The market review for January 29

Once again, the U.S. stock indexes Dow Jones and S & P 500 updated bi-monthly minimums for that night after the close of the previous trading session in the U.S. futures indices grew, and consolidated in the afternoon reached altitudes. A reason for such a quick change of treatment formed President Barack Obama to the nation, the positive sentiments were disappointing investors data makrostatistiki. Not so much as expected, the number of Americans who first applied for unemployment insurance for the week ended Jan. 23 – at 8 thousand instead of the predicted 32 thousand addition, the volume of orders for durable goods in December increased by only 0, 3%, while the expected growth rate of at least 2%. Both figures questioned made before representatives of the Federal Reserve and Barack Obama statement on the marked improvement of the economic situation. Additional pressure on the NASDAQ index had collapsed Paper Motorola Inc. and Qualcomm Inc.

As a result of trades on Thursday, the Dow Jones index fell 115.7 points (-1.13%) – up to 10,120.46 points, NASDAQ – to 42,41 points (-1.91%) – up to 2179 points, S & P – at 12.97 points (-1.18%) – up to 1,084.53 points.

Engaged in development and research of wireless communications Qualcomm Inc. reported back on Thursday about getting up I quarter 2009-2010 financial year, profit of 50 cents per share, lower than forecasts released by the company in October 2009. Then she planned to earn no less than 54 cents per share. Producer also lowered his profit forecast for the II quarter of the current financial year to 40 cents a share, while market participants are expected at 57 cents. The lowering of forecasts led to a downgrade Qualcomm from “above market” to “at market” analysts Morgan Keegan, as well as the revision of the recommendation to “buy” to “hold” experts ThinkEquity. Poor for a day Qualcomm completed the collapse of quotations at 14.24%.

Slightly less fell Motorola Inc., Which failed to meet analysts’ expectations only in terms of revenue – in the IV quarter of last year it amounted to 5.72 billion dollars instead of the projected 5.96 billion dollars Decreased flow of revenues from sales of mobile phones (currently Motorola loses market share), building networks, as well as making a segment of building infrastructures IT. Investors such news were not met and chose to get rid of the Securities Motorola. Outcome – minus 12.43%. Other representatives of the sector is also cheaper: Cisco Systems Inc. – On 2,72%, Corning Inc. – On 2,77%.

Profits of U.S. telecommunications giant AT & T Inc. increased in the IV quarter of 2009. to 51 cents per share due to good growth of mobile business. The company’s revenues declined by about 1% and amounted to 30.9 billion dollars Both figures have coincided with market expectations, quotes operator fell slightly – to 0.31%. Adversely affected Verizon Communications Inc. (-1.81%), According to securities analysts that the company had reviewed the recommendation from Argus “buy” to “hold”.

The pharmaceutical sector has been declining slightly faster than the market. Shares Pfizer Inc. fell 1,95%, Merck & Co. – On 1,73%, GlaxoSmithKline – to 1,48%, Bristol-Myers Squibb Co. – On 0,82%. Much “sunk” in the price of only paper AstraZeneca (-5,4%), because the increase in net profit in the IV quarter of 2009. not met expectations of industry experts. The company earned 1.42 per share, up 8% below the forecast. In the next five years, AstraZeneca plans to rescue in the corridor of 28-34 billion dollars per year.

World’s largest consumer goods manufacturer Procter & Gamble Co. said on Thursday the receipt in II quarter 2009-2010 financial year net profit of $ 1.49 per share, which exceeded the forecasts of industry experts (1.36 dollars per share). The company also announced plans to build up sales for the year to 3-5%. Against this background, the paper Procter & Gamble went up by 1.43%. Colgate-Palmolive Co. also managed to please the participants of the market: its profit amounted to $ 1.21 per share to $ 1.18 instead of the expected addition of the manufacturer promised double-digit growth of this indicator in 2010. Day of paper grew, but on the basis of trades fell 0.5%. Kimberly-Clark began the session growth, but by the end of the day went in a minus on 0,66%.

Separately, it should be noted the rapid growth of quotations on-line-service rental movies US NetFlix Inc. The company reported an increase in net profit in the IV quarter of bygone years to 56 cents a share, while analysts were not expecting more than 49 cents. The company managed to increase the number of subscribers due to the rising popularity of movies on discs in the spread of gaming consoles, the mass closure of video store, as well as the signing of agreements with major movie studios. On Thursday, its recommendations on the securities services to “buy” improved intelligence Jefferies & Co and Merriman, a Wedbush Morgan revised the outlook to “at market” and in FBR Capital – to the “above market.” As a result of trades NetFlix capitalization soared to 23.68%. Shares online store Amazon.com Inc. increased by 2,67%, eBay Inc. – Fell on the same 2,67%.

