YAHOO [BRIEFING.COM]: Listless
and lackluster action left stocks to slog along in negative territory for
almost the entire session, but a late lift helped the S&P 500 limit its
loss in the face of disappointing fourth quarter GDP data. The effort ensured
the broad market measure eked out an incremental gain of less than 0.1% for the
week. Still, that marked its fourth straight weekly gain.
The major equity averages were
mostly mixed this session -- the Dow was down for the entire day, while the
S&P 500 managed to limit its move lower and the Nasdaq maintained its
position narrowly above the neutral line. Dow components Procter &
Gamble (PG 64.30, -0.50) and Chevron (CVX 103.96,
-2.63) both displayed weakness, even though consumer staples giant P&G
posted an upside earnings surprise and integrated oil outfit Chevron was the
one that came short of the consensus earnings estimate. The Nasdaq was helped
by Netflix (NFLX 123.79, +7.78), which extended its prior
session rally to offset weakness in Starbucks (SBUX 47.85,
-0.49) as the coffee company suffered selling pressure despite its upside
earnings surprise.
Other earnings reports
featured on Friday included Ford (F 12.28, -0.46), which fell
short of expectations, but Altria (MO 28.14, -0.52) had
better-than-expected results. Honeywell (HON 58.27, +0.44) had
an in-line report.
Financials offered some
leadership late in the session. The sector had been mired in the red with a
modest loss for most of the session, but broke out in the final hour. Although
it eased off of its high in the final 30 minutes, it still settled with a 0.4%
gain, which is better than what any other sector achieved on the session.
Utilities fell out of favor
after they had posted the only gain of any major group in the prior session.
The defensive-oriented sector slid 1.3% on Friday.
Although stocks spent most of
the session trading in mixed fashion, market participants didn't appear too spooked
or disappointed by an advance estimate on fourth quarter GDP, which showed that
the economy grew at an annualized rate of 2.8% in the fourth quarter, up from a
1.8% clip in the prior quarter. However, the increase in activity still came
short of the Briefing.com consensus call of 3.2% growth. A deeper look shows
that most growth in the fourth quarter was owed to an increase in private
inventories, although increases in personal consumption expenditures and
residential fixed investment also provided positive contributions.
The University of Michigan
released a finalized Consumer Sentiment Survey for January that showed a
reading of 75.0, up from 74.0 in the preliminary reading. That exceeded the
74.2 that had been generally expected among economists polled by Briefing.com.
A substantial serving of
economic reports on Thursday helped make up for the dearth of data earlier in
the week, but their overall quality was mixed relative to expectations. Leading
Indicators increased by 0.4% during December after a downwardly revised 0.2%
increase in the prior month, but that was less than the Briefing.com consensus
call for a 0.7% increase. For the first time since 1996 the Index experienced a
change in its calculation.
Durable goods orders for
December increased by 3.0% to best the Briefing.com consensus for a 2.0%
increase. That came on top of an upwardly revised 4.3% increase for the prior
month. Excluding autos, durable orders climbed 2.1%, which is considerably
better than the 0.7% increase that had been commonly expected. Orders less
autos for the prior month were revised upward to reflect a 0.5% increase.
The latest weekly initial
jobless claims tally increased by 21,000 to 377,000, which is on par with the
375,000 initial claims that many had expected. Notably, the uptick did not
alter the downward trend in the 4-week moving average, which decreased by 2,500
to 377,500.
New home sales for December
fell 2.2% to a seasonally adjusted annual rate of 307,000 units, but analysts
polled by Briefing.com had generally expected sales to climb to clip of 321,000
units. The drop in new home sales came in the face of a 12.8% decline in median
home prices to $210,300.
On Wednesday market
participants were dealt disappointing pending home sales numbers for December.
They showed a 3.5% drop when a 3.0% decline had been expected.
The highlight of the session,
however, was news that the Federal Open Market Committee decided to keep its
federal funds target rate at 0.00% to 0.25%, and that economic conditions are
expected to warrant exceptionally low levels for the federal funds rate through
at least late 2014. That forecast for the fed funds rate preceded news that the
Fed now believes economic growth in 2012 will range from 2.2% to 2.7%, which is
down from the previously forecasted range of 2.5% to 2.9%.
Without any data during the
first two days of the week market participants took their cues from Europe amid
speculation about Greece's dealings with its creditors. Disappointment and
frustration related to ongoing wrangling induced selling some days, but
ultimately the euro was able to rally back. On Friday alone it rallied about 1%
against the greenback. That helped fuel a gain of more than 2% for the week.
Although nothing official has been stated, rumors continue to point to a
possible solution between Greece and its creditors.
Although generally strong,
earnings didn't generate much excitement in the broad market this week. That's
not to say there weren't any stock-specific swings, though.
Colgate-Palmolive (CL 90.40, -0.95) announced in-line
earnings earlier in the week, but blue chips 3M (MMM 87.46,
-0.12) and Caterpillar (CAT 111.28, -0.03) bested expectations
for the bottom line. AT&T (T 29.16, -0.29) came short of
the consensus estimate, as did Bristol-Myers Squibb (BMY
32.29, -0.19). Apple (AAPL 447.28, +2.65) absolutely blew out
Wall Street's forecast, prompting the stock to bound to a new record high, but
better-than-expected earnings from Boeing (BA 74.55, -0.76), United
Technologies (UTX 77.62, +0.21), and ConocoPhillips
(COP 69.40, -0.13) were given less regard when they were released.
Although both tech plays
posted upside earnings surprises, shares of Texas Instruments
(TXN 32.61, +0.42) were sold after their quarterly report was released whereas Western
Digital (WDC 37.05, +0.04) was a top performer in the wake of its
announcement. Market participants also had varied responses to
better-than-expected results from blue chips Johnson & Johnson
(JNJ 65.56, -0.14), DuPont (DD 50.72, -0.22), and McDonald's
(MCD 98.69, -0.49). Fellow Dow components Travelers (TRV
58.05, -0.65) and Verizon (VZ 37.21, -0.13) both traded lower
after they posted earnings that came short of what had been widely expected.
Stocks are making a late push
higher, but pit trade among commodities has closed for the week. An improved
tone of trade in the commodity complex helped the CRB Index eke out a 0.1% gain
for the session. More impressive, though, is the 2.6% weekly gain it posted.
Oil prices oscillated for most
of the session, but ultimately settled with a 0.2% loss at $99.47 per barrel.
That's actually right about where they were in the opening minutes of pit
trade. Meanwhile, natural gas prices swung out of the red to $2.66 per MMBtu
for a 1.9% gain.
Precious metals reversed early
losses, although silver settled higher by only a single penny at $33.74 per
ounce. Gold scored a 0.3% gain by settling at $1732.60 per ounce.
Halliburton (HAL 37.10, +0.94) was the most widely
held name in a handful of companies that announced earnings at the very start
of the week. Though it posted better-than-expected bottom-line results while in
the spotlight, the stock still encountered selling pressure. DJ30 -74.17 NASDAQ
+11.27 NQ100 +0.3% R2K +0.7% SP400 +0.5% SP500 -2.11 NASDAQ Adv/Vol/Dec
1600/1.74 bln/870 NYSE Adv/Vol/Dec 1927/850 mln/1040