Stocks Posted Best Weekly Gain in 2-Months (AAPL, BAC, BIDU, BP, ERTS, FCX, FSLR, MEE, PFE, SLW, V, XOM)

Published on Saturday, 05 February 2011 10:00 Written by TradersHuddle Staff

Weston, February 5^th (Tradershuddle.com) – Stocks posted the best weekly performance in 2-months, as investors focused on better than expected earnings and dismissed jobs data and concerns over Egypt unrest. Participants anticipate the Fed will continue to provide stimulus, which is bullish for stocks, as unemployment levels remain high and inflation levels low.

For the week, the blue chip index climbed 2.27%; the S&P 500 Index gained 2.71% and the NASDAQ jumped 3.07%.

At the start of the week, stocks gained, with the S&P 500 locking its best January gain since 2006 and the Dow posting its best January gain in 14 years, as the crude oil prices lifted the energy sector. Better than expected data an earnings from Exxon helped market sentiment.

Participants dismissed the unrest in Egypt and geopolitical implications and focused on better than expected results from energy giant Exxon Mobil (NYSE:XOM) and M&A activity.

On economic data, personal spending during December increased 0.7%, which is greater than the 0.6% increase that had been widely anticipated. And the Chicago PMI came in at 68.8 for December its best reading since 1988.

Energy, materials, and financials were the bets performing sectors. The energy sector rallied 2.6% lifted by higher crude oil prices and by M&A activity in the coal space. Crude oil extended its gains, climbing to a two-year high of $92.84 per barrel, before settling with a 3.2% gain at $92.19 per barrel. Traders continued to press the possibility of crude oil flow being interrupted at the Suez Canal and of possible Egypt unrest spillover to other oil producing countries in the Middle East.

Exxon Mobil (NYSE:XOM), the largest U.S. energy producer, jumped 2.14% to $80.68, posting a new 2-year high at $80.82 and posting one of the biggest percentage gains in the Dow Jones Industrial Average. The company reported a profit of $1.85 per share, $0.22 better than consensus, with downstream earnings swinging to a profit.

Also on the Dow, Chevron (NYSE:CVX), the second largest U.S. energy producer, climbed 1.67% to $94.93, posting one of the biggest percentage gains in the blue chip index. Chevron was able to post a new 52-week high of $95.19 on the back of strong sector performance.

Massey Energy (NYSE:MEE), the Richmond, VA based coal producer, surged more than 9.8% to $62.86, lifting the energy sector higher and posting one of the biggest percentage gains in the S&P 500 index, after the company agreed to be acquired by Alpha Natural Resources (NYSE:ANR), the metallurgic and steam coal producer for about $7.1 billion or $69.33 per share in a mixture of cash and stock. The combined company will be the second largest coal producer in the U.S. in terms of sales, with Alpha Natural Resources’ shareholders owning a 54% stake.  Shares of Alpha Natural plunged more than 7% on the news.

Alcoa (NYSE:AA), the aluminum producer, was one of the outperforming stocks in the materials sector, gaining 2.73% to $16.67, the biggest percentage increase in the Dow on the back of better than expected U.S. consumer spending, which could signal stronger demand for the metal used in appliances and automobiles, among other end uses.

Freeport McMoRan (NYSE:FCX), the world’s largest publicly traded copper producer, surged 2.43% to $108.75 as copper posted its seventh monthly gain on speculation that demand in China, the largest user, will pick up after the Lunar New Year holiday and as investors seek a hedge against accelerating consumer prices.

Financial shares gained 1%, helped by gains from Bank of America (NYSE:BAC), the largest U.S. lender. The stock fell below its 200day moving average last week after the stock got hit on an earnings miss. Price action for the stock had its advancing 50day moving average at $13.01 acting as support and its declining 200day moving average at $13.99 acting as resistance.

Citigroup (NYSE:C), the diversified global financial firm, was one of the outperformers on the sector, jumping 2.12% to $4.82; the stock broke a significant low in pre-market trading but was able to rebound from its low of the session at $4.73, which was close to its 50day moving average.

