Stocks Lower on Greek Concern and Mixed Earnings News

Published on Tuesday, 24 January 2012 14:55 Written by J Hawk

New York, January 23^rd (TradersHuddle.com) - U.S. stocks opened lower this morning as investors considered mixed earnings reports and the lack of any agreement on a debt restructuring deal for Greece. The Dow Jones Industrial Average opened about -0.4% lower and was down -46.20 or -0.36% to 12,662.62 midday after having lost 12 points yesterday, breaking the last five sessions’ winning streak.

Broader based stock indexes were also lower midday, with the NASDAQ composite down –0.92 or -0.03% to 2,783.25, while the S&P 500 shed -3.92 or -0.30% to fall to the 1,312.03 level.

U.S. economic data this morning was again sparse, with the Richmond Manufacturing Index showing an unexpected increase in manufacturing. The data came out showing a reading of 12 for the month of January, versus a reading of only 3 in December. Earnings reports were generally mixed this morning, putting pressure on all stock indices as traders patiently await earnings for Apple Corp., which will be released later today. 

U.S. Stocks in the News

Verizon Communications (NYSE: VZ) stock shed -0.83 or -2.16, trading at $37.57 per share midday, after the company announced lower than expected fourth quarter earnings. The company reported a 71 cent loss per share for the quarter, primarily due to a pension related charge. Excluding the pension charge, Verizon earned 52 cents per share, which was just a penny below analyst estimates.  

Nevertheless, revenues for the fourth quarter grew +7.7 percent from Q4 2010, with Verizon taking in $18.3 billion from its wireless division. The carrier said it added 1.2 million wireless contract subscribers, which was a 38% improvement over last year, in addition to 4.3 million iPhone activations for its G4 mobile broadband network.  

MacDonald’s Corp. (NYSE: MCD) stock traded lower this morning, dropping -1.92 or 1.90 percent to $99.03 per share, despite the company reporting better than expected earnings of $1.38 billion or $1.33 per share, versus the analyst consensus of $1.29. This compares to Q4 2010 earnings of $1.24 billion or $1.16 per share.    

The increase was 10.8% better than 2010’s fourth quarter results with revenue rising +9.8 percent to $6.82 billion from Q4 2010. MacDonald’s CEO Jim Skinner, in a statement after the earnings release stated that, “During 2011, McDonald’s continued momentum drove higher profitability and market share gains as we fortified our leadership position around the world.”

EMC Corp. (NYSE: EMC) stock was up +1.36 or +5.8% to 24.80 per share midday, after the company reported a 32 percent increase in fourth quarter earnings. Net income for Q4 rose to $832 million or 32 cents per share on sales of $5.57 billion, versus $628 million or 29 cents per share on sales of $5.49 billion for Q4 2010. With the exclusion of some items, the company’s fourth quarter profit was 49 cents per share, versus the analyst consensus of 46 cents.

Texas Instruments (NASDAQ: TXN) stock was down -0.36 or -1.08% to 32.84 midday after the company reported better than expected fourth quarter earnings, but its outlook for 2012 fell short. The computer chip manufacturer reported earnings had fallen to 42 cents per share in Q4 2011, from 78 cents for the same period a year ago.

The TI number included a 16 cent per share charge due to its takeover of National Semiconductor and a charge of 7 cents per share that involved the closure of two plants. Texas Instruments is now looking at 2012 first quarter profits to come in at 26 to 34 cents per share, versus analyst expectations of 41 cents per share.