Monday, January 26, 2009

Markets advance on mixed news

Dow rose 89 (but pulling back off its highs) getting further above the 8K floor on mixed news (at best) from Dow stocks, 4 are discussed below. Advancers ahead of decliners 4-1 & NAZ rose 22. The Alerian MLP Index rose 5 to 201, breaking thru the important 200 ceiling. S&P 500 FINANCIALS INDEX, REITs & junk bonds were higher while VIX dropped 2 on easing market fears.

Todays' major Dow stocks:

Pfizer's (PFE) buyout out of Wyeth (WYE) is cheering stocks but not at Pfizer. Pfizer announced terrible earnings, layoffs & a big div cut which will remove it from the S&P 500 Dividend Aristocrat group at year's end (assuming they don't have a whopper extra div later in the year). PFE is down 9% on the news. Their chart below defines dreary.

Pfizer --- 10 years




Caterpillar (CAT) had another dreary earnings report. Q4 earnings were down over 30%. They forecast 2009 sales will $40B instead of $51B while EPS will plunge to $2.50 from $5.66 last year. The div will be earned but it is logical to expect that shareholders will have to share pain along with laid off workers & management salary cuts. The stock is down 2 to the 33s, but off it's lows.


Caterpillar --- 10 years




McDonald's (MCD) reported lower EPS due to a special credit last year. Factoring that item out, they reported a nice gain in Q4 with higher same-store sales in the US & globally. They gave encouraging guidance for 2009, stock up slightly. Their 10 year charts look fairly good, especially considering the depressed state of security prices today.


McDonald's 4Q profit falls due to year-ago benefit

McDonald's (MCD) --- 10 years





Home Depot (HD) is going thru a period of major belt tightening, job cuts & only opening 12 stores in 2009. Markets liked the news, up 1.20. Their 10 year chart is respectable, all considered.

Home Depot (HD) --- 10 years




These 4 are all div payers but will share various degrees of pain in 2009. The stocks should provide excellent rewards going forward, but that involves the long term. In the mean time, they have to deal with major bumps in the road.

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