The market review for January 28

On Wednesday, January 27, trading on the U.S. stock market started with the dominance of moderately positive sentiment: investors waited for maintaining a soft monetary policy, the U.S. Federal Reserve and optimistic statements by Obama during his annual address to the nation. The first 30 minutes of trading was enough to leave the leading index in positive territory, but the published U.S. Department of Commerce (US Department of Commerce) data on the volume of sales of new homes in the United States changed the situation worse. Sales fell by 7.6%, while analysts expected growth rate of 3%. Following 2009. selling new buildings have fallen by 23%, indicating that consumers extremely pessimistic on the prospects for the U.S. economy.

The mood of investors has raised the Fed, which retained its key rate target range at the level of 0-0,25% per annum and pledged to keep rates at exceptionally low levels for a long time. The notes also mentioned about the revival of economic activity, and on the renewal (or as it turned out, the deterioration of the situation) of the housing market it was decided to ignore. The positive end of the trading session enabled the U.S. market end the day in positive territory.

As a result of trading Tuesday, the Dow Jones index rose by 41.87 points (0.41%) – to 10,236.16 points, NASDAQ – to 17,68 points (0.8%) – to 2,221.41 points, S & P – at 5.33 points (0.49%) – up to 1,097.50 points.

One of the leaders of the decline among the most actively traded companies has become a manufacturer of agricultural and construction equipment Caterpillar Inc. In terms of net profit in the IV quarter of 2009. (36 cents per share instead of the expected 28 cents), the company surpassed analysts’ expectations, but revenue – to $ 7.9 billion against expected 7.93 billion dollars – could not reach. Most market participants have upset expectations for Caterpillar 2010.: The company is planning for the year to earn U.S. $ 2.5 per share, while investors expect U.S. $ 2,7 As a result of the trading session producer has lost 4,32% of the capitalization.

Where warmer was met quarterly reporting Aircraft Corp. Boeing Co. In IV quarter of 2009. corporation not only has returned to a profitable level, earning 1.75 per share, but also exceeded the expectations of the market (1.36 per share). This year, the company promises to make 3,7-4 per share. Quotes Boeing on Wednesday rose by 7,31%. Papers of industrial conglomerate United Technologies Corp., Is also engaged in the production of aircraft equipment, fell 1.26%. The financial results of companies that are present in the environment in general, coincided with the expectations of experts, but the company warned of lower number of orders for aircraft engines manufactured by Pratt & Whitney due to the decline in demand for passenger air travel in the past year.

International Air Transport Association (IATA) reported on 27 January, which reduced demand for air travel in the world in 2009. was the biggest in history. As the head of IATA Giovanni Bizinyani, the industry long lost 2.5 years of growth in passenger traffic and 3,5 – in the cargo. The bad news is that the head of the association is waiting for the airlines of the loss of 5.6 billion dollars in 2010. Against this backdrop, shares of U.S. airlines look bad. Papers of Southwest Airlines Co. fell 1,89%, AMR Corp. – On 0,26%. Equity United Airlines Corp. went up by 0.31%.

For the expert was not unexpected preservation Fed key rate at close to zero, so the shares of the banking sector on Wednesday with confidence increasing in value. Capitalization of JPMorgan Chase & Co. increased by 2,32%, Bank of America Corp – on 2,84%, Citigroup Inc. – On 1,59%, and Wells Fargo & Co – on 4,48%, Fifth Third Bancorp – on 4,01%, US Bancorp – on 3,33%.

Net profit of U.S. investment firm BlackRock Inc. increased in the IV quarter of 2009. four times compared with the same period of 2008., up 2.39 per share. This was above expectations of analysts, forecast 2.1 per share. As a result of trading securities BlackRock went up by 0.92%.

Wednesday was announced good news about the investment company owned by Warren Buffett, Berkshire Hathaway Inc. – Its shares will be added to the calculation of the S & P 500. The company’s capitalization rose for a day on 5,16%. The index will replace its paper shares Burlington Northern. Shareholders did not last very upset, daily increase in the value of its securities amounted to 0,2%.

