Another debt ceiling debacle could sink the economy
Last year's Congressional debt standoff hurt consumer confidence more than the collapse of Lehman Brothers, Betsey Johnson and Justin Wolfers write. This time could be worse. Read more at Counterparties
Dow and S&P 500 post best week since Christmas
Traders work on the floor of the New York Stock Exchange January 20, 2012.
Credit: Reuters/Brendan McDermid
NEW YORK |
NEW YORK (Reuters) - Stocks posted their best week since Christmas, even with a mixed finish on Friday after strong earnings from tech bellwethers IBM (IBM.N) and Intel (INTC.O) contrasted with Google's (GOOG.O) disappointing report.
The market heads into the most hectic week so far in this earnings season after a mixed start, with some worries over revenue and growth offset by sharp cost-cutting to protect the bottom line.
For the week, the Dow rose 2.4 percent and the S&P 500 gained 2 percent as investors showed some relief that earnings didn't reflect the worst elements that battered the market in the last year, especially given the problems in the euro zone that have been weighing on investor sentiment.
"For the time being, investors are pretty much taking earnings in stride. They knocked Google down this morning, but the general feeling in the marketplace is (stocks) are very undervalued at these levels, even given the marginal misses they're making in earnings," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
Indeed, investors in recent weeks have been heartened by improving economic data, even though progress has been uneven. Reflecting improved economic sentiment, the Dow Jones Transportation Average, an indicator of the economy's strength .DJT has gained about 2 percent in each of the last two weeks.
IBM (IBM.N) lifted the Dow a day after it offered a strong outlook and results from several big-tech names signaled they were shaking off nervousness about economic growth and boosting technology spending. IBM's stock rose 4.4 percent to $188.52.
On the flip side, Google Inc (GOOG.O) slid 8.4 percent to $585.99. The Internet search giant's quarterly profit and revenue missed expectations on declining search advertising rates.
The Dow Jones industrial average .DJI gained 96.50 points, or 0.76 percent, to 12,720.48 at the close. The Standard & Poor's 500 Index .SPX inched up just 0.88 of a point, or 0.07 percent, to 1,315.38. But the Nasdaq Composite Index .IXIC dipped 1.63 points, or 0.06 percent, to close at 2,786.70.
For the week, the Nasdaq climbed 2.8 percent, making this its best week in seven.
General Electric Co (GE.N) was unchanged at $19.15 after the conglomerate's revenues missed consensus forecasts. Fellow Dow component American Express Co (AXP.N) fell 1.8 percent to $50.04 as it set aside more money to cover bad loans.
Intel Corp (INTC.O) rose 2.9 percent to $26.38, while Microsoft Corp (MSFT.O) advanced 5.7 percent to $29.71. Both reported results late Thursday.
Investors also kept an eye on Greece, where a bond-swap deal between the cash-strapped country and its private bondholders appeared to be close, according to sources. An agreement was deemed possible by late Friday. Creditors could lose up to 70 percent of the loans given to the fiscally troubled nation.
Hopes are an agreement would prevent the nation from spiraling into bankruptcy and bring some stability to the debt-strained euro zone.
(Reporting By Caroline Valetkevitch; Additional reporting by Ryan Vlastelica; Editing by Jan Paschal)
- Tweet this
- Link this
- Share this
- Digg this
- Reprints
In my opinion, Facebook may pose a huge challenge to Google when it comes to advertising revenue (I don’t know if Google is already starting to feel it or not). The two main advantages that Google has over Facebook (when it comes to advertising revenue) is its search quality and adsense (see: http://fadi.el-eter.com/facebook-advertising-vs-google-advertising.html ) I wonder if that’ll remain the case 5 years from now.
– Revenue climbed 25 percent, to $10.58 billion, from $8.44 billion.
– Fourth-quarter profit was $9.50/share, up from $8.75 a year ago
– Net revenue was $8.13 billion, up from $6.37 billion.
So analysts had expectations were not met. With numbers like that, who gives a hoot about those analysts’ predictions?
Here’s yet another area where I disagree with analysts’ opinions: “…analysts are not yet convinced that Google Plus will become popular enough to compete with Facebook and Twitter. (NYT)”
As a Google+ user I can tell you we all had our doubts as not many people were joining, and the majority of members were on the techie side, not your typical Facebook user. Those doubts are gone; Google+ will be the phenomenon of this decade—that’s my prediction; it is the perfect platform to an internet community that has been seeking common ground to bask in their love of tech, innovation, and speak up with a unified voice globally. The recent internet-based anti SOPA/PIPA protests made it perfectly clear.
My opinion is independent, non-biased, uninfluenced by employer, affiliations, or sponsors; and based on actual use and interaction.
Google+ and Twitter are two different products, so I won’t waste time trying to compare. Twitter will always be around, it’s a great one-liner tool favored by the media so it’ll stay.
Google+ will not surpass Facebook as a “family and friends” network, because that’s not what it is, it will surpass it in popularity and active users because it IS the perfect internet community platform; Facebook would be a Circle in Google+.
Have the analysts do the math from the following facts: It took FB four years (48 months) to reach 100M users. G+ reached 60 million users in 0.25 years (three months).
One last thing, which I’ve been predicting all along, Facebook is digging a grave with all the useless features and annoying features it has been cramming down its users’ throats; its IPO will be its headstone. Yes, they might hit the initial numbers analysts are predicting, but it will be a short lived success. Investors will be holding worthless stock in a short while as FB continues to chase its user base away and a superb product like Google+ keeps introducing amazing tools and features to theirs. The only winner will be GS, who got in last year, it’s been pitching it and hyping it up to investors and will sell shortly after the IPO peaks.
But the Dow is up, and the other indices are basically flat. And GE stock is up, on news that 4th quarter profits are higher, while revenue is SLIGHTLY down.
And 60 percent of companies reporting so far have beaten expectations, but that’s a “lower rate than in recent quarters.”
I love this part of financial reporting. Every single word written is spin.
Follow Reuters