Stocks Hold Gains at Mid-Day as Investors Eye Personal Income Gains, Fed Comments
Stocks are holding gains but off highs at mid-day as new data showed the economic recovery is holding steady with personal incomes rising, corporations continuing to purchase goods and services and Fed officials offering reassuring words.
The Chicago PMI, rose to 71.2 from 68.8 in January, which came in well above the 67.7 forecast by economists. The reading fell just below the 71.5 hit in July 1988. A reading above 50 indicates expansion.
The US Commerce Department said personal income rose a seasonally adjusted 1.0% in the first month of 2011, while consumer spending rose a smaller 0.2%. Other figures showed inflation in check.
Adding to the mix were comments from the Fed's William Dudley. He said the economy is showing signs of life, although the Fed plans to continue its stimulus effort. At the same time, he said the central bank won't let inflation get a foothold. Separately, St. Louis Fed President James Bullard said the U.S. economy should do well in 2011 and that higher oil prices won't slow the recovery.
But January pending home sales fell 2.8% from a downwardly revised 3.2% in December. December was previously reported up 2%. The January figure was close to expectations, according to Marketwatch.com.
In company news:
Shares of Johnson & Johnson ( JNJ ) is up 1.76%, after Bloomberg reported the health care products giant was sued by a high school teacher in Tasmania over an implanted hip-replacement device that stopped selling in Australia due to defects. J&J allegedly broke Australia's trade law when it sold an unit product and were negligent, the report said, citing the legal papers.
Shares of JPMorgan Chase ( JPM ) are higher after a report in the Financial Times this weekend that the investment bank is in talks to acquire a 10% stake in the micro blogging service Twitter for $450 million. The report cited people familiar with the plans. The move follows a similar move by Goldman Sachs ( GS ) to acquire a stake in social networking site Facebook.
Magic Software ( MGIC ) is up after it says its business partner, Elad Software Systems, will migrate the Israeli Ministry of the Interior's current applications to uniPaaS. uniPaas is MGIC's software solution.
Meanwhile, Mylan Inc. ( MYL ) is higher, helped by positive news from its subsidiary, Matrix Laboratories, Ltd. Matrix has received final approval from the U.S. FDA for its Abbreviated New Drug Application (ANDA) for Gabapentin Capsules USP, 100 mg, 300 mg and 400 mg, the generic version of Pfizer's Neurontin Capsules used to treat a painful complication of shingles. Gabapentin Capsules had U.S. sales of approximately $300 million for the 12 months ending Dec. 31, 2010, according to IMS Health. the drug-maker is launching this product immediately.
Shares of Motorola Mobility (MMI) are higher and Reuters reports the company sued TiVo (TIVO) for infringing patents it holds for digital video recorders. Motorola reportedly said is looking to protect its interests after TiVo sued Verizon (VZ) for patent infringement.
ConocoPhillips (COP) is up after the oil giant reported that a "power dip" caused flaring at its Wood River refinery in Illinois. Based on a filing with state regulators, the flaring of sulfur dioxide yesterday was sparked by the power drop in a distilling wet gas compressor, Bloomberg reported.
Amazon.com (AMZN) is down this morning after it was downgraded by UBS over concerns that increasing costs will put new pressure on margins. Analyst Brian Pitz dropped the stock to "neutral" from "buy," and lopped his target to $180 from $195.
In earnings news:
--ADRs of U.K. banking giant HSBC Holdings PLC (HBC) are lower after the company said its 2010 net profit more than doubled to $13.16 billion, below expectations. The latest results followed a profit of $5.83 billion in 2009, but were still below the $14.02 billion consensus forecast of analysts as the group also cut its target for return on equity.
--Shares of Kenneth Cole (KCP) are down 10.59% today after the company announced the departure of Jill Granoff as CEO, effective immediately. According to the company, Granoff's departure as CEO was by mutual decision. Granoff also resigned from the board. Chairman and Chief Creative Officer Kenneth Cole will serve as interim CEO. The company also reported its fourth quarter results, posting a narrower quarterly loss. The company attributed the sales growth to an increase in licensing revenues.
Commodities are mixed. April gold contracts are up $5, or 0.38%, to $1,415 an ounce while April crude oil contacts are up 0.31%, or $0.36, at $97.52 a barrel.
In energy ETFs, the United States Oil Fund (USO) is down 0.66% to $39.42 and the United States Natural Gas fund (UNG) is up $0.06, or 1.16%, to $5.42.
In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.34% to $137.85. Market Vectors Gold Miners (GDX) is up 1.02% to $59.55. iShares Silver Trust (SLV) is up 1.47% to $33.04.