What’s the Story?

by CC February 9, 2012 9:13 am • Commentary

Yahoo Finance

Stock futures haven’t really shown a response to some rather pleasing data. Initial weekly jobless claims for the week ended February 4 totaled 358,000, which is not only less than the 370,000 claims that had been widely expected, but it is also less than the prior week’s upwardly revised tally of 373,000. However, continuing claims climbed to 3.52 million from 3.45 million. Separately, European Central Bank President Draghi has just begun a press conference. His comments come shortly after headlines were made regarding a deal on austerity measures between Greece’s politicians. An official statement has yet to be made, however.


The long-awaited Greece deal has finally been reached. Here’s reporting from Dow Jones Newswires:

Leaders of the three political parties backing Greece’s caretaker government agreed Thursday on an austerity package to comply with demands set by international creditors for another bailout deal, according to a spokesman for Prime Minister Lucas Papademos’ office.

“An agreement among political leaders has been reached on all matters. A statement will come out shortly,” the spokesman said.

Dow futures, which had been flat prior to the news, popped about 30 points. But those gains are slowly evaporating; Dow futures are currently up 10 points. S&P 500 futures edged up 1 point. Not exactly a face-ripping reaction to a deal that has been expected for weeks.

The euro initially popped after the Greek now but is now only up about 0.1% at $1.325.

Treasurys have dropped. Benchmark 10-year notes were down 7/32 to yield 2.043%. The 30-year bond dropped 21/32 to yield 3.177%


US regulators are preparing to announce a settlement, worth up to $39.5bn and covering nearly all 50 states, that would resolve allegations that five leading banks systematically abused borrowers in their pursuit of improper home seizures.

Under the proposed agreement, Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial would be forced to improve their mortgage procedures; reduce borrowers’ loan balances and monthly payments; and make about $4.2bn in cash payments to an estimated 750,000 aggrieved homeowners and state governments, people with knowledge of the matter said.


Chinese inflation jumped in January, breaking a streak of five straight monthly declines, but seasonal factors were largely to blame and price pressures were expected to weaken in the coming months.

The consumer price index rose 4.5 per cent from a year earlier, up from December’s 4.1 per cent pace. The main cause of the rebound was a shopping blitz before last month’s Chinese New Year holiday, which pushed up food prices, an effect which has regularly been seen in the past and is likely to be temporary.

Core inflation, stripped of food costs, rose much more slowly, giving Beijing some room to stimulate the slowing economy if necessary.


Akamai shares rise 14%, 4Q revenue tops estimates

(8:57 AM ET) NEW YORK (MarketWatch) — Shares of Akamai Technologies Inc. AKAM +13.12% was up 14%, or $4.8, to $39.2 in preopen trade Thursday after its quarterly revenue exceeded expectations. Akamai, a provider of services that improve internet content delivery, made $323.7 million in the fourth-quarter, a 14% increase, surpassing $311.7 million estimated by analysts. The firm’s earning per share was 45 cents, versus the estimate of 40 cents. The company’s target price has been raised to $43 from $32, by analysts at Stifel Nicolaus.

Sealed Air swings to a loss, revenue tops $2 bln

(8:38 AM ET) NEW YORK (MarketWatch) — Sealed Air Corp. SEE +20.05% said Thursday it swung to a fourth-quarter loss of $49.3 million, or 26 cents a share, from a profit of $51.3 million, or 29 cents a share, in the year-ago period. Adjusted profit in the latest period totaled 48 cents a share. Boosted by an acquisition, sales rose to $2.05 billion, from $1.2 billion. Wall Street analysts expected Sealed Air to earn 49 cents a share on revenue of $1.69 billion, according to a survey by FactSet Research. Looking ahead, the Elmwood Park, N.J.-based company expects adjusted 2012 earnings of $1.50 to $1.60 a share, compared to the analyst estimate of $1.72 a share.

Thomson Reuters swings to big loss on charges

(7:46 AM ET) LONDON (MarketWatch) — Thomson Reuters Corp. TRI +1.50% on Thursday reported an operating loss of $2.59 billion, or $3.11 a share, vs. a profit of $307 million, or 27 cents a share, a year ago. Excluding one-time items, primarily a $3 billion charge to account for weakness in the company’s financial services business, adjusted profit came to 59 cents a share. Revenue rose by about 3% to $3.58 billion. Analysts polled by FactSet Research were looking for a profit of 56 cents a share, on average, with sales of $3.41 billion. “We have simplified our organization; we have strengthened our management team; and we are making progress toward improving our execution capability,” CEO James Smith said in a statement.

