Tuesday, January 29, 2013

Dow climbs to a 5 year high on earnings reports

Dow rose 72, advancers ahead of decliners 3-2 but NAZ slid a fraction.  The Financial Index inched up 1 to the 235s.  The MLP index climbed 1 to the 428s (up almost 50 in Jan) & the REIT index inched up pocket change to the 281s.  Junk bond funds slid lower & Traesuries also sold off.  Oil gained 1 to the 97s while gold advanced 10 to 1662.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


Bernanke Talks About Fed Policy in Michigan

Photo:   Bloomberg

Big Ben's latest round of bond buying will probably reach more than $1.1T before the program ends in Q1 2014.  He will push on with purchases of $40B of mortgage bonds a month & $45B a month of Treasuries, although some FED officials warn his unprecedented balance-sheet expansion will impair efforts to tighten policy when necessary.  The FMOC should renew its commitment to asset buying during a 2-day meeting that began today, after determining the benefits from the program exceed any risk of inflation or financial instability.  Bernanke has said the policy will continue until there are “substantial” gains in employment.  But FED officials have a brighter outlook for the economy than many private economists.  FOMC participants forecast growth this year ranging from 2.3-3.0%, while economists have a median estimate of 2%.  Stay tuned for tomorrow's post meeting announcement.

Bernanke Seen Buying $1.14 Trillion in Assets in 2014

Pfizer Forecasts Full-Year Profit Higher Than Analyst Estimates
Photo:   Bloomberg

Pfizer, a Dow stock,  Q4 results easily beat expectations as profit more than quadrupled, due to tighter spending & a $4.8B gain from selling its nutrition business.   Those boosts offset competition from generic drugs hurting sales of Lipitor & other medicines.   EPS was 85¢, up from 19¢ a year earlier.   Excluding the windfall from selling its nutrition business for $11.5B, & a total of $888M for restructuring, legal & other one-time items, EPS was 47¢ or 3¢ better than forecast.   Revenue fell 7% to $15.1B, mainly due to generic competition to anti cholesterol Lipitor, above the forecast of $14.3B.   PFE expects 2013 EPS of $2.20-$2.30, excluding one-time items, & revenue of $56.2-$58.2B.   Analysts are forecasting EPS of $2.28 on revenue of $57.5B.  In Q4, Lipitor sales plunged 91% in the US & 71% worldwide, to $584M.   Altogether, generic competition reduced prescription drug revenue by more than $2.1B & unfavorable currency exchange rates lopped off another 2%, or $271M.   However, several key newer drugs had double-digit sales increases, including fibromyalgia & pain treatment Lyrica, at $1.13B, painkiller Celebrex at $750M, & the Prevnar 13 vaccine against meningitis & other pneumococcal infections, at $993M.  Viagra was up 6% at $553M.  The stock rose 86¢.

Pfizer Forecasts Annual Profit Higher Than Estimates on Two New Products

Pfizer (PFE)

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Yahoo Beats Analysts’ Sales Estimates on Advertising-Price Gains

Photo:   Bloomberg

Yahoo reported Q4 revenue that topped estimates & increased annual sales for the first time since 2008 as it benefited from buoyant demand for online search.  Q4 EPS, excluding some items, was 32¢ & sales (excluding revenue passed to partner sites) rose 4% to $1.22B.  Analysts were looking for EPS of 28¢ on revenue of $1.21B.  CEO Marissa Mayer said she expects to build on the gains by getting users to spend more time on a dozen popular sites, including mail & Yahoo Finance.  Still, forecasts for this qtr & the full year fell short of predictions, underscoring the challenge she faces in display advertising.  The stock was off 61¢.

Yahoo Sales Top Analysts’ Estimates After Rising for First Time Since 2008

Yahoo (YHOO)

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Stocks resumed their flight to heavens, led but MLP index which is having its best month in history.  Meanwhile, treasury yields are at their highest levels in 8 months.  Risk averse is not an issue in today's markets.  Of little notice, oil is approaching $100 & that has been a troublesome level in the past.  Stocks buyers are not worried.  Maybe they're hoping Big Ben will announce tomorrow that the FED will throw more money at the markets.  The Dow is already up 850 in Jan.  The new month is almost here & that should bring more attention to the debt mess in DC & how little has been done because the 2 sides remain deeply divided.

Dow Jones Industrials

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