Among technology shares, IBM (NYSE:IBM), the IT solutions and consulting services provider, gained 1.75% to $162, posting one of the biggest percentage gains in the blue chip index during the session. IBM was the best Dow performer during January, climbing 10.38%, lifting the Dow to its 2.72% gain during the month.

NVIDIA (NASDAQ:NVDA), the world leader in visual computing technologies, added 0.67% during the session. NVIDIA posted the best S&P 500 performance during January, rising 55.32%.

Meanwhile, rival Intel (NASDAQ:INTC), the world’s largest chipmaker finished flat for the session after investors digested news that the firm discovered a chipset error. Although the error will adversely impact the firm's revenue, it wasn't enough to stop Intel from increasing its overall revenue forecast. Intel posted a 2.04% gain in January.

And Procter & Gamble (NYSE:PG), the global consumer products company, fell 1.67% to $63.13, dragging the most in the Dow on concern over higher raw material costs impacting the bottom line. Procter finished the session just below calculated support at $63.14.

On Tuesday, the market started the session with solid gains on the back of strong Chinese manufacturing data and better than expected corporate results, which lifted optimism the economic recovery is gathering strength. Concern over the potential spillover of the unrest in Egypt eased.

Better than expected earnings from Pfizer (NYSE:PFE) and United Parcel Service (NYSE:UPS), added to the bullish sentiment. UPS, the economic bellwether, posted a profit of $1.08 per share, $0.03 better than consensus; revenues climbed 8.4% year over year, helped by a 1.7% gain in average daily package volume due to growth in Next Day Air and Ground shipments. UPS climbed 4.15% to $74.59, posting a new 52-week high at $75.19.

Stocks were able to add to gains, with the indices trading above benchmark levels, following a stronger than expected January ISM Manufacturing Index. Data from construction spending showed a sharp decline of 2.5%.

The risk appetite returned, turning the Dollar lower, with the Dollar Index falling 1% for the session, posting a new 2011 low, which in turned pushed commodity prices higher. Materials, financials, energy along with technology and healthcare were the outperformers with utilities and consumer staples lagging but still posting sizable gains.

Materials climbed 2.8% during the session, as Freeport McMoRan (NYSE:FCX) rallied 4.89% to $114.07, breaking above its resistance at $111.62 and moving above its 50day moving average on the back of higher copper prices. Copper futures gained to a record in London and New York as Chinese manufacturing expanded and U.S. manufacturing grew the most since 2004.

Alcoa (NYSE:AA) jumped 4.53% to $17.32, breaking above resistance at $16.63 and posting one of the biggest percentage gains in the Dow Jones Industrial Average, as the ISM data was better than expected and automaker sales in January pointed to gains.

Also on the sector Potash Corp. (NYSE:POT), the world’s largest fertilizer company, climbed 2.81% to $182.77, breaking above its calculated resistance of $178.71. Dahlman Rose raised its estimates by $0.68 to $8.63 per share, as it notes that given higher grain prices, it expects farmers to return to full application levels in developed markets and increase application in developing markets.

Weakness in the dollar helped gold and silver recoup earlier losses and finished the session in positive territory. April gold closed higher by 0.4% to $1340.30 per ounce while March silver gained 1% to finish at $28.51 per ounce. Silver Wheaton (NYSE:SLW), the largest metal streaming company in the world, surged 6.27% to $32.73, breaking above its resistance at $31.60 and finishing very close to its 20day moving average at $32.89. Some analysts believe that technicals seem to indicate Silver can move back up to $30 per ounce.

Financials were the second best sector in the S&P 500, with Bank of America (NYSE:BAC), posting significant gains in the sector and the blue chip index. The Charlotte, NC based bank surged 4.23% to $14.30, breaking above its 200day moving average of $13.96, following being named as the most valuable banking brand in the world, according to Brand Finance, plc, which value the largest U.S. lender in $30.6 billion.

