Bears are out in force at mid-day as losses at the major US
indexes deepened following disappointing earnings results from Ford
), Microsoft (
) and Amazon.com (
). 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 (
) 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 (
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
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
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
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.
) 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
) 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
--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
) 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
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.
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