BlueCreek Investment Partners

• Home
• About BlueCreek
• Services
• Client Tools
  • My Streetscape
  • Financeware
  • Black Diamond
• Contact Us

Weekly Review | Jan 16 to Jan 23

Market Indices

Index	Jan 16, 2012	Jan 23, 2012	Change	Percent
DJIA	12423.12	12720.48	297.36	+2.39
Nasdaq	2736.34	2786.70	50.36	+1.84
S&P500	1290.22	1315.38	25.16	+1.95
Russell 2000	769.05	784.62	15.57	+2.02
Russell 1000	597.98	609.13	11.15	+1.86

Equity Review

Last week U.S. stocks posted a third straight week of gains.  The Dow Jones closed up 2.4% for the week at 12,720.48.  The S&P 500 finished up 2% for the week ended January 20 at 1315.38.  This is the first week the S&P 500 closed over 1300 since July.  Microsoft Corporation reported second quarter earnings, stating profit dropped from one year ago.  Net income was $6.62 billion or $0.78 per share.  Analysts expected $0.76 per share.  The company’s CEO said, “We delivered solid financial results, even as we prepare for a launch year that will accelerate many of our key products and services.”  Intel Corporation reported earnings above Wall Street’s expectations for the fourth quarter.  Net income for the company rose to $3.36 billion or $0.64 per share, a 5.7% increase from one year ago, and was above the estimate of $0.61 per share.  IBM reported a 4.4% rise in net income from one year ago.  Earnings for the fourth quarter were $5.49 billion or $4.71 per share.  The company also beat the earnings estimate of $4.62 per share.  S&P 500 component General Electric reported its results for the fourth quarter.  Net income fell to $3.73 billion or $0.39 per share versus $0.42 a year ago.  Analysts had predicted $0.38 per share.  Management said, “Our portfolio demonstrated strength and resilience, delivering earnings growth for the second consecutive quarter while also generating substantial operating cash flow to support investment in our business and dividend growth.”  Google shares were down almost 10% following the fourth quarter results report.  Google announced a 6% gain in earnings for the quarter ended December 31, missing Wall Street’s expectations of $10.49 per share.  Net income for the tech giant was $2.71 billion or $9.50 per share.  Revenue came in at $8.13 billion, short of the expected $8.43 billion.  This week investors will digest earnings from over 100 large cap companies.

Economic Indicators

Economic Review

New claims for unemployment declined last week marking their lowest level in almost four years.  First time unemployment claims fell 50,000 to 352,000 for the week ended January 14.  Economists had expected a decline to 375,000.  While the drop is good news for the jobs market, it’s difficult to determine the direction of claims until late January or early February.  The Labor Department also announced that U.S. wholesale prices fell in December.  The producer price index dropped 0.1%, showing a decline in the cost of food and gas.  Energy prices fell 0.8% due to lower prices at the gas pump.  Food costs also dropped 0.8% as the result of an 11% decline in vegetable prices.  Economists were expecting a 1.0% increase overall in producer prices.  The consumer price index was flat last month short of the 0.1% increase that was predicted.  Inflation pressures are easing, with sharp drops in energy, vehicle and consumer goods prices.  During the holiday season, many chain store retailers offered heavy discounts in order to get shoppers to spend more.  Last month housing starts fell 4.1% to a rate of 679,000.  Analysts were not surprised by the decline for December and say it was due to a sharp drop in the multi-family sector.  Sales of existing homes increased 5% in December.  Lower interest rates and better jobs conditions have helped sales figures.  Median sales prices in December fell 2.5% from one year ago to $164,500.  This week more news on housing is due as well as fourth quarter GDP.  The euro closed up 2% against the U.S. dollar as traders nervously await news on Greece.  The IMP previously agreed to a debt reduction plan for the country, which would include swapping bonds.  A deal would allow Greece to receive another installment of its bailout from the EU and the IMF.