What’s the Story?

by CC February 24, 2012 9:07 am • Commentary


JC Penney [JCP  41.93    0.33  (+0.79%)   ]gained after the clothing retailer reported earnings that topped estimates.

Gap [GPS  23.52    0.54  (+2.35%)   ] slipped after the retailer reported a 40 percent decline in fourth-quarter net income, hurt by higher costs and heavy discounts during the holiday season.

AIG [AIG  27.99    0.32  (+1.16%)   ] rallied after the insurer said its profit soared 77 percent in the fourth quarter, thanks to a big tax benefit.

Meanwhile, Citigroup [C  32.71    0.35  (+1.08%)   ] sold its stake in India’s Housing Development Finance for $1.9 billion, in an aim to shore up their balance sheets to meet stricter capital rules.


Upbeat economic reports helped the Standard & Poor’s 500 index SPX +0.43%  end near a 10-month high on Thursday. The Dow DJIA +0.36%  closed up 46.02 points, or 0.4%, to 12,984.69, a new 52-week high and its highest close since May 19, 2008.

Marketwatch’s Rex Nutting looks at the rising price of oil and tells Mean Street host Evan Newmark that it still has the potential of being the winning hand for Republicans in the race for the White House. Photo: AP.

“There is likely to be a big effort to push the Dow higher and engineer a close above 13,000 tonight,” said David Morrison, senior market strategist at GFT Markets. “This should also see the S&P close out at its highest level since April last year.

Morrison said central bank liquidity operations continue to support equities and other perceived ‘risk assets’ like precious metals and oil.

“Investors are also convinced that sufficient firewalls are in place to insulate other euro-zone countries in the event of Greece defaulting — something that is now viewed as highly probable,” he said.

Crude oil for April delivery CLJ2 +0.40%  rose 45 cents, or 0.4%, to $108.28 a barrel. Oil surged $1.55 a barrel on Thursday amid worries Iran could stop sending oil to some European nations. Read more on crude

Economic data will remain a focus for investors on Friday. Consumer sentiment for February from Thomson Reuters and the University of Michigan and new home sales data for January are due around 10 a.m. Eastern.


A Chinese firm trying to stop Apple Inc from using the iPad name in China has launched an attack on the consumer electronics giant’s home turf, filing a lawsuit in California that accuses it of employing deception when it bought the trademark.

A unit of Proview International Holdings Ltd, a major computer monitor maker that fell on hard times during the global financial crisis, is already suing Apple in multiple Chinese jurisdictions and requesting that sales of iPads be suspended across the country.

Last week, Proview Electronics Co Ltd and Proview Technology Co filed a lawsuit in Santa Clara County that brings their legal dispute to Silicon Valley.

Some legal experts said there could be different outcomes from the U.S. and Chinese cases, but a spreading of the lawsuit and delay in coming to settlement terms could hurt Apple more.

“In relation to the U.S., Apple is going to somewhat have a homeground advantage,” said Elliot Papageorgiou, a Shanghai-based partner and executive at law firm Rouse Legal (China).


Stocks to Watch

The corporate calendar is thin, with quarterly results expected ahead of the market open from J.C. Penney Co.  and Washington Post Co.

Salesforce.com was up 8.2% in after-hours trading after the online business-software developer said Thursday that fourth-quarter adjusted earnings were 43 cents a share on revenue of $631.9 million. Analysts polled by FactSet Research were expecting earnings of 40 cents a share on revenue of $624 million.

Insurance giant AIG gained 2.3% in evening trading Thursday as the company said fourth-quarter operating profit was 82 cents a share, above Wall Street’s consensus estimate of 63 cents a share.

Overnight Headlines (Links)

Lloyds Posts £2.8 Billion Net Loss

U.S. Readies Onslaught Against BP

Draghi Takes  Tough Line on Austerity

Oil-Spread Bets Resurface

J.C. Penney’s New Look Gets the Once Over

Gold Miners Lose Midas Touch

In Retreat, Sears Set to Unload Stores

Buffett’s Berkshire Battle

Private-Equity Fund in Valuation Inquiry

Apollo Group Nears El Paso Unit Deal

Deutsche Telekom: Downwardly Mobile in the U.S.



  • Reuters/UMich consumer sentiment survey for February. Economists expect it edged up to 73 from a previous reading of 72.5.
  • New home sales for January. Commerce Department’s report is expected to show new home sales rose 2.6% to an annual rate of 315,000 in January.

Key Earnings

  • Alpha Natural Resources
  • American Water
  • Endo Pharma
  • EW Scripps
  • Interpublic
  • JC Penney
  • Newmont Mining
  • Pepco Holdings
  • Portland General Electric
  • Washington Post