Dow, S&P 500 have their best January since 1997

But Amazon.com shares slump as revenue misses estimates. Chicago purchasing managers are less optimistic. Home prices drop to 2003 levels. Exxon and Radio Shack earnings disappoint. Mattel cheers.

By Charley Blaine Jan 31, 2012 2:19PM
Charley BlaineUpdated: 6:46 p.m. ET

Stocks struggled for much of the day, but a rebound from late-morning lows ensured that the Dow Jones industrials ($INDU) and the  Standard & Poor's 500 Index ($INX) had their best January performances in 15 years.

The Nasdaq Composite Index ($COMPX) had its best start to a new year since 2001.

The gains came despite losses for the market over the last few days. And whatever momentum the market had at today's close may have been lost after Amazon.com (AMZN) shares slumped sharply after hours on disappointing earnings and guidance.

But there will be great interest in the documents coming with Facebook's initial public offering. The company is expected to file its initial papers with the Securities and Exchange Commission Wednesday morning.

Like Monday, the market proved that it has some resilience. The Dow closed down 21 points to 12,633. The S&P 500 was off 1 point to 1,312; the Nasdaq gained 2 points to 2,814.

Article continues below.
The market fell back in the morning, with the Dow off as many as 86 points, after a series of disappointing domestic reports. A Conference Board report on consumer confidence was weaker than expected. The Standard & Poor's/Case-Shiller Home Price Index fell in November from a year ago for the seventh straight month. The Chicago Purchasing Managers' January index was lower than expected as well.

Earnings from Exxon Mobil (XOM), United Parcel Service (UPS) and, especially, a preliminary earnings announcement from Radio Shack (RSH) disappointed. Radio Shack said sales of Sprint (S) phones were lower than expected.

Amazon.com seen making new investments
Amazon.com's fourth-quarter revenue of $17.4 billion missed analyst estimates by more than $780 million. In addition, the company said it could see a first-quarter operating loss.

The shortfalls are the result of huge investments in fulfillment centers to support its online retail business; content for video streaming and other media businesses; and technology infrastructure for its cloud computing service.

Shares fell more than 9% after hours but settled in with about an 8.7% loss to $177.50 after rising $2.29 to $194.44 in regular trading. With today's close, Amazon shares have fallen more than 21% as analysts and investors fret about the pace at which the company spends to get ahead.

The Internet retailer said it earned 38 cents a share in the fourth quarter, down from 91 cents a year ago. Analysts had expected 19 cents a share.

The revenue was a big problem -- $17.43 billion, up 35% from a year ago's $12.95 billion. But analysts had expected $18.21 billion. 

It wasn't clear where the shortfall occurred. The mostly likely culprit was Europe. The company only reports North American and international sales. North American revenue was up 37% in the quarter; international revenue was up 31%. It's believed that German sales weren't as strong as expected.

Operating profit declined 4% in North America but 46% in its international business.
The company said sales of its Kindle tablet and e-reader devices tripled from a year ago.

The shares finished January up 12.3% for the month but may give back much of the gain on Wednesday.

The Dow finishes higher for fourth straight month
The Dow finished with a 3.4% gain for the month, with the S&P 500 up 4.4% and the Nasdaq up 8%.

Not only did the Dow enjoy its best January in 15 years, but it finished higher for the fourth month in a row. The S&P 500 was up for the second straight month and third in the last four. The Nasdaq's gain was its first after two small losses.

At the same time, today's selling of the Dow and S&P 500 should give pause. The Dow and S&P 500 finished lower for the fourth day in a row and have fallen five times in the last six sessions. The Nasdaq's gain was its fourth in six days. The S&P 500 looks like it has found near-term resistance at about 1,326.

Utilities and financials lead the market
Seven of the 10 sectors of the S&P 500 were higher today, led by utility, financial and technology stocks. Tech shares were helped by Apple (AAPL), which hit a new all-time high of $458.24. The shares pulled back to $456.48, up $3.47. Shares were slightly lower after hours.

