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Stocks Advance Ahead of Fed's Beige Book; Portugal Debt Offering Eases Short-Term Europe Concerns

By: MT Newswires
Posted: 1/12/2011 12:30:00 PM
Referenced Stocks: AAPL;AIG;MRK;MSFT;PRXL

Stocks are firmly positive at mid-day as financials lead the broader market higher after Portugal cleared a major hurdle with a better-than-expected bond offering, easing worries, at least for the short-term, about its debt crisis. The Fed will provide the next impetus when it releases its Beige Book later today.

Stocks also are also getting support from government data showing December import prices up a stronger-than-expected 1.1%. Eyes are now looking ahead to the 2 p.m. release of the Federal Reserve's Beige Book on current economic conditions from each of its districts around the country.

In company news:

Shares of American International Group Inc. ( AIG ) are down amid reports the insurance giant is selling its Taiwan life insurance unit to Taiwan's Ruen Chen Investment Holdings Ltd. for $2.16 billion.

Shares of Merck & Co. ( MRK ) are higher after the company announced this morning that it is teaming up with PAREXEL International ( PRXL ) to provide a range of regulatory and clinical services to Merck BioVentures, a division of Merck which specializes in delivering of high quality biosimilars to the patients. The move is the latest indication that pharmaceutical companies and biotech companies are interested in the nascent market of biosimilar medications.

Microsoft ( MSFT ) is engaging Apple ( AAPL ) in a fight over the latter's move to trademark "App Store", saying it would be unfair for one company to use a phrase that is already being used by many technology groups, the Financial Times reports. Apple applied to have the term trademarked in 2008 close to the time it launched the store. Microsoft pointed out in a patent office filing that the term is too generic to trademark.

ADRs of Bayer (BAYRY) are higher after the company said it is determined to enforce its intellectual property after the European drug maker failed in its attempt to secure royalties from Abbott Laboratories (ABT) over US sales of Abbott's arthritis drug Humira, Bloomberg reported. Bayer sued Abbot in 2008 for violating its intellectual property rights and conceded in a court filing today that--as the judge overseeing the case interpreted it--Humira does not infringe on its IP.

Security software maker Trend Micro (TMICY) said that Google's (GOOG) Android operating system for mobile devices is more vulnerable to hackers than Apple's ( AAPL ) iPhone operating system, Bloomberg reports. Android, an open source operating system, can allow hackers to understand the underlying architecture and source code, Trend Micro CEO Steve Chang notes.

Meanwhile, Barclays (BCS) ADRs are higher after Barclays Capital said it is eliminating about 200 jobs in the UK following an internal review, Bloomberg reported, citing a person with knowledge of the plans.

Shares of Trans Alaska Pipeline co-owners ConocoPhilips (COP), BP (BP) and Chevron (CVX) are higher after the pipeline system, which was shuttered over the last several days due to a leak, resumed operations on an interim basis late Tuesday, according to several reports.

The move to restart the pipeline will assist North Slope producers in Alaska to increase production. CVX is up 0.9%. COP is up 0.8%. BP is up 1.3%.

JP Morgan Chase (JPM) is higher after CEO James Dimon told CNBC that he "would like" to boost the company's dividend, Bloomberg reports. He didn't give a timetable, although he said he hoped the action could be taken in Q2. He did not specify an amount.

In the latest earnings news:

--Lululemon (LULU) is higher after it said late Tuesday it expects Q4 EPS between $0.55 to $0.57, better than the analyst consensus of $0.50 on Thomson Reuters. Revenue is seen between $237 to $239 million, above Street estimates of $221 million.

--Big Five Sporting Goods (BGFV) is higher, despite cutting its profit forecast for the fourth quarter, yesterday, to range of 23 cents to 25 cents. That is down from 25 cents to 33 cents. Analysts currently estimate EPS of 30 cents a share.

--Golfsmith (GOLF) reports preliminary Q4 revenue was $72.9 mln, better than the two analysts' estimates of $66 mln on Thomson Reuters.

Commodities are mixed. February gold contracts are down $5.6, or 0.41%, to $1,379 an ounce while February crude oil contacts are up 0.91%, or $0.83, at $91.94 a barrel.

In energy ETFs, the United States Oil Fund (USO) is up 0.36% to $39.02 and the United States Natural Gas fund (UNG) is up 0.36% to $6.13.

In precious metal ETFs, the SPDR Gold Trust (GLD) is down 0.22% to $134.61. Market Vectors Gold Miners (GDX) is down 0.88% to $57.53. iShares Silver Trust (SLV) is down 0.3% to $28.80.