The dynamics of technology companies was on Wednesday in different directions. Internet company Yahoo! Inc. reported an increase in net profit in the IV quarter of 2009. to 155.7 million dollars compared to a net loss of $ 300.6 million dollars a year earlier, while the revenue for the period declined. The company’s shares started the day growth, but by the end of trading it lost. Outcome – minus 0.06%. The growth of capitalization of Amazon.com Inc. (2.74%) contributed to increased recommendations for securities with a “hold” to “buy” by analysts Kaufman Bros. Apple Inc. after the presentation of the new Tablet PC went up by 0.94%.

Not in favor were Jan. 27 steel companies: impact prolonged fall in prices for industrial metals. Shares Freeport-McMoRan Copper & Gold Inc. fell to 1,03%, AK Steel Holding Corp. – On 1,41%, Southern Copper Corp. – On 0,51%. After lowering the Citigroup analyst recommendations to “buy” to “hold” on shares of United States Steel Corp. market value of steel company had fallen on 6,07%.

So, the trading session on 27 January can be regarded as the most successful of the last six. Investors will no longer sell out of paper and even selectively start buying promising market. Overshadowed by fears of slowing Chinese economy. On Wednesday, Chairman of the Board of Directors of Templeton Asset Management Ltd. Mark Mobius, suggested that the slowdown in credit growth in China will have even a beneficial effect on the economy. It seems that the American market is ready to show a small correction to the top. For a start, though, he must cease to update the annual minimum, which in the course of trading on Wednesday, could not resist.

Amylin Pharmaceuticals Inc. (AMLN:US) dropped 3 percent to $18.20. The maker of drugs for metabolic diseases reported fourth-quarter adjusted loss of 32 cents a share. The average analyst estimate in a Bloomberg survey was a loss of 30 cents.

BMC Software Inc. (BMC:US) rose 2.3 percent to $38.10. The maker of programs that manage mainframes and computer networks forecast 2010 profit excluding some items of $2.64 to $2.72 a share. The analysts surveyed by Bloomberg estimated earnings of $2.61 on average.

Citrix Systems Inc. (CTXS:US) lost 3.6 percent to $40.48. The maker of networking software forecast first-quarter profit excluding some items of 40 cents a share at most. The average analyst estimate in a Bloomberg survey was for profit of 41 cents.

Flextronics International Ltd. (FLEX:US) declined 4.2 percent to $6.80. The contract maker of electronics for other companies forecast fourth-quarter profit excluding some items of 13 to 16 cents a share, missing some analysts’ estimates. On average, the analysts surveyed by Bloomberg estimated profit of 14 cents.

Landstar System Inc. (LSTR:US) retreated 2.9 percent to $38.02. The trucking company forecast first-quarter profit excluding some items of 28 to 32 cents a share, missing some analysts’ estimates. On average, the analysts surveyed by Bloomberg estimated profit of 31 cents.

LSI Corp. (LSI:US) slid 5.8 percent to $5.65. The maker of chips for International Business Machines Corp. and Seagate Technology forecast first-quarter profit excluding some items of 4 to 10 cents a share, missing some analysts’ estimates. On average, the analysts surveyed by Bloomberg estimated profit of 6 cents.

Manitowoc Co. (MTW:US) fell 1.7 percent to $11.24. The maker of cranes and machinery amended its credit agreement to issue a new series of senior notes. The information was disclosed in a regulatory filing.

Netflix Inc. (NFLX:US) surged 14 percent to $58.30. The largest U.S. mail-order movie-rental service forecast 2010 earnings of $2.28 to $2.50 a share on sales of as much as $2.11 billion. That compares with analysts’ estimates of $2.22 on revenue of $2.04 billion.

Owens-Illinois Inc. (OI:US) gained 3.5 percent to $29.50. The world’s largest maker of glass reported adjusted fourth- quarter profit of 49 cents a share. The average analyst estimate in a Bloomberg survey was 47 cents a share.

Qualcomm Inc. (QCOM:US) slumped 9.7 percent to $42.60. The world’s biggest maker of mobile-phone chips, lowered its 2010 sales outlook and forecast second-quarter profit that missed analysts’ estimates, a sign demand isn’t rebounding as fast as anticipated. Profit excluding some items will be as much as 53 cents a share in the quarter ending in March, Qualcomm said. That compares with the 57-cent average of estimates compiled by Bloomberg.