American Express (AXP), United Technologies (UTX)and Bank of America (BAC) were the percentage leaders among the 30 Dow stocks.

IBM (IBM), Exxon and Caterpillar (CAT) subtracted nearly 53 points from the blue-chip index. Sixteen of the 30 Dow stocks were higher.

Energy prices -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Crude oil (-CL)

$98.48

$98.78

-0.35%

-0.35%
(per barrel)











Heating oil (-HO)

$3.0628

$3.0378

5.10%

5.10%
(per gallon)











Natural gas (-NG)

$2.5030

$2.7130

-16.26%

-16.26%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.8909

$2.8727

8.79%

8.79%
(per gallon)











Brent crude 

$110.98

$110.75

3.35%

3.35%
(per barrel)











Retail gasoline

$3.4430

$3.4290

5.32%

5.32%
(per gallon; AAA)












Crude oil and copper move lower
Crude oil (-CL) settled down 18 cents to $98.60 a  barrel and helped push many energy stocks lower. Natural gas (-NG) fell to $2.517 per million British thermal units. That's a 7.2% decline.

For the month, crude oil in New York was down 0.4% for the month. Natural gas fell 16.3% because of the warm winter and a supply glut. But retail gasoline, measured by AAA's Daily Fuel Gauge Report, was up 5.3% for the month.

In addition to Exxon's decline, Chevron (CVX) and ConocoPhillips (COP) were lower. BP (BP) and Royal Dutch Shell (RDS.A) were higher.

Gold (-GC) settled up $6.80 to $1,737.80 an ounce. Silver (-SI), however, was off  26.5 cents to $33.262 an ounce. Copper (-HG) dropped 9.75 cents to $3.79 a pound. Silver and copper were trading lower in electronic markets.

Gold was up 10.9% for the month, with silver up 19.2% and copper up 10.3%.

Freeport-McMoRan Copper & Gold
(FCX) finished up 11 cents to $46.21.

The dollar moved higher against the euro. Interest rates were lower. The 10-year Treasury yield fell to 1.799% from Monday's 1.837%.

European stocks move higher, despite lack of a Greek deal
The reports offset relatively good news from Europe.

Twenty-five of 27 nations in the European Union agreed to strict fiscal controls that would include fines for missing deficit limits.

But Greece and its private bondholders still haven't completed negotiations for a debt restructuring. Stocks in Germany, France and the United Kingdom were higher.

Exxon Mobil earnings don't impress
Oil giant Exxon Mobil said profit rose 2% in the fourth quarter to $9.4 billion as crude prices climbed. The company said earnings rose 12 cents from a year ago to $1.97 a share, beating the average expectation of $1.95 a share, according to analysts. The company also said it completed a $5 billion share buyback during the quarter.

Revenue was $121.6 billion in the quarter, up 15.6% from a year ago but less than the consensus estimate of about $124.4 billion. Still, it was roughly the same as the gross domestic product of Vietnam. For the year revenue hit $486.4 billion, up 27% from 2010. The revenue is larger than the GDP of Argentina and smaller than the GDP of Belgium.

Shares were down $1.75 to $83.74 because of production declines in six continents. Fourth-quarter oil and natural-gas production fell 8.8%.

UPS sees softness in the global economy; Mattel boosts its dividend
United Parcel Service shares fell 50 cents to $75.65. The company reported record fourth-quarter results today. Holiday shipping helped boost sales. Revenue grew 6% to $14.2 billion in the quarter while earnings rose to $1.28 a share to exceed the average analyst estimate of $1.26 a share. The company said U.S. business was a touch stronger than international volume.

Toymaker Mattel (MAT) said revenue rose 1.4% in the fourth quarter to $2.15 billion. The maker of Barbie reported earnings of $1.07 a share to exceed estimates of $1 a share as worldwide sales grew 7% from the prior year. The toymaker also said it will increase its dividend by 35% to 31 cents a share.  Shares jumped $1.47 to $31.