Sirius XM Radio swings to a profit

(7:46 AM ET) NEW YORK (MarketWatch) — Sirius XM Radio Inc. SIRI -0.91% said Thursday it swung to a fourth-quarter profit of $71.33 million, or a penny a share, from a loss of $81.4 million, or 2 cents a share, in the year-ago period. The media company’s revenue increased to $783.7 million from $735.9 million. Wall Street analysts expected Sirius XM Radio to earn a penny a share on revenue of $787.7 million, according to a survey by FactSet Research. Looking ahead, Sirius XM Radio expects 2012 revenue of about $3.3 billion, with net new subscribers of 1.3 million to a total of 23.2 million subscribers. The analyst estimate for 2012 revenue is $3.39 billion.

Lorillard profit climbs, firm ups dividend

(7:41 AM ET) NEW YORK (MarketWatch) — Lorillard Inc. LO +5.81% said on Thursday that its fourth-quarter profit rose to $310 million, or $2.32 a share, compared to $259 million, or $1.74 a share a year ago. On an adjusted basis, the company earned $2.20 a share versus $1.74 a share a year ago. Revenue at the firm rose to $1.62 billion, from $1.49 billion a year ago. Analysts polled by FactSet Research had expected the company to earn $1.94 a share on revenue of $1.09 billion. Lorillard also boosted its quarterly dividend by 19%.

Coca-Cola Enterprises posts 16% profit gain

(6:49 AM ET) LONDON (MarketWatch) — Bottler Coca-Cola Enterprises CCE +0.18% on Thursday reported a fourth-quarter profit of $113 million, or 36 cents a share, up from $97 million, or 29 cents a share, a year ago. Revenue climbed to $1.89 billion from $1.79 billion a year earlier. Analysts polled by Factset Research were looking for a profit, on average, of 36 cents a share on sales of $1.89 billion. “While we continue to face ongoing marketplace and macroeconomic challenges, the results from our first full year of operating exclusively as a European bottler reinforce the confidence we have in the long-term potential of today’s Coca-Cola Enterprises,” Chairman and CEO John Brock said.


Stocks to Watch

Diamond Foods said it will appoint a new chief executive and chief financial officer and will restate earnings for the past two fiscal years after an internal probe found the company’s payments to walnut growers weren’t accounted for in the correct periods. Shares plunged 42% to $21.38 in after hours trading.

Groupon posted a surprise fourth-quarter loss as expenses and one-time charges outpaced revenue growth. For the current quarter, the company projected revenue that tops analysts’ estimates, but shares still fell 16% to $20.75 after hours on the weaker-than-expected bottom-line results.

Visa posted a 16.4% increase in fiscal first-quarter profit as the credit-card processor continued to benefit from consumers’ increased use of plastic while grappling with new federal rules that affect debit-card purchases. Shares gained 3.1% to $111.70 after hours.


Overnight Headlines (Links)

Brussels in Focus After Talks Stall

Credit Suisse Swings to Surprise Loss

Banks Near $26 Billion Pact on Foreclosures

U.S. to Sue Banks Over Bonds

China’s Inflation Speeds Up



8:30 a.m. Eastern Time: Jobless claims. Economists are expecting claims to rise to 370,000 from the previous week’s 367,000 level.

10:00 a.m.: Wholesale Inventories. Economists expect a 0.4% increase in December wholesale inventories. A month earlier, inventories rose b y 0.1%.

Key Earnings

Activision Blizzard

Air Canada


Beacon Roofing Supply




Canadian Tire


Coca-Cola Enterprises

Corn Products Intl

Dunkin’ Brands

Exide Tech


Home Properties

Husky Energy

Imperial Sugar






Montpelier Re

Noble Energy

Nuance Communications


Pacer Intl


Philip Morris Intl

Pitney Bowes

Republic Services

Scripps Networks Interactive

Sealed Air

Shoppers Drug Mart


Sirius XM Radio

Sonoco Products

Teck Resources


Thomson Reuters

XL Group