Symantec Corp. (SYMC:US) retreated 4.2 percent to $17.82. The biggest maker of computer security software forecast fourth- quarter profit excluding some costs of 36 cents to 37 cents a share, missing some analysts’ estimates. On average, the analysts surveyed by Bloomberg estimated profit of 37 cents.

Tetra Tech Inc. (TTEK:US) declined 8.7 percent to $22.88. The provider of consulting and technical services forecast second-quarter profit excluding some items of 23 cents a share at most. On average, the analysts surveyed by Bloomberg estimated earnings of 30 cents.

Key earnings/guidance since yesterday’s close:
-Qualcomm (QCOM) beat by $0.06, ex items, in its fiscal Q1 (Dec) on in line revenue of $2.7 bln. But the company issued downside Q2 guidance, seeing EPS, ex items, of $0.49-$0.53 (First Call consensus $0.57) and revenue of $2.4-$2.6 bln (consensus $2.8 bln). It reiterated its previous FY10 EPS guidance of $2.10-$2.30 (consensus $2.26), but lowered its FY10 revenue guidance to $10.4-$11.0 bln (consensus $11.1 bln) from $10.5-$11.3 bln. Shares of QCOM are 9% lower premarket.
-Nokia (NOK) beat by 0.06 euros in Q4 on better-than-expected revenue of 12.0 bln euros (consensus 11.3 bln euros). The company expects Devices & Services net sales to be 6.5-7.0 bln euros and Nokia Siemens Networks net sales to be 2.6-2.9 euros bln in Q1, though it said operating margin for both will be negatively impacted by seasonality. The company also reiterated expectations for industry mobile device volumes to be up ~10% and mobile device volume market share to be flat in 2010. Shares of NOK are 12% higher premarket.
-Ford (F) missed by a penny in Q4 despite beating handily on the top line — $35.4 bln vs. $32.6 bln consensus. The company plans to be profitable in 2010 on a pre-tax basis, ex items, with positive automotive operating-related cash flow. But it also expects the latter to be less than the run rate implied by the strong H2 2009 cash flow. Nevertheless, shares of F are nearly 4% higher premarket, though off their best levels.
-Motorola (MOT) beat by a penny, ex items, in Q4, but on weaker-than-expected revenue of $5.7 bln (consensus $5.9 bln). The company sees EPS, ex items, of ($0.01)-$0.03 in Q1, which may not be comparable to the $0.03 consensus estimate. Shares of MOT are 4% lower premarket.
-AT&T (T) reported in line EPS in Q4 on in line revenue of $30.9 bln, despite net additions in total wireless subscribers rising 2.7 mln, the second highest quarterly net gain in the company’s history. Shares of T are unchanged premarket.

Technical Perspective: The ability of the S&P to once again hold near a previous pullback low (as it did during July and November pullbacks), on an intraday or close basis and in conjunction with the extended technicals (indicators/VIX) and leadership from the Financial sector, set the stage for the late-session recovery yesterday. While these are potential short-term favorable developments, how the index performs over the next one to three days as the earnings season continues will provide an indication as to whether any recovery attempt can be sustained. Resistance is at the highs of the last few days/congestion (1104/1105), with its 50-day ema/sma at 1110/1114. Initial support is at 1091/1090 in front of the 1085/1083 zone.

CALENDARS
Key economic data:
-December Durable Goods Orders (consensus 2.0%; revised prior -0.7%) and Orders ex-transportation (consensus 0.5%; revised prior 1.5%) at 8:30 a.m. ET
-Initial Jobless Claims for the week ended Jan. 23 (consensus 450,000; prior 482,000) and Continuing Claims for the week ended Jan. 16 (consensus 4.593 mln; prior 4.599 mln) at 8:30 a.m. ET

Federal Reserve/Treasury:
-None

Key Note/Bond auction results:
-$32 bln in 7-year Notes at 1:00 p.m. ET

Earnings:
-63 companies are confirmed to report today after the close, including Amazon.com (AMZN), Microsoft (MSFT) and SanDisk (SNDK)

Key industry conferences:
-None

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