Eli Lilly (LLY) reported that fourth-quarter revenue sank after the drugmaker lost its patent on the schizophrenia drug Zyprexa. The company reported that profit slumped 27% to $858.2 million last quarter. Earnings slipped to 87 cents a share, beating the average analyst estimate of 81 cents.  But shares were up 49 cents to $39.74.

Drugmaker Pfizer (PFE) also reported revenue hurt by the loss of a patent, and shares fell 18 cents to $21.40. Profit slipped to $1.44 billion from $2.89 billion a year earlier after the company lost patent protection on its popular cholesterol drug Lipitor. The company reported earnings of 50 cents a share, beating the Street estimate by 3 cents.

Lousy news on home prices
Home prices fell for the third straight month in November in nearly all cities tracked by the Standard & Poor's/Case-Shiller home-price index. The declines show that most homeowners are not reaping the benefits from some signs of an improving housing market.

Prices dropped from October in 19 of the 20 cities tracked. The biggest declines were in Atlanta, Chicago and Detroit. Phoenix was the only city to show an increase. November's decline partly reflects the typical fall slowdown after the peak buying season.

Still, prices declined in 18 of the 20 cities compared with the same month in 2010. Only Washington and Detroit posted year-over-year increases. And prices have fallen 33% nationwide since the housing bust, to 2003 levels.

Separately, the Commerce Department reported today that the U.S. homeownership rate fell to 66.15% in 2011, the lowest level since 1997's 65.7%. The number got as high as 69% in 2006.

Short hits from the markets -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0500%  0.050%

400.00%  400.00%
5-year Treasury note 

0.711%  0.732%

-14.34%  -14.34%
10-year Treasury note

1.799%  1.837%

-3.85%  -3.85%
30-year Treasury bond

2.934%  2.983%

1.56%  1.56%
Currencies











U.S. Dollar Index

79.417  79.302  -1.37%  -1.37%
British pound

1.5788  1.5716  1.61%  1.61%
(in U.S. $)

          
U.S. $ in pounds

£0.633  £0.636  -1.58%  -1.58%
Euro in dollars

$1.31  $1.31  1.42%  1.42%
(in U.S. $)

          
U.S. $ in euros

€ 0.761  € 0.761  -1.40%  -1.40%
U.S. $ in yen 

76.45  76.37  -0.84%   -0.84%
U.S. $ in Chinese

6.33  6.31  0.03%  0.03%
yuan

            
Canada dollar

$1.001  $1.002  2.06%  2.06%
(in U.S. $)

          
U.S. dollar 

$0.999  $1.002  -2.03%  -2.03%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,737.80

$1,731.00

10.91%

10.91%
(per troy ounce)











Copper (-HG)

$3.790

$3.827

10.30%

10.30%
(per pound)











Silver (-SI)

$33.2620

$33.5270

19.15%

19.15%
(per troy ounce)











Wheat (-ZW)

$6.6600

$6.4475

2.03%

2.03%
(per bushel)











Corn (-ZC)

$6.3900

$6.318

-1.16%

-1.16%
(per bushel)











Cotton 

$0.9451

0.9487

3.09%

3.09%
(per pound)











Coffee

$2.1800

2.1945

-5.07%

-5.07%
(per pound)











Crude oil (-CL)

$98.48

$98.78

-0.35%

-0.35%
(per barrel)










 

89Comments
Jan 31, 2012 3:50PM
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TRUTH !!!!!  SOME ONE TELL US THE TRUTH FOR ONCE!!!!!!!  Hard to do when they don't know it themselves!!!!!  This is what happens when you live in a house of cards pretty soon it falls.

  Who will they blame next??  first it was the workers were over paid - They fixed that by sending jobs out ? next materials were to high answerer buy overseas- we get harmful chemicals in everything!!!!!!!  Then we are told buy American- then our own military buys from china, brazil an god only knows who or what else WHY?? BECAUSE they say we don't  have the capabilities to manufacture it our selves!!!!!!!!  REASON- KICK BACKS  are easier to cover up at all levels if any one opens their mouth the disappear .

