Stocks Mixed; Greek Concern and Mixed Earnings Weigh

Published on Tuesday, 24 January 2012 18:28 Written by Christopher Lynn

New York, January 24^th (TradersHuddle.com) – Stocks closed mixed on a lackluster trading session, with the S&P 500 snapping a 5-day winning session streak amid mixed earnings news and after Greece debt restructuring negotiations stalled, spurring concern over a disorderly default for the indebted nation.

The Dow Jones Industrial Average fell 33.07 points, or 0.26%. The S&P 500 index lost 1.35 points, or 0.1%, while the NASDAQ climbed 2.47 points, or 0.09%.

The market started lower amid weakness in Europe following the rejection of the Greek debt swap deal by euro zone finance ministers. The rejection of the debt swap deal raised worries that Greece was heading into a disorderly default, which coupled with a report speculating that Portugal might need a second bailout weighed on sentiment amid a busy earnings-reporting morning.

In Europe, equity markets closed lower amid increased worries that Greece was heading to a messy default. Banks were the worst performers due to their exposure to peripheral euro zone debt on concern over additional write-downs, as talks for a deal with private bondholders of Greek debt stalled.

Most S&P 500 sectors closed in negative territory, with utilities, consumer staples and energy posting the biggest percentage declines, while consumer discretionary, industrials, and healthcare gained.

The Utilities SPDR ETF (NYSE: XLU) fell the most in the S&P 500 select sectors, with most of the components closed in negative territory. Ameren (NYSE: AEE) fell 1.8% to $31.26 posted the biggest decline in the space. Meanwhile, in the consumer staples space Molson Coors Brewing (NYSE: TAP) weighed on the sector, as the shares tumbled 2.64% to $42.84 after UBS downgraded the stock to a Neutral from Buy. The firm also lowered its target price to $45 from $46.

The energy sector was also lower as the European Union’s ban on Iranian oil imports and a lower global economic growth estimate from the International Monetary Fund combined to weigh on oil futures. ConocoPhillips (NYSE: COP), the third-largest U.S. oil company, closed slightly higher on the day. ConocoPhillips reports fourth-quarter results before the bell tomorrow. On average analysts expect a profit of $1.83 per share on revenues of $40.56 billion.

Also in the sector and weighing on the space was Baker Hughes (NYSE: BHI), a stock that has been in a tailspin for several months, delivered a decent earnings report but still closed lower. Shares of Baker Hughes are now down more than 16% in the past 90 days.

On the financial space, Earnings disappointments weighed, as both Travelers (NYSE: TRV) and Zions Bancorporation (NASDAQ: ZION) fell after missing earnings expectations.

Travelers tumbled 3.8%, posting the biggest decline in the Dow Jones Industrial Average after its earnings were below expectations. The company said that it earned $1.48 per share, $0.02 worse than consensus on revenues of $6.4 billion, which were up 1% sequentially. Net premiums written climbed 0.5% year over year to $5.26 billion. Meanwhile, Zions plunged to the bottom of the S&P 500, as shares closed lower by 7.55% to $17.15 after it missed earnings by $0.03 per share and the stock was downgraded to a Hold at Sifel Nicolaus.

Also in the sector, but moving to the upside was Bank of America (NYSE: BAC). BofA continued to outperform this start of the year, as shares gained 0.69% in the session, closing above calculated resistance at $7.29. The Charlotte, NC based bank gained 0.69% to $7.34 despite euro zone jitters and concern over a possible messy Greek default.

In the consumer discretionary space, McDonald’s (NYSE: MCD) fell 2.18% to $98.75 even after the world’s largest restaurant chain posted record profits. McDonald’s posted one of the biggest declines in the blue chip index despite it beat earnings estimates by $0.03 per share. The company posted inline revenue of $6.8 billion, as it also said that it expects January sales to grow by 5.5-6.5%.

Also in the space, Coach (NYSE: COH), the leading American designer and maker of luxury lifestyle handbags and accessories, rallied 5.8% to $67.97 after better than expected results. The company said that it earned $1.18 per share, $0.03 better than consensus, on revenues that climbed 14.6% year over year to $1.45 billion versus consensus of $1.43 billion.

In the technology space, better than expected earnings from EMC Corp. (NYSE: EMC) and Western Digital (NYSE: WDC) helped the sector, with both stocks posting the biggest gains in the sector.

EMC rallied 7.2% to $25.14 after the company beat earnings by $0.03 per share on revenues that were above consensus, while it issued inline guidance. And Western Digital jumped 6.25% to $36.88 after it was also upgraded to a Buy from Hold at Needham, with the firm setting its target price at $41.

Also Apple (NASDAQ: AAPL) fell 1.64% to $420.41 ahead of its quarterly results, with participants trimming positions ahead of the report. In after hours however, Apple was surging 7.7% to $452.75, trading at a new all-time high and becoming the world’s most valuable company after it posted results that crushed estimates, as the iPhone and iPad sales soared. Apple posted earnings of $13.87 per share, practically double the $6.43 per share it posted last year. Revenue surged 73% year over year to $46.3 million. The tech giant said it sold 37 million iPhones, 15.4 million iPads and 5.2 million Macs during the quarter, all record shipments.