Mid-Day Update: Housing Data Lifts Dow Back Above 14,000; Bernanke Urges Congress to Act

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The fear that gripped U.S. equity markets at the end of last week and Monday has abated, as buyers have stepped up to the plate for the second consecutive session, pushing the Dow up to triple digit gains at mid-day. Muted U.S. stock futures this morning led to a mildly positive start, despite a worse-than-expected reading on January durable goods orders, but the release of positive housing market data added some fuel to the recent market buying spree.

Durable goods orders declined 5.2% in January, just above the 5.0% slump forecast by economists. According to The Commerce Department, durable goods orders slid 5.2% due to large declines in bookings for commercial and defense aircraft. Economists polled by MarketWatch forecast durable goods orders would decline 5.0%. Durable goods orders minus the volatile transportation sector increased 1.9%, their fastest rise in over a year.

Orders for core capital goods, surged 6.3%, their fastest increase in over two years. Shipments of core capital goods, a key metric used to calculate quarterly economic growth, dipped 1.0%. December durable goods orders were revised down to a 3.7% increase from their prior reading of a 4.3% climb.

The release of January pending home sales figures earlier in the session caused a notable bump up in market averages, with that figure rising 4.5% from the previous month, according to the National Association of Realtors. That trumped expectations of a 1.8% gain, with volume 9.5% above January 2012--the highest reading since April 2010. The Association also revised December's numbers down.

Meanwhile, on Capitol Hill, Federal Reserve Chairman Ben Bernanke was wrapping up his remarks to the House Financial Services Committee, during the second day of his semiannual report to Congress on the economy and monetary policy. Yesterday he urged Congress to come up with some type of compromise to avoid automatic Federal spending cuts due to hit on Friday.

Overseas, Asian markets were mixed to mostly higher, while European bourses fought a strong headwind created by uncertainty over Italy's political landscape and the region's ongoing debt woes, posting gains across the board.

Commodities were mixed at mid-day. Oil was up fractionally after last week's decline, up $0.13 at $92.67 per barrel. January natural gas was up $0.0708 to $3.534 per million BTUs.

Gold futures were down $13.20 per ounce to $1,602.30, as the yellow ore continued to wrestle with the technically critical $1,600 level. Silver was down $0.255 to $29.065 per ounce. Copper was down $0.0115 to $3.5715.

Here's where the markets stood at mid-day:

NYSE Composite up 68.70 (+0.78%) to 8,834.88

Dow Jones Industrial Average up 103.15 (+0.74%) to 14,003.28

S&P 500 up 13.03 (+0.87%) to 1,509.97

Nasdaq Composite Index up 31.71 (+1.01%) to 3,161.36

GLOBAL SENTIMENT:

Nikkei 225 Index down 1.27%

Hang Seng Index up 0.25%

Shanghai China Composite Index up 0.86%

FTSE 100 Index up 0.97%

DAX up 0.95%

CAC 40 up 1.85%

NYSE SECTOR INDICES:

NYSE Energy Sector Index (^NYE) up 128.99 (+1.00%) to 12,978.50

NYSE Financial Sector Index (^NYK) up 37.51 (+0.70%) to 5,373.12

NYSE Healthcare Sector Index (^NYP) up 48.13 (+0.58%) to 8,396.62

UPSIDE MOVERS:

(+) BGMD (+7.8%) said the publication of two studies demonstrates the clinical utility of repeated galectin-3 testing as a tool in the assessment of patients with heart failure. The studies demonstrate that periodic evaluation of galectin-3 levels can help clinicians identify those at greater risk of unplanned hospital admission and cardiovascular morbidity and mortality.

(+) DLTR (+12.6%) reported that Q4 sales were $2.25 bln, in line with the analyst consensus on Capital IQ. EPS was $1.01, vs. expectations of $0.99 per share.

(+) MAKO (+12.2%) Shares jumped after company reported Q4 revs of $30.2 mln, below the analyst consensus of $31.4 mln on Capital IQ. Loss for the quarter was $0.13, lower than $0.14 in Q4 2011, but missing expectations of a loss of $0.11 per share.

DOWNSIDE MOVERS:

(-) PZZA (-8.1%) Shares slid after the company reported adjusted Q4 2012 EPS of $0.62, vs. $0.65 per share in Q4 last year. That's off from Street estimates of $0.76 per share for Q4. Fourth quarter 2012 revenues were $367.3 million, a 19.9% increase from fourth quarter 2011 revenues of $306.2 million and higher than the $348 million analysts expected.

(-) FSLR (-15.9%) got pummeled after it was downgraded to a Neutral rating from Outperform by analysts at Robert W. Baird. The firm also reduced its price target on the stock to $25 from $30 a share.

(-) DWA (-3.6%) fell after the company reported a Q4 loss of $0.98 per share, versus the Capital IQ consensus of a $0.03 loss per share, if comparable. Revenues were $264.7 mln, versus the analyst estimate of $213.2 mln. The company said that it recorded a charge of about $165 million, which includes a write-down of film costs for Rise of the Guardians in the amount of $87 million, charges totaling $54 million related to the company's decision to return Me & My Shadow back to development, a write-off of a number of other development projects in the amount of $20 million and a charge of $4.6 million related to restructuring activities.



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.

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This article appears in: Investing , Commodities

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