Stocks turned positive at mid-session after a new report showed
a jump in industrial production in December by the the biggest
amount in five months, suggesting that the economic recovery has
momentum going into the new year.
The report offset disappointing data on US business inventories
and consumer sentiment. Inventories rose less than expected,
showing that demand for goods could be stabilizing, and consumer
sentiment unexpectedly declined in a preliminary sampling by
Thomson Reuters and the University of Michigan. The index came in
at 72.7, down from 75.2 the month before and below expectations for
an increase to 76.0.
Output of the nation's factories, mines and utilities rose 0.8%
last month, the Federal Reserve said. Overall industrial activity
is up 11% since hitting its recession low in June 2009. But it is
still 6% below its Sept. 2007 peak.
Meanwhile, U.S. business inventories rose 0.2% in November, the
Commerce Department said, below economists' expectations. Sales at
U.S. businesses rose 1.2%. The inventory-to-sales ratio, an
indication of demand, fell to 1.25 in November from 1.27 in
October. Economists surveyed by MarketWatch were expecting
inventories to rise by 0.5% in November.
Also, Lackluster retail sales reports also contributing to
profit-taking ahead of the three-day Martin Luther King Jr. holiday
weekend. Sales rose 0.6% last month to $381 billion, less than
analysts expected, although a 13.5% gain over the recession low in
Dec. 2008. On the year, sales rose 6.7% over last year, the biggest
annual increase since 1999.
Overseas, China raised bank reserve requirements in a move
widely interpreted to indicate the government is determined to cool
In company news:
Shares of Abbott Laboratories (
) are down after a Wall Street Journal report that it withdrew its
U.S. and European applications for an experimental drug called
briakinumab. The firm developed to treat a skin condition called
psoriasis,. Abbott said regulators could want more research..
With shares of most semiconductor makers soaring after Intel's (
) blow-out results last night, chip equipment suppliers such as
Cymer Inc. (
) and Varian Semiconductor Equipment ssociates Inc. (
) also are up sharply this morning.
ADRs of Smith & Nephew (
) are down after the maker of knee and hip replacements said its
not in talks that could lead to a merger or takeover, Bloomberg
reports. The UK's Daily Telegraph reported that the company is
going to start informal negotiations with Biomet. "Smith &
Nephew has a long-standing policy of not commenting on press
speculation, unless there is a regulatory obligation to do so,"
Smith & Nephew said in a statement.
Apple (AAPL) and News Corp. (NWS) are delaying the launch of the
latter's digital newspaper for the iPad, according to a report in
The Wall Street Journal, citing people familiar with the matter.
The newspaper, called The Daily, was supposed to be released next
Wednesday. Both have reportedly decided they need more time to test
Shares of Citigroup (C) are higher following news that the bank
will sell warrants this quarter in bank, Bloomberg reports. The
warrants were given to taxpayers in return for bailing out the bank
during the financial crisis. The warrant sale "would represent
Treasury's disposition of its remaining holdings," the Treasury
Department said in a statement.
Borders (BGP) is up by double digits after the New York Times
reports the company may be close to securing refinancing from GE
Capital and other lenders.
Shares of Chevron (CVX) are up as the oil major resumed flow
through its pipeline in the southern Niger River delta in Nigeria a
month after it was overtaken by militants, Bloomberg reports. The
line that was impacted os fixed and operations there have returned
to normal, a Chevron spokesman noted.
CVS Caremark (CVS) has been sued by North Carolina pharmacies,
which have alleged that CVS violated the North Carolina Pharmacy of
Choice Act, as well as committing unfair and deceptive business
The Trans Alaska Pipeline is set to be shut down today to
install a bypass on the system, which was shut down earlier this
week due to a leak. The leak force BP (BP), ConocoPhillips (COP)
and Exxon Mobil (XOM) to suspend 95% of production from Alaska's
North Slope area.
Gold Resource Corp (GORO) is off sharply, giving back all of
yesterday's gains -- and then some -- following CEO William Reid's
appearance Thursday on CNBC. Today's decline also is likely due to
the 2% fall in gold prices today.
In earnings news:
--Coinstar (CSTR) has shed nearly a quarter of its market value,
after saying Q4 EPS and revenues would be well below its prior
--JPMorgan Chase (JPM) shares are higher after it reported Q4
EPS of $1.12 per share, up from $0.74 per share in the year ago
quarter. Revenue was $26.7 billion, up from $25.2 billion a year
ago. The analyst consensus was $1.00 per share in earnings on
revenue of $24.3 billion, according to Thomson Reuters.
--Hasbro Inc. (HAS) is down about 3% this morning after the toy
company said Q4 and full-year revenues will fall about $100 mln
short of the Thomson Reuters average by analysts.
Commodities are lower. February gold contracts are down $29, or
2.08%, to $1,358 an ounce while February crude oil contacts are
down 0.32%, or $0.29, at $91.14 a barrel.
In energy ETFs, the United States Oil Fund (USO) is up 0.1% to
$38.68 and the United States Natural Gas fund (UNG) is up 0.5% to
In precious metal ETFs, the SPDR Gold Trust (GLD) is down 1.05%
to $132.64. Market Vectors Gold Miners (GDX) is down 2.3% to
$54.76. iShares Silver Trust (SLV) is down 1.39% to $27.61.
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