How The Parmalat Scandal Affected One US Company
Stocks
were mixed in thin trading, with a selloff in the last half hour of trading.
January saw $20B in inflows — three times the pace in the
fourth quarter. Portfolio managers bought $11B in stock in December. Two-thirds
of the companies in the S&P have reported earnings with 73% of them beating
estimates.
The Institute
of Supply Management index rose by 0.2 to 63.6 — the best number since
1983. President Bush sent Congress a $2.4 trillion budget for 2005, including
cuts in domestic programs and increased military spending which would increase
by 7%, excluding money needed to keep troops in Iraq that will create a $521
billion deficit. Bush’s $401.7 billion military budget increases spending on
missile defense and on modernizing the Army, and companies such as Lockheed
Martin
(
LMT |
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News |
PowerRating), General Dynamics
(
GD |
Quote |
Chart |
News |
PowerRating), Raytheon
(
RTN |
Quote |
Chart |
News |
PowerRating), and Northrup Grumman
(
NOC |
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Chart |
News |
PowerRating) and Boeing
(
BA |
Quote |
Chart |
News |
PowerRating) stand to benefit from the increased spending.
Dow Component International
Paper
(
IP |
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Chart |
News |
PowerRating) reported fourth-quarter earnings of $48 million on sales of
$6.5 billion. Halliburton
(
HAL |
Quote |
Chart |
News |
PowerRating) is under investigation once again for
overcharging the US military for the number of meals it served in Kuwait. The
company’s contractor billed 42,042 meals a day on average, but served only
14,053 meals, a monthly price difference of $3.5 million.
| Dow | +11.11 |
10499.18 |
| S&P 500 |
+4.13 | 1135.26 |
| Nasdaq | -3.00 | 2063.15 |
The day’s leading sectors were
Biotechs
(
BTK.X |
Quote |
Chart |
News |
PowerRating) +1.65%, Telecoms
(
XTC.X |
Quote |
Chart |
News |
PowerRating) +1.54%,
Insurance
(
IUX.X |
Quote |
Chart |
News |
PowerRating)
+1.37%, and Healthcare
(
HCX.X |
Quote |
Chart |
News |
PowerRating) +1.37%.
Weak today were Airlines
(
XAL.X |
Quote |
Chart |
News |
PowerRating) -1.88%, and
Semis
(
SOX.X |
Quote |
Chart |
News |
PowerRating) -1.63%.
Economic news releases included
Personal income up 0.2%, with Personal Spending up 0.4%, both in line with
estimates. Construction spending numbers were disappointing at +0.4% and the ISM
index rose to 63.6.
10-year Notes were -05
at 113 120
The dollar
was +0.33 at 87.53
Gold was -4.39 at 397.70
Crude Oil was +1.80 at
34.85
Volume was
1,578,099,000 on
the NYSE, and 1,899,730,000 on the Nasdaq.
Market breadth was positive.
| NYSE | Issues | |
| Advancing | 1723 | Up Vol 773 |
| Declining | 1544 | Down Vol 641 |
| Ratio | 1.11 | 1.20 |
| Nasdaq | ||
| Advancing | 1491 | Up Vol 784 |
| Declining | 1717 | Down Vol 941 |
| Ratio | 1.15 | 1.20 |
Stocks in the news:
After the close, J2Global
(
JCOM |
Quote |
Chart |
News |
PowerRating) reported Q4 that beat by a
penny; Incyte Genomics
(
INCY |
Quote |
Chart |
News |
PowerRating) beat by .10; revenues fell 53%
year/year; the company said it will its workforce. Aflac
(
AFL |
Quote |
Chart |
News |
PowerRating)
reported in-line on light revenues, and announced a dividend increase as well as
a stock buyback. Earnings were negatively impacted by large holdings in Parmalat.
Aflac sold its stake in Parmalat in December; it lost $257M on the sale.
Ford
(
F |
Quote |
Chart |
News |
PowerRating) was downgraded by Deutsche Bank
to sell on a loss of confidence in Ford’s ability to meet its mid-decade
earnings. The auto maker’s price target was also lowered, to $12.
ScanSoft
(
SSFT |
Quote |
Chart |
News |
PowerRating) jumped 10% on raised
fourth-quarter earnings and revenue numbers. It now expects to earn 5 cents a
share on revenue of $46 million. The company cited strong sales of its
SpeechWorks and imaging products.
Time Warner Telecom
(
TWTC |
Quote |
Chart |
News |
PowerRating) reported a
fourth-quarter loss of $21.3 million on revenue of $169.4 million, due to lower
revenue from WorldCom and a decrease in inter-carrier fees.
Boston Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating) reported
fourth-quarter earnings of $137 million on revenue of $939 million, well ahead
of analysts’ consensus.
bricew@tradingmarkets.com