What’s the Story?

by CC February 7, 2012 9:35 am • Commentary

Yahoo Finance

The relatively tepid tone comes as many market participants await some sort of official development from Greece, which continues to grapple with the acceptance and implementation of new austerity measures. The flagging country’s efforts come as it seeks a bailout that will help prevent a default. As has been the case for weeks, there is chatter this morning that a final agreement is forthcoming. That has helped the euro run ahead to a 0.5% gain against the greenback after the currency had been flat earlier this morning. Corporate news continues to be of little consequence to the broad market, although Dow component Coca-Cola (KO 68.44, +0.41) has won itself some support following an upside earnings surprise. The economic calendar features a testimony from Fed Chairman Bernanke to the Senate Banking Committee at 10:00 AM ET and monthly consumer credit data at 3:00 PM ET.


The dollar turned down against the euro on Tuesday following reports that Greek government officials were putting together a detailed final document on a loan deal with international creditors ahead of a meeting of political party leaders later in the day. The dollar index DXY -0.28% , which measures the U.S. currency against a basket of six units, turned down to 78.904, from as high as 79.265 and 79.064 late Monday in North America. The euro EURUSD +0.48% rose to $1.3174 compared to $1.3124 Monday.


UBS AG, Switzerland’s biggest bank, said fourth-quarter profit dropped 76 percent after its investment bank reported a second consecutive quarterly loss.

Net income fell to 393 million Swiss francs ($427 million) from 1.66 billion francs in the year-earlier period, the Zurich- based bank said in a statement today. Earnings missed the 721 million-franc average estimate of eight analysts surveyed by Bloomberg over the past four weeks.

Chief Executive Officer Sergio Ermotti, who took over from Oswald Gruebel following the discovery of a $2.3 billion loss from unauthorized trading in September, is shrinking the investment bank as stricter capital requirements and the European sovereign debt crisis curb profitability. The bank said concerns about the crisis and the global economic outlook are “likely” to affect revenues this quarter as well.

“They basically gave a profit warning for the first quarter,” said Dirk Becker, a Frankfurt-based analyst at Kepler Capital Markets, who has a “reduce” rating on UBS. “I don’t see how the bank can come out of the strategic dilemma of not having enough revenues to sustain staff at the investment bank. Cutting risk-weighted assets won’t help there.”


Coca-Cola’s fourth-quarter earnings fell 71% from a year-earlier period that included a large gain from the purchase of some bottling operations, but shares gained 1.3% to $68.90 in recent premarket trading as the soda giant’s case volume continued to rise.

Yum Brands’s fourth-quarter income rose 30% as the fast-food company’s sales in China continued to grow, and U.S. sales improved. Shares were up 2.1% premarket at $64.50 as earnings and revenue beat estimates.

Becton Dickinson’s fiscal first-quarter earnings fell 17% on higher raw materials costs and expenses from recent acquisitions as the medical-device maker’s revenue edged up slightly. Shares dropped 0.8% to $79.89 premarket as the company also lowered its full-year earnings estimate on flat revenue to reflect the impact of a strengthening U.S. dollar.

Emerson Electric’s fiscal first-quarter profit fell 23% as sales took a hit from supply chain disruptions and economic uncertainty that led customers to pare back inventories. Shares fell 2.6% to $52 premarket.

NCR Corp. swung to a fourth-quarter loss as write-down and pension charges weighed on results, though core earnings improved from the year earlier. The company also agreed to sell assets of its entertainment business to Coinstar for $100 million. NCR shares jumped 7.7% premarket to $20.50, while Coinstar surged 18% to $59.60 as its fourth-quarter earnings more than doubled.

PMC-Sierra’s fourth-quarter earnings more than doubled as the chip maker booked a big tax recovery. However, shares were down 6.1% to $6.33 premarket as revenue declined.

ViroPharma said the U.S. Food and Drug Administration has rejected its proposal to expand manufacturing of Cinryze, its treatment for angioedema — a type of swelling similar to hives. Shares dropped 5.6% to $28.80 premarket.

InterDigital forecast downbeat first-quarter revenue, saying the projection reflected a shift in market share. Shares dropped 5.3% to $38.50 premarket.

Central European Distribution said it is reviewing the latest offer from shareholder Russian Standard Corp. for a strategic alliance that would expand the wine and spirits distributors’ collective reach. Shares fell 2.2% to $5.78 premarket.

Anadarko Petroleum swung to a fourth-quarter loss on Deepwater Horizon disaster-related settlement charges and asset write-downs. Adjusted earnings and revenue beat expectations.

BRE Properties’s fourth-quarter earnings soared as a profitability metric for the real-estate investment trust improved and as charges related to the extinguishment of debt weighed on year-ago results.

Cadence Pharmaceuticals said it is voluntarily recalling one lot of its Ofirmev injection after an unidentified particle was found in one of the lot’s vials during routine stability testing.

Church & Dwight’s fourth-quarter earnings rose 36% as the consumer-products maker posted better-than-expected sales growth despite intense price competition.

Gentiva Health Services said it now expects the impact of an unfavorable Medicare ruling to push it out of compliance with its financial covenant ratios this year, a prediction it offered as it also reported its fourth-quarter profit slumped 71% from a year earlier.

Leggett & Platt’s fourth-quarter earnings fell 72% as the diversified manufacturer’s bottom line was hurt by a restructuring charge and weaker margins.

Plains Exploration & Production’s daily sales volume climbed 13% in the fourth quarter, including 12% growth in oil and liquids volume, driven by a strong performance in the Eagle Ford and Haynesville shale regions.

Scotts Miracle-Gro Co.’s fiscal first-quarter loss widened as the lawn-and-garden products company was hurt by weak sales volume and commodities cost pressures.

Unum Group swung to a fourth-quarter loss as the insurer’s decision to discontinue group long-term care policies triggered heavy charges, though both its main business segments reported stronger profits.