By Mark Cotton, MarketWatch
Jan 13, 2006
U.S. stocks ended mixed Friday, in a week which saw the Dow Jones
Industrial Average breach 11,000 for the first time in four and a half
years, but profit warnings from a number of blue-chip companies cast a
cloud on the upcoming earnings season.
The Dow industrials fell 2.49 points to 10,959.87. On the week, the
benchmark index ended virtually unchanged.
The Nasdaq Composite Index put in a fractional gain, up 0.35 point at
2,317.04. The tech-rich posted a weekly gain of 0.5%.
The S&P 500 Index was up 1.55 points at 1,287.61. The broad gauge is down
0.2% on the week.
On Friday, investors juggled with good news on wholesale inflation, but
also a profit warning from Tyco International, a formal probe for
International Business Machines and a lower revenue forecast from Lucent
Technologies.
Over the week, investors also had to deal with disappointing results from
Alcoa Inc., and profit warnings from DuPont and Phelps Dodge.
For Owen Fitzpatrick, head of U.S. equity group at Deutsche Bank, the
spate of poor results and earnings outlooks from a number of companies
this week is not a major cause for concern.
"On the earnings front, we've had a couple of disappointments but they
seem isolated to certain sectors. People are still optimistic we're going
to have a decent earnings season, with 14% growth year over year."
The New York Stock Exchange is closed on Monday for Martin Luther King
Day. In next week's holiday-shortened week, Citigroup, J.P. Morgan Chase &
Co., Caterpillar Inc., Yahoo Inc., eBay Inc. and Motorola Inc. are some of
the companies of note set to report their quarterly results.
On the broader market for equities, advancers had an 9 to 7 edge over
decliners on the New York Stock Exchange, and led by 16 to 13 on the
Nasdaq.
By sector, semiconductor stocks, airlines and software makers put in some
of the most significant declines.
On the upside, energy and oil services stocks posted solid gains.
Volume was 1.56 billion on the Big Board, and 1.77 billion on the Nasdaq.
Inflation, retail sales and inventory data
The Labor Department reported that prices of raw materials and other
producers' inputs jumped 0.9% in December, marking the biggest gain since
September.
However, excluding food and energy costs, the core PPI rose a modest 0.1%.
Economists polled by MarketWatch were expecting the December PPI to rise
0.5% and the core rate to rise 0.2%.
Retail sales, meanwhile, increased a seasonally adjusted 0.7% in December
as auto and gasoline sales strengthened, the Commerce Department said.
Excluding the 2.6% gain in auto sales, seasonally adjusted retail sales
rose 0.2% in December.
Taking past month revisions into account, retail sales were slightly
stronger than the 0.9% gain expected by economists surveyed by
MarketWatch.
Also, U.S. business inventories increased 0.5% in November, while sales
grew a tepid 0.1%, the Commerce Department reported. Economists expected
inventories to increase 0.4% in November, according to a survey conducted
by MarketWatch.
Oil, dollar, gold, bonds
Crude futures ended with a slight loss for the session, and for the week,
following increases in U.S. supplies of heating oils and gasoline.
The benchmark February contract was down 2 cents at $63.92 a barrel in New
York trading. For the week, the contract shed 29 cents, or 0.5%. The
market closed early ahead of the long weekend, with the market closed for
Martin Luther King Day on Monday.
The dollar fell after the relatively tame inflation report, which implied
that the U.S. may be nearly done with its interest rate increases.
The dollar fell 0.3% to 114.19 yen as the euro rose 0.7% to $1.2133.
Gold futures ended at their highest level in 25 years. The benchmark
February contract was $7.70 for the session at $557 an ounce. It was up
$15.80 from the week-ago close.
In a holiday-shortened session on the bond market, Treasury prices ended
higher, taking yields lower, on the benign core data in the wholesale
inflation report.
The benchmark 10-year Treasury was up 14/32 at 101 6/32 with a yield of
4.35%, down from 4.41% in late trade Thursday.
Stocks in view
Dow component IBM shares dipped 40 cents to $83.17. The company late
Thursday said the SEC's informal probe into IBM's disclosures of its
expensing of equity compensation is now a formal investigation.
General Motors, also in the Dow, fell 59 cents to $20.37 as the carmaker
pledged improved results for 2006, but declined to provide a specific
financial outlook for the year, citing a number of uncertainties that
could affect its business. These include issues with parts supplier
Delphi, the potential sale of a stake in GMAC, its financing arm and the
timing of the implementation of a new healthcare agreement with the United
Auto Workers Union.
Shares in Hewlett-Packard Co. ended near a five-year high, up 2.8% at
$31.90, after Goldman Sachs upgraded the computer and printer maker to
outperform from in-line, given improvements in all of the company's
businesses.
Shares in American International Group slipped 21 cents to $70.05 as it
appears poised to settle a number of civil-fraud investigations linked to
improper accounting maneuvers in recent years to polish its results.
Tyco tumbled 10.5% at $27.12 amid a negative response to the lowered
outlook and questions about the split into three companies.
Lucent was off 2.2% at $2.65. The company cut its 2006 outlook, citing
sales in the U.S. and China.
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This MarketWatch news update is provided to you courtesy of Thomson
Financial. The information herein is believed to be true and accurate. We
take no responsibility for inaccurate information and reserve the right to
update our reports. If you have any questions please e-mail James Sang at
james.sang@thomson.com or call 646.822.6233. For more information about
Thomson Financial visit us at http://www.thomson.com/financial.
SOURCE Thomson Financial Corporate Group
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