Wells Fargo (NYSE:WFC), the San Francisco based financial firm, jumped 3.15% to $33.44, breaking above resistance at $32.99 and trading close to its 52-week high after it was named as the second most valuable brand, as Brand Finance valued the franchise at $28.9 billion, behind Bank of America and ahead HSBC (NYSE:HBC), Europe’s largest bank at $27.6 billion.

March crude oil finished lower by 1.5% to $90.77 per barrel. Despite the pullback, all eyes remained on the unrest in Egypt and any potential supply disruptions that could arise from the situation. March natural gas closed lower by 1.4% to $4.34 per MMBtu. Despite the weakness in the energy complex and the greenback, the sector was able to post significant gains, climbing 1.9% in the session. Exxon Mobil (NYSE:XOM) surged in the blue chip index 4% to $83.91, posting a new 2-year high at $83.96.

Also boosting the sector, Anadarko Petroleum (NYSE:APC), the independent oil and natural gas producer, jumped 1.9% to $78.54, trading very close to its 52-week high after the company posted better than expected results.

On the positive side, but missing its earnings estimates, BP (NYSE:BP), the energy giant based in London, gained 1.07% to $47.98, turning positive in the session, after the company missed earnings expectations and resumed its dividend at 50% of the pre-Gulf spill level. The group income statement for the fourth quarter reflects a further pre-tax charge of $1.0 billion in relation to the Gulf of Mexico oil spill, making a total of $40.9 billion for the year.

In the tech sector, semiconductors showed relative strength with the Philly Semi Index trading 2.1% higher. Among chips stocks, Novellus (NASDAQ:NVLS), the equipment maker used for chips manufacturing, jumped to 5.74% following an upside earnings surprise.

Arm Holdings (NASDAQ:ARMH), the licensor of technology designs to semiconductor companies, surged 8.35% to $27.13, following an upside earnings surprise. The company reported earnings of $0.14 per share, $0.04 better than consensus.

Baidu.com (NASDAQ:BIDU), the largest Chinese search engine, was a notable outperformer, posting the best percentage gain in the NASDAQ 100, as share were jumping more than 9% to $118.73, and posting an all-time high of $119.21 following an upside earnings surprise. Baidu posted a profit of $0.50 per share, $0.04 better than consensus; revenues surged 94.4% year over year to $371.3 million versus consensus of $361 million. Additionally, the company issued upside guidance for the current quarter, it sees revenues of $360.6-371.2 million

The healthcare sector received a boost after Pfizer (NYSE:PFE) jumped 5.49% to $19.22, trading above its 20day moving average at $18.25 and posting the biggest percentage gain in the Dow. Pfizer reported Earnings of $0.47, $0.01 better than consensus. Pfizer also announced a new $5 billion share buy back program.

Automakers were active following January sales results. Ford Motor (NYSE:F) saw strong volume following news of its 13% increase in total January sales. General Motors (NYSE:GM) announced a 23% annual increase in January sales and Toyota Motor (NYSE:TM), the world’s largest automaker, said its January U.S. sales increased 17% from the prior year.

Also on the earnings front, Archer Daniels Midland (NYSE:ADM), the agricultural products processor, jumped 6.21% to $34.70 after the company posted earnings of $1.14, $0.36 better than consensus.

Mid week, stocks on negative territory, but close to the neutral line, as participants dismissed a better than expected private employment report and took caution as violence unraveled in Egypt, with pro-Mubarak supporters clashing with anti-government protesters.

Stocks lacked direction, as investors decided to focus on the Egypt unrest and less on the ADP report. Technology was the only sector that gained, energy was unchanged, while financials, utilities, and telecom posted the worst performances. On the Dow Jones Industrial Average, Walt Disney (NYSE:DIS), the world’s largest media company, and Boeing (NYSE:BA), the world’s largest aerospace company, posted the biggest percentage gains, while Home Depot (NYSE:HD), the largest home improvement retailer, JPMorgan (NYSE:JPM), the U.S. second largest lender, and Wal-Mart (NYSE:WMT), the world’s largest retailer, posted the biggest percentage declines in the index.

