auction results:
-None

Key industry conferences:
-Credit Suisse Energy Summit (Day 4 of 5) — Companies presenting: COP, HERO, MRO, OIS, OXY, PDE, CHK, NRG, TAC, DNR, TDW, TRP, HAWK, PXP, VLO, CPX, CQP, ME, PXD, ECA
-Raymond James Growth Airline Conference — Companies presenting: PNCL, SKYW, AAI, CPA, LUV, ALGT, JBLU, RJET

Earnings:
-57 companies are confirmed to report today after the close, though none are expected to be market-moving releases

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