Bears Rule Regular Session as Consumer Sentiment, Earnings Weigh

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Bears are out in force at mid-day as losses at the major US indexes deepened following disappointing earnings results from Ford ( F ), Microsoft ( MSFT ) and Amazon.com ( AMZN ). A drop in consumer sentiment also weighed on the markets, as well as unrest in Egypt.

In the latest economic data, the Thomson Reuters/University of Michigan consumer sentiment index fell to 74.2 from 74.5 in December. Also, real gross domestic product, the broadest measure of the U.S economy, rose at a 3.2% annualized rate in the fourth quarter, up from a 2.6% rate in the third quarter. Economists polled by MarketWatch expected Q4 GDP to rise of 3.5%.

On the upside, consumer spending rose at a 4.4% annual rate in the final three months of the year, the fastest pace since the first quarter of 2006. Inventories were a big drag on growth in the fourth quarter but this was largely offset by a positive contribution from net exports. For the year, GDP advanced 2.9%, compared with a 2.6% drop in 2009. This is the strongest growth rate in five years.

In company news:

ADRs of Sanofi-Aventis ( SNY ) are down after the drug maker saw disappointing results from an experiment breast cancer drug it was developing. Sanofi's BSI-201 did not slow a certain type of aggressive breast tumor, Sanofi said in a statement. The news comes as a setback for Sanofi, which has been trying to acquire Genzyme ( GENZ ).

Borders (BGP) is up sharply after it said late Thursday it has received a commitment from GE Capital, Restructuring Finance to provide a $550 million senior secured credit facility. Upon completion, it will include $125 million of additional junior debt financing via the conversion of vendor payables and/or external sources. And, it will provide Borders with the financial flexibility and an appropriate level of liquidity to move forward with its strategy to reposition its business model and the Borders brand.

Boston Scientific Corp. (BSX) is just lower this morning after the the U.S. Justice Department reportedly sued the medical device manufacturer, alleging it sold defective cardiac devices. The government, in an email statement to Bloomberg news, said Boston Scientific didn't fully reveal problems with the devices.

Savvis Inc. (SVVS) is getting a boost after Verizon Communications Inc. (VZ) moved to acquire a Savvis rival for $1.4 billion. The deal for Terremark Worldwide, Inc. (TMRK) had other firms in the cloud-computing security space were higher this morning, including Equinix Inc. (EQIX) and Rackspace Hosting Inc. (RAX), up 2% and 5%, respectively, before givng a portion of their early advance.

Sara Lee (SLE) shares are down after confirming plans to split into two entities focusing on North American meats and international coffee and tea. The separation would include a $3-per-share special dividend and should be completed early in 2012.

In the latest earnings news:

--Jefferies (JEF) is down after it says revised Q4 EPS was $0.31, a penny below the Thomson Reuters mean of $0.32.

--Microsoft ( MSFT ) reported Q2 revenue of $19.95 billion, better than the analyst consensus of $19.1 billion on Thomson Reuters. EPS was $0.77 per share, vs. expectations of $0.68 per share. But profit eased from the year-ago quarter, which appears to be disappointing Wall Street. Shares had gained modestly in the regular session, ahead of the results, which hit in the final minutes of the day session Thursday.

--Amazon.com ( AMZN ) is down after reporting Q4 sales of $12.95 billion, below the analyst consensus of $13 billion on Thomson Reuters. EPS was $0.91, vs. expectations of $0.88 per share. For Q1, the company is guiding for sales of $9.1 to $9.9 billion, vs. the Street view of $9.3 billion.

--Chevron (CVX) says it earned $2.64 per share in Q4, including items. Sales were $52 billion. The Thomson Reuters mean was for $55.96728 billion in sales and $2.41 per share in earnings, usually less items.

--Ford ( F ) reported Q4 earnings of $0.30 per share, down from year ago levels. Revenue was $32.5 billion, down from $34.8 billion last year. The Street view was earnings of $0.48 per share on revenue of $30.3 billion. Looking forward, Ford said it plans to deliver continued improvement in pre-tax operating profit and Automotive operating-related cash flow in 2011.

--Oplink (OPLK) is sharply higher after reporting Q2 revenue of $52 million, better than the Street view of $50 million. EPS was $0.52, vs. expectations of $0.41 per share. For Q3, the company sees revs of $52 to $56 million and EPS of $0.49 to $0.55 per share. The Street view is $48 million in revenue and earnings of $0.38 per share

Commodities are higher. April gold contracts are up $26, or 1.95%, to $1,345 an ounce while March crude oil contacts are up 4.04%, or $3.46, at $89.08 a barrel.

In energy ETFs, the United States Oil Fund (USO) is up 4.37% to $37.53 and the United States Natural Gas fund (UNG) is up 0.17% to $5.89.

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 2.47% to $131.09. Market Vectors Gold Miners (GDX) is up 2.33% to $54.98. iShares Silver Trust (SLV) is up 3.58% to $27.23.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


This article appears in: Investing , Commodities

Referenced Stocks: AMZN , F , GENZ , MSFT , SNY

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