Disney gained 1.53% to $40.49 after posting a new 52-week high at $40.71. Disney outperformed in the consumer discretionary sector, which lost 0.2% in the session. Disney shares saw an increased bid the session following an earnings surprise by Time Warner (NYSE:TWX), the owner of CNN and Fortune Magazine. Time Warner surged more than 8% to $35.10, climbing above its calculated resistance and posting a new 52-week high after reporting strong quarterly results and raising its cash dividend. The company posted an adjusted operating income jumped of $5.4 billion, the highest amount in Company’s history, due to strong performances at the Networks and Publishing segments.

Consumer discretionary saw pressured from retailers Home Depot and Wal-Mart. The Bentonville, Arkansas based retailer fell 0.83% after it was downgraded to a Hold from Buy at Deutsche Bank and lowered its price target to $60 a share from $66.

The Dollar index saw a slight bid after it hit a two-month low in the previous session. The positive greenback pushed Gold prices lower by 0.6% to $1331.70 per ounce and silver by 0.9% to $28.25 per ounce. But Copper remained near record highs as it eked out a fractional gain to settle pit trade at $4.55 per pound. Freeport McMoRan (NYSE:FCX) and Silver Wheaton (NYSE:SLW) were among the laggards.

Freeport fell 1.36% to $56.26, as the stock had a 2 for 1 split and traded above its 50day moving average last session and still was able to hold the breakout by finishing above $56.1. Silver Wheaton fell 1.13% to $32.36, breaking below its 20day moving average at $32.60. Lower silver prices pressured the stock, which helped dragged the materials sector to a 0.3% loss.

Meanwhile crude oil fluctuated for the entire session, settling with a 0.3% gain at $91.03 per barrel. As for natural gas, it settled pit trade with a 2.0% gain at $4.43 per MMBtu. Exxon Mobil (NYSE:XOM) fell 0.60% to $83.41, after posting a fresh 2-year high at $83.98.

Boosting the energy sector, Cameron (NYSE:CAM), oil and gas pressure equipment maker, and Valero (NYSE:VLO), the independent petroleum refining and marketing company, gained making new highs.

Cameron surged 4.47% to $56.08 and posted a new 52-week high of $58.23 after the company posted an upside earnings surprise. Valero climbed 1.42% to $26.43 after posting a new 52-week high at $26.99; the company continued to make new highs after it was upgraded to Outperform at Oppenheimer.

Bullish activity was seen on solar stocks. First Solar (NASDAQ:FSLR), the largest maker of thin film solar modules in the world, jumped 5.32% to $164.40, trading above its calculated resistance at $158.71 and posting a new 52-week high at $165.90. First Solar was one of the best NASDAQ 100 performers. Wunderlich noted that as the price of oil rises, so should the price of First Solar.

Financials stocks were the laggards on the session, with the sector falling 0.9%. Underperforming and dragging on the sector Genworth Financial (NYSE:GNW), the insurance and wealth management services provider, plunged more than 8% to $12.76 after the company reported a loss of $0.28, $0.44 worse than consensus, as its results were hit by losses in the U.S. Mortgage Insurance business. And AFLAC (NYSE:AFL), the supplemental insurance company, fell 2.44% to $57.10 after the company also missed expectations.

On the tech front, semiconductors provided some support, despite earnings miss from Broadcom (NASDAQ:BRCM).

Apple (NASDAQ:AAPL), the maker of iPads and iPhones, fell slightly to $344.32, as the stock struggled with its calculated resistance at the $345.60 level. The company announced that Verizon Wireless customers can pre-order the new iPhone 4 starting 3:00 am Eastern on February 3^rd.

On the earnings front, Mattel (NYSE:MAT), the toy maker, gained 0.91% after being up more than 2% earlier in the session. The company beat analysts’ expectations on strong Barbie and American Girl sales.