  Besides that they already shut down our manufacturing end of the economy. Now our abilities to do the job will need to be relearned, to ever get us back to the level we were at an higher.  OUR LEADERS PAST AN PRESENT  ARE TOTALLY TO BLAME ALONG WITH CORPORATIONS ALL FOR THE ALMIGHTY DOLLAR THEY TREAT AS THEIR GOD!!!

Jan 31, 2012 3:55PM
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When we step into that election booth this November, we'll all need to ask ourselves:  "Are we better off today that we were $5,000,000,000,000 ago?"
Jan 31, 2012 3:29PM
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Heard a Big Oil Executive talk about taxing during a Congressional hearing some time ago and his answer was plain and simple" Tax us if you like and you will be begging for $5.00 a gallon gas because we will pass it on to the consumer.

 

Careful what you wish for because they have US by the balls!!!!!!!!!!  And politicians by the wallet!!!

Jan 31, 2012 3:13PM
avatar

"Home prices fell for a third straight month in November in nearly all cities tracked by the Standard & Poor's/Case-Shiller home-price index. The declines show that most homeowners are not reaping the benefits from some signs of an improving housing market"

 

So what are the "signs" of an improving market?   Some bullsh*t lies made up the the National Association of Realtors who wants potential home buyers to thing everything is wonderful?  To buy in todays market you need to get the house at least 15-20% below the fair market value asking price just to "maybe" break even when you go to sell especially since you need to factor in a real estate commission of 5-7% etc.  Your house is a place to live...period and is not the hyped up investment from years past.  Secondly..you house is only worth what you can sell it for at that point in time.

Jan 31, 2012 5:48PM
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Paul Ryan (R) WI reminding us about Federal workers making more than private sector doesn't mention the fact Congress/Senate $150 k to start and $50 k pension for life after 1st term. You tell em Ryan who's over paid?
Jan 31, 2012 4:16PM
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AutoIf Canada wants to export their oil, why don't they simply build a pipe to the Hudson bay, it's about a fifth of the distance and we don't have to be involved. A three thousand mile pipe line makes no sense, we have lots of mid west refineries this oil can go to if they want to sell to us, Oklahoma has at least 13 refineries. Something is wrong with the whole XL scheme.Eye-rolling
Jan 31, 2012 2:46PM
avatar
I agree with comments posted here stating we need to quit pointing the finger at one side or the other.  I personally am a Republican, but first and foremost, an AMERICAN!  We need to get the crooked politicians out of the White House, whatever party they come from!  Then we need to tell Exxon Mobil to bring their prices down or we will just tax the hell out of them!  If you are still profiting BILLIONS of dollars each quarter, you can afford to bring the prices down, or pay more taxes.  Don't like it - tough!  Time for the President and the politicians to grow a set of balls and stick up for the people who elect them and pay their salaries.  If they don't, they aren't needed and should be DOWNSIZED!!  If you agree, do something about it instead of sitting back and pointing a finger! Crying
Jan 31, 2012 5:03PM
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Sometimes I wonder where these people live, do they go out in public or even have a life, it has nothing to do with confidence it has to do with prices, look at the cost of everything of course the consumers are not spending, companies are pricing themselves into extinction, thinking they can make up the lost revenue from consumers they lost, I just booted COX because they just raised their prices they have lost so many consumers around me but due to their sheer greed people are jumping ship in record numbers, I was with them for 8 years but enough is enough, they now charge $54.00 for basic cable, companies that has share holders will falter in these harsh economic times, try dividing the money by millions of share holders .................
Jan 31, 2012 3:04PM
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Stock bubble is about to go bust. This is like Tulip mania, South Sea bubble. Earnings will disappear. We are living on borrowed money borrowed time. Google for Kondratieff Wave 2012 to understand the dangers in the financial markets this year. Big money is selling the rally. This is pump and dump in progress. 2009 was not the bottom. We are going lower than that!

avatar
Weak consumer confidence stymies stocks


Well at least they get marks for the use of a new word, "stymies", nice!