Papers of financial groups on Thursday, more expensive, affected a statement Barack Obama that he does not plan to punish banks. Capitalization of JPMorgan Chase & Co. Jan. 28 rose by 0,38%, Bank of America Corp. – On 1,18%, Goldman Sachs Group Inc. – On 1,18%, Wells Fargo & Co – on 0,89% and Citigroup Inc. – On 1,25%.

Quotes steel companies, by contrast, decreased. At the end of the day drop in stock price, Alcoa Inc. amounted to 1,86%, United States Steel Corp. – 2,19%, AK Steel Holding Corp. – 0,86%. Stronger than copper producers of paper fell Southern Copper Corp. (-4.82%) And Freeport-McMoRan Copper & Gold Inc. (-3.41%).

It seems that members of the American market began to resist the fall of quotations. Every day the index is updated lows, but after a second consecutive session to the end of the trading optimism returned. It seems that on Friday the Dow Jones risks to reach the same mark to round 10000 items (like on the weak performance of GDP for the IV quarter of 2009.), And in perspective a few days in the U.S. market rebound may occur on top.

Amazon.com Inc. (AMZN:US) rose 3.6 percent to $130.55. The world’s biggest online retailer forecast first-quarter sales that beat some analysts’ estimates and said it will buy back as much as $2 billion of its shares.

Juniper Networks Inc. (JNPR:US) added 6 percent to $25.95. The second-largest maker of networking equipment reported profit that topped analysts’ projections after corporate customers renewed spending and phone carriers upgraded their networks. Fourth-quarter profit excluding some items was 32 cents a share, 25 percent higher than the average analyst estimate, according to Bloomberg data.

Microsoft Corp. (MSFT:US) advanced 1.6 percent to $29.64. The world’s largest software maker reported second-quarter earnings that topped analysts’ estimates after Windows 7 spurred the first sales increase in a year. Profit excluding some items was 74 cents a share, beating the average analyst estimate by 26 percent.

PMC-Sierra Inc. (PMCS:US) surged 6.3 percent to $8.25. The chipmaker reported fourth-quarter profit excluding some items of 17 cents a share, beating the average analyst estimate in a Bloomberg survey of 14 cents.

Theravance Inc. (THRX:US) slumped 11 percent to $12.01. The drugmaker must submit more information to U.S. regulators before they will resume their review of the company’s experimental treatment for pneumonia.

Amazon.com Inc. (AMZN:US) rose 3.6 percent to $130.55. The world’s biggest online retailer forecast first-quarter sales that beat some analysts’ estimates and said it will buy back as much as $2 billion of its shares.

Juniper Networks Inc. (JNPR:US) added 6 percent to $25.95. The second-largest maker of networking equipment reported profit that topped analysts’ projections after corporate customers renewed spending and phone carriers upgraded their networks. Fourth-quarter profit excluding some items was 32 cents a share, 25 percent higher than the average analyst estimate, according to Bloomberg data.

Microsoft Corp. (MSFT:US) advanced 1.6 percent to $29.64. The world’s largest software maker reported second-quarter earnings that topped analysts’ estimates after Windows 7 spurred the first sales increase in a year. Profit excluding some items was 74 cents a share, beating the average analyst estimate by 26 percent.

PMC-Sierra Inc. (PMCS:US) surged 6.3 percent to $8.25. The chipmaker reported fourth-quarter profit excluding some items of 17 cents a share, beating the average analyst estimate in a Bloomberg survey of 14 cents.

Theravance Inc. (THRX:US) slumped 11 percent to $12.01. The drugmaker must submit more information to U.S. regulators before they will resume their review of the company’s experimental treatment for pneumonia.

Amazon.com Inc. (AMZN:US) rose 3.6 percent to $130.55. The world’s biggest online retailer forecast first-quarter sales that beat some analysts’ estimates and said it will buy back as much as $2 billion of its shares.

Juniper Networks Inc. (JNPR:US) added 6 percent to $25.95. The second-largest maker of networking equipment reported profit that topped analysts’ projections after corporate customers renewed spending and phone carriers upgraded their networks. Fourth-quarter profit excluding some items was 32 cents a share, 25 percent higher than the average analyst estimate, according to Bloomberg data.