And Electronic Arts (NASDAQ:ERTS), the video game publisher, surged more than 15%, posting the biggest percentage gain in the S&P 500 after raising its fourth-quarter and full-year adjusted earnings targets and announcing a stock-buyback plan. The video game publisher was upgraded to Overweight from Neutral at Piper Jaffray.

On Thursday, the market started in negative territory after a drop in weekly jobless claims failed to spur a bid in the market as optimism on the strength of the economic recovery and better than expected corporate results were offset by increased violent turmoil in Egypt.

But stocks turned higher in afternoon trading after Ben Bernanke in a speech to the National Press Club said that the U.S. economic growth has improved but still below a level that will lower unemployment. The Central Bank chief said that the level of unemployment and low inflation require the Fed to continue to stimulate the economy.

None of the key S&P 500 sectors finished lower; consumer discretionary, telecom, and staples posted the best performances. The consumer discretionary sector climbed 1.2%, on the back of retailers having a strong showing, gaining 1.3% in the session, as they benefited from a sizable batch of stronger-than-expected same-store sales results. Nordstrom (NYSE:JWN), the upscale department store operator, rallied 4.89% to $42.05, as the stock moved away from its support level at $40.03, after the company reported January same stores sales climbed 4.8%, well above the 2.6% that it was expected.

Also on the retail space, BJ’s Wholesale (NYSE:BJ), the third largest U.S. warehouse club chain, surged 12.18% to $48.25, posting a new 52-week high at 49.30 earlier after the company announced that upon the recommendation of a committee of independent directors, it decided to explore and evaluate strategic alternatives, including a possible sale of the company. The wholesale club chain also reported January same store sales, which jumped 2.7%, above consensus of 2.2%. Peer Costco (NASDAQ:COST) saw strength in the session and was one of the best performers in the NASDAQ 100, as shares jumped 4.49% to $74.03 and posted a new high at $74.24.

The mounting Egypt turmoil and violence, pushed the Dollar and the safe haven trade of precious metals higher, with both Gold and Silver jumping to two-week highs. April gold finished higher by 1.6% to $1353.00 per ounce, while March silver rallied for 1.8% to end at $28.72 per ounce. Silver Wheaton (NYSE:SLW) surged 5.32% to $34.08, breaking above its 20day moving average at $32.39 and getting close to its declining 50day moving average at $35.56.

On the industrial metal front, copper traded to a record, topping $10,000 per metric ton on speculation demand for the metal will be strong along with disruptions in copper operations in Australia due to the cyclone. Freeport McMoRan (NYSE:FCX) gained 1.12% to $56.89, bringing the price action very close to its calculated resistance at $57.11.

The gains in the greenback moderated the advance in crude oil, however Brent crude closed slightly below $102 a barrel, after topping $103 earlier, while U.S. light sweet crude dropped to under $91, even as the clashes in Egypt raised the prospect of further unrest in the Middle East. Collectively, energy shares gained 1%, with Chevron (NYSE:CVX) outperforming, as shares gained 0.84% to $97.31. Chevron posted a new 52-week high at $97.44 earlier in the session.

The tech sector underperformed the broad market, however Cisco (NASDAQ:CSCO), the world’s largest networking gear maker, gained 1.34% to $21.29, climbing above its calculated resistance at $21.16 and posting the biggest percentage gain in the Dow Jones Industrial Average. Oppenheimer raised its target price on the stock to $25 from $23 based on its checks, it believes Cisco's January quarter is tracking ahead of its original disappointing guidance, driven by a solid budget flush and with Europe also showing a positive contribution.

The financials also underperformed, but Bank of America (NYSE:BAC) climbed 1.33% to $14.43, climbing above its 20day moving average at $14.43 and posting one of the biggest percentage gains in the blue chip index.

Strong earnings helped a few individual names, but the rest of the market was mostly uninspired by results. Both electronic payment operators Visa (NYSE:V) and MasterCard (NYSE:MA) posted upside earnings surprises, thanks to an accelerated migration to electronic payments and U.S. consumers increased spending; but their shares did not reacted much as concerns persisted on the impact of the Durbin Fed proposal of capping fees, which will likely have a negative impact on U.S. debit business.

