What Will These Earnings Do To Stocks Tomorrow?

  • January 31, 2005
  • Brice Wightman

Stocks were higher on
M&A news and a fairly peaceful Iraqi election. Also, oil is lower, as
OPEC did not change output quotas at its meeting yesterday. Crude slid
below $47/barrel. Given the good news, some traders were expecting a larger
rally. Volume was moderate.

SBC is buying  AT&T for $16 billion. SBC will issue .77942
shares for each T share and a $1.30 special dividend when the deal closes.

ExxonMobil
(
XOM |
Quote |
Chart |
News |
PowerRating) reported Q4 earnings of $8.42
billion–beating by 0.25–helped by higher crude prices.

Marsh & McClennan
(
MMC |
Quote |
Chart |
News |
PowerRating) agreed to pay $850 million to settle
charges it took payoffs from insurance companies in return for referring
clients.

Personal income for December rose +3.7%, above
estimates, and personal spending rose +0.8%, slightly below estimates. The
income gain would have been smaller if not for the one-time $3/share Microsoft
dividend paid on December 2. December new home sales rose 0.1%.

Here are the major index numbers for January:

Dow Utilities   
+2.4%

S&P 500        
-2.7%

Dow               
-2..8%

Russell 2000    -4.9%

Nasdaq          
-5..3%

Dow Trans.      -6.0%

In sector action for January:

Oil Services     +4.3%

HMOs            
+3.9%

Airlines          
  -19.7%

Telecom          
 -7.4%

REITs            
   -9.5%

Trading trivia: February is historically one of
the worst months of the year. Interestingly, with the exception of 2001, the
last 13 post-election years have been down; this, according to The Stock
Trader’s Almanac. January has been down four of the last six years.

Disney
(
DIS |
Quote |
Chart |
News |
PowerRating) reported after the bell,
0.34 vs. a 0.29 estimate. Revenues were $8.67 billion vs a $8.59 billion
estimate.  Ariba
(
ARBA |
Quote |
Chart |
News |
PowerRating) missed by 0.02 and missed on revenues.
Avanex
(
AVNX |
Quote |
Chart |
News |
PowerRating) missed by 0.01. Internet Security
(
ISSX |
Quote |
Chart |
News |
PowerRating)
beat by 0.02.

Tomorrow, look for Google
(
GOOG |
Quote |
Chart |
News |
PowerRating)
after the bell; estimates are 0.79-0.80.

Strong sectors were: Internet
(
GIN.X |
Quote |
Chart |
News |
PowerRating) +1.84% 
Healthcare
(
HMO.X |
Quote |
Chart |
News |
PowerRating) +1.86%  Oil Services
(
OSX.X |
Quote |
Chart |
News |
PowerRating)
+1.55% 

Weak were: Drugs
(
DRG.X |
Quote |
Chart |
News |
PowerRating) -0.46% 
Gold
(
XAU.X |
Quote |
Chart |
News |
PowerRating) -0.20% 

Dow +62.74 10,489.94
S&P 500 +9.90 1181.26
Nasdaq +26.58 2062.41

The dollar was +0.09 at
83.59

Crude Oil was +1.04 at
48.22

Gold was -1.20 to 422.10

ce=”Arial” size=”2″ face=”Arial”>Volume was 1.67 billion on the NYSE and
1.8 billion on the Nasdaq.

Market breadth was positive.

NYSE Issues
Advancing 2536 Up Vol 1117
Declining 811 Down Vol 352
3.12 3.17
Nasdaq
Advancing 2189 Up Vol 1304
Declining 927 Down Vol 365
2.36 3.57

Stocks in the News

Lockheed Martin
(
LMT |
Quote |
Chart |
News |
PowerRating) won the contract to make
Marine
One and also won a $208 million Navy contract for Aegis missiles..

The FDA approved Mylan’s
(
MYL |
Quote |
Chart |
News |
PowerRating) generic pain patch.

Wyeth
(
WYE |
Quote |
Chart |
News |
PowerRating) reported a Q4 loss after taking a $4.5 billion charge
related to its recalled fen-phen diet drug.

Tyson
(
TSN |
Quote |
Chart |
News |
PowerRating) missed by 0.13 and lowered 2005 guidance.

Brice Wightman