Thursday was essentially a mixed day on all fronts and the major indexes ended the day flat. After the bell Wednesday, IBM reported great earnings and offered positive guidance for the second consecutive quarter. IBM is one of a few large-cap tech stocks to handily outperform the NASDAQ this year (+15% vs. -10%).
Shares of Nokia got slaughtered – down 14% – after the company missed analysts’ profit estimates and forecasted slower demand for handset devices this year. Nokia is based in
Merrill Lynch reported a $2B quarterly loss, steeper than analysts had predicted, but the stock finished the day up 4%. The company reported a loss of $2.19 per share vs. the consensus estimate of a $1.96 loss. Adding to Merrill’s troubles were a $6.5B write-down and an announcement of an additional 3000 job cuts. Investors were pleased to see Merrill coming clean and the stock rallied off this bad news. Also helping the financials was an announcement from JPMorgan that it plans to raise $6B of hybrid capital.
A poor earnings report from Pfizer was weighing down the market. The company earned 61 cents per share while analysts were looking for 66 cents. The big news was that sales of its biggest drug, Lipitor, declined 7%. Pfizer has already eliminated 10,000 jobs in a massive cost-cutting program and said it plans to lay off more workers. PFE has been struggling the past few years to come up with a new blockbuster drug and the only thing going right for the company is its robust 6% dividend yield.
In economic news, jobless claims last week rose by 17,000 to 372,000, but less than analysts predicted. Also, the “number of workers remaining on jobless benefits rose to 2.98M…which was the highest since June 2004.” The Philly Fed Index fell to -24.9, down from last month’s reading of -17.4. This reading marks the largest contraction since 2001.
Agriculture stocks were a relative laggard as most of these stocks pulled back after Wednesday’s monster rally. There was very little news to spark this selling, so the best bet is investors were taking some profits.
DJIA 12,620.49 +1.22 (+0.01%)
Nasdaq 2,341.83 -8.28 (-0.35%)
S&P 500 1,365.56 +0.85 (+0.06%)
NYSE Volume 3,688,557,000
2-Yr Bond 2.13% +0.15
10-Yr Bond 3.75% +0.03
30-Yr Bond 4.54% unch
Crude Oil (May) 114.86 -0.07
Nat Gas (May) 10.383 -0.050
Gold (June) 942.90 -5.40
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