At the end of the week, Stocks gained, capping the best weekly gain in 2-months, as participants shrug-off a lackluster employment report, amid good corporate quarterly results.

The Labor Department said that the economy added 36,000 jobs in January, which was much less than the 148,000 jobs figure that was widely expected, with private employers adding only 50,000 jobs. But the unemployment rate fell sharply to 9.0% from 9.4%. It had been expected to increase to 9.5%, with many attributing the drop to changes in prevailing population estimates and inclement weather.

Technology, consumer discretionary, and staples were the bets performing sectors, while utilities and energy were the only sectors that posted declines. Semiconductors jumped more than 2%, providing leadership for the tech sector to post a 0.8% gain in the session. Altera (NASDAQ:ALTR), the maker of programmable logic devices, outperformed in the index and the sector.

ON Semiconductor (NASDAQ:ONNN), the provider of power efficient semiconductor solutions, jumped 3.36% to $11.54, ending very close to its calculated resistance at $11.78. ON rallied despite a downgrade to Market Perform from Outperform at BMO Capital. The firm raised its target price to $11.50 from $9 following earnings results. The firm noted the company has performed well fundamentally and its share price has responded accordingly. It said the Sanyo acquisition should add to the company's earnings; however, it appears this contribution is already priced in.

NVIDIA (NASDAQ:NVDA), the world leader in visual computing technologies, was also among the notable movers in the semiconductors space, as shares gained 2.29% to $25.67 after Bank of America Merril Lynch reinstated coverage of NVIDIA with a Buy.

Also boosting the move in the NASDAQ, Research In Motion (NASDAQ:RIMM), the maker of the Blackberry smart-phone, gained 1.63% to $63.69 after its was upgraded to Equal Weight from Under Weight at Morgan Stanley. The firm also added RIM as a Long Research Tactical Idea.

Apple (NASDAQ:AAPL) climbed 0.89% to $346.50, breaking above calculated resistance at $345.60. Apple move higher boosted the NASDAQ and the S&P 500 index after Verizon (NYSE:VZ) said that it had ceased online pre-orders of the iPhone 4 to existing customers and ended the most successful first day sales in the history of the company. The ISI Group said that Apple could gain a total of 10 million new users within 24-36 months of launching the iPhone on the Verizon network. It says that Apple’s sale at Verizon once again underscores that demand for the iPhone is extremely strong and the product's supply remains the bottleneck in Apple's ability to sell.

On the Dow Jones Industrial Average, Kraft (NYSE:KFT), DuPont (NYSE:DD), and Procter & Gamble (NYSE:PG) posted the biggest percentage gains. Kraft, the branded consumer food maker, jumped 1.46% to $31.19 and PG, the global consumer products company, gained 1.13% to $63.61 helped led the consumer staples sector to a 0.4% gain in the session.

The materials sector underperformed, ending unchanged for the session. April gold finished lower by 0.3% to $1349.50 per ounce, while March silver ended higher by 1.1% to $29.01 per ounce.

On the sector, DuPont (NYSE:DD), the third largest U.S. chemical producer, gained 1.16% to $52.53, posting a new 52-week high at $52.63 during the session.

Energy stocks saw weakness, as crude oil was under pressure from a higher Dollar and as traders reacted to the tepid jobs report in the largest crude oil consuming economy in the world. March crude oil shed 1.7% to settle at $89.03 per barrel.

And financials were unchanged for the session, with big banks JPMorgan (NYSE:JPM) and Bank of America (NYSE:BAC) providing a source of weakness. Both dragged the most in the blue chip index. The lackluster report on employment signaled the U.S. consumer would continue to be under pressure, which does not bode well for Bank of America. The Charlotte, NC based bank has the biggest exposure to the U.S. consumer. Shares of Bank of America fell 0.97% to $14.29, breaking below its 20day moving average.