Jan 31, 2012 4:38PM
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Hey Truthseeker,

 

   Just like a script, the markets erased all of it's ealier losses! It's onIy 3:30 but I'm sure it will hold.  Guess today'sdata doesn't matter. The only thing the market sees is the fed will come to the rescue, again. My question is how long can they do this, eventually the "medicine" will become the poison. We'll have to wait and see.

Jan 31, 2012 2:47PM
avatar

Weak Stocks, weak economy, now consider buying stock in the food industry as Michelle Ombama just instituted new nutrional rules.

 

Now this is what I think about it and agree with Dave Blumer (article writer):

New nutrition standards? The old ones were not working the way the food police wanted them to work so here comes another round. Don't get me wrong folks, I am FOR everyone eating healthy. What I am unalterably opposed to is the government sticking its big fat nose and butt into another aspect of our lives. The next thing we see will probably be deputy Federal Marshalls or Tsars in every school lunch room enforcing the new standards. Once you allow the government in, there is usually no reversing it. They tell us that this is for the good of the kids. since when does the federal government trump mom and dad?
avatar
WHEN will the FED and all the economists out there REALIZE that half of all Americans only make $1 trillion dollars a year which means on average $16,215 a year as there are 62 millions of them.

WAKE UP THE HOUSING MARKET WILL NEVER RECOVER while the Fed is trying to keep asset prices up which means trying to sell houses built in the 1950's for $10,000 for $300,000 today.

THE MATH WILL JUST NOT WORK GEITHNER ( the tax evader who should be in jail and not running the IRS) and Buzz Bernanke (prints monies to infinity and beyond).

Gee people it's not that hard to figure out what to do.
First anyone on welfare has to do something to earn their keep. Clean the streets, baby sit other welfare people's kids so some of them can get out there and make a difference, teach them the three R's as the schools did not. 

Hire the 30,000,000 unemployed people at $100,000 an hour and put them to work building a solar mono-rail transit system for our cities and between the cities that will produce electrical power that is really too cheap to meter. 

Gee I am beginning to think all the people in government are Chinese spies trying to destroy this country. The CEO's certainly are. 
Jan 31, 2012 5:00PM
avatar
Home prices drop to 2003 levels.
But has property taxes fallen as well to 2003 levels or is the home owner still paying for bubble appraisal evaluation of 2007?  If the housing values continue to fall .. at some point homeowners simply walk away from the house and leave the tax bill to the bankers.  And if Freddy and Fanny own 90% of the home loans .. who ends up paying property taxes on a vacant house?
Jan 31, 2012 4:20PM
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Headline:

 

"When the World Ends, None of You are Invited to the Party (I want Sofia Vergara all to myself) "

Jan 31, 2012 3:04PM
avatar

We need to get the crooked politicians out of the White House, whatever party they come from!

-----------

The problem isn't the White House, the problem is CONGRESS.

Jan 31, 2012 3:44PM
avatar

Hey Truthseeker,

 

  Talk to CGTI, he thinks the manipulators push the markets down. As he calls them, "scum bags".

 

   I'm in your camp, the fed and the primary dealers are in total control of the markets propping them up with loads of liquidity, they are the ones that will determine the market's direction. Take a look at the news recently...GPD miss, Consumer confidence miss, Chicago Purchasing Managers miss, alot of earnings misses. And Europe hasn't solved anything. It's truly amazing the market is where it is.

Jan 31, 2012 5:38PM
avatar

Florida's final results are in and the winner is:

 

MICKEY MOUSE with 47% of the vote.

 

 

Jan 31, 2012 3:14PM
avatar
Don't worry folks the market won't end up down for the day...those in control will see to that...
Jan 31, 2012 7:01PM
avatar
NO MORE Obama in 2012!  No Thank you!
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