Microsoft Corp. (MSFT:US) advanced 1.6 percent to $29.64. The world’s largest software maker reported second-quarter earnings that topped analysts’ estimates after Windows 7 spurred the first sales increase in a year. Profit excluding some items was 74 cents a share, beating the average analyst estimate by 26 percent.

PMC-Sierra Inc. (PMCS:US) surged 6.3 percent to $8.25. The chipmaker reported fourth-quarter profit excluding some items of 17 cents a share, beating the average analyst estimate in a Bloomberg survey of 14 cents.

Theravance Inc. (THRX:US) slumped 11 percent to $12.01. The drugmaker must submit more information to U.S. regulators before they will resume their review of the company’s experimental treatment for pneumonia.

Key earnings/guidance since yesterday’s close:
-Amazon.com (AMZN) beat by $0.13 in Q4 on better-than-expected revenue of $9.5 bln (First Call consensus $9.0 bln) and gross margin of 20.7% (consensus 20.4%). The company issued upside revenue guidance for Q1 of $6.45-$7.00 bln (consensus $6.4 bln), and in line operating income guidance of $275-$365 mln (consensus $335.3 mln). Shares of AMZN unexpectedly spiked lower immediately following the release, down as much as 8.4%, but quickly rebounded and are 3% higher premarket.
-Microsoft’s (MSFT) fiscal Q2 (Dec) results were skewed due to the recognition of $1.7 bln in deferred revenue to the Windows 7 Upgrade Option Program and pre-sales of Windows 7 to OEMs and retailers before being generally available. This had a $0.14 impact on EPS. The company reported EPS, ex items, of $0.60, and it appears this morning that sell-side analysts are adding back the $0.14 special item and using an EPS of $0.74 for the quarter, which means the company beat by $0.15. Shares of MSFT have traded modestly higher since the release, and are 1% higher premarket.
-SanDisk (SNDK) beat by $0.49 in Q4 due to much better-than-expected gross margin of 52.5% (consensus 37.0%), as revenue came in only slightly above expectations at $1.24 bln (consensus $1.16 bln). Shares of AMZN did not rally on the numbers, however, continuing a trend we have seen all earnings season from large-cap technology names (AAPL, IBM, INTC), as bottom-line beats are due to cost cutting and easy analyst estimates — SanDisk also had beats of this size in each of the prior two quarters ($0.49 and $0.52, respectively) — while top line figures are not as impressive. They then plunged as much as 14.5% during the conference call when management issued in line guidance, seeing Q1 revenue of $875-$950 mln (consensus $916.3 mln) and gross margin of 31% plus or minus 3%, and 2010 revenue of $4.0-$4.4 bln (consensus $4.3 bln). They have rebounded since, but are still 5% lower premarket.
-Honeywell (HON) beat by a penny in Q4, but on slightly weaker-than-expected revenue of $8.07 bln (consensus $8.15 bln). The company reaffirmed its 2010 guidance, seeing EPS of $2.20-$2.40 (consensus $2.41) and revenue of $31.3-$32.2 bln (consensus $31.8 bln). Shares of HON are modestly higher premarket.

Technical Perspective: The S&P 500 did retrace a sizeable portion of yesterday’s slide (62% at 1091), allowing it to close above the previous pullback low (November-December range low at 1083), but the choppy recovery reflects uncertainty. The after hours tone was favorable, but sustained progress back through 1091 and 1094 in front of the high (1100) is needed just to begin to improve the weak bias off last week’s high.

CALENDARS
Key economic data:
-Q4 Advance GDP, q/q annualized, at 8:30 a.m. ET (consensus 4.7%; prior 2.2%)
Real Personal Consumption Expenditures (consensus 1.8%; prior 2.8%)
Core PCE (consensus 1.3%; prior 1.2%)
(Chain) Price Index (consensus 1.3%; prior 0.4%)
-January Chicago PMI at 9:45 a.m. ET (consensus 57.2; revised prior 58.7)
-January Final Michigan Sentiment around 9:55 a.m. ET (consensus 73.0; prior 72.8)

Federal Reserve/Treasury:
-Vice Chairman Kohn speaks on interest rate risk management at 8:15 a.m. ET

Key Note/Bond auction results:
-None

Earnings:
-EEP is the only company confirmed to report today after the close

Key industry conferences:
-None

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