Stocks Turn Negative on Lower Consumer Confidence

Published on Tuesday, 31 January 2012 13:11 Written by J Hawk

New York, January 31^st (TradersHuddle.com) – U.S. stocks turned lower midday after opening higher early this morning. The Dow Jones Industrial Average opened up over +60 points, or +0.05% this morning to 12,715, while the broader based S&P 500 was up +8 to 1,320 and the NASDAQ Composite had gained +17 or +0.06% to 2,829.

The strength in the market early on was attributed in part to 25 of the 27 countries in the European Union agreeing to solidify fiscal ties. Nevertheless, the market rally lost wind after the release of disappointing U.S. economic numbers. At midday the Dow was down -66 or -0.5 percent to 12,587, while the NASDAQ was down -9 or 0.3 percent to 2,802 and the S&P 500 index off -4.44 or -0.34 percent to 1,308.

The Conference Board’s survey of U.S. Consumer Confidence for 5000 households for January came out at 61.1, considerably lower than the 68.2 that was expected. Also out were Chic ago PMI, which printed at 60.2, versus 63.1 expected and housing prices were also hit, with the S&P Case-Schiller Composite-20 HPI declining by -3.7% year on year, versus an expected decline of -3.3%.

U.S. Stocks in the News

Exxon Mobil (NYSE: XOM) stock shed -$1.06 or -1.24 percent midday, trading at $84.43 per share, after it announced lower than expected fourth quarter earnings. The company reported net income of $9.4 billion or $1.97 per share for the quarter, versus $9.25 billion or $1.85 per share in the same quarter last year, a gain of +1.6 percent. Analysts were expecting earnings of $2.01 per share for the quarter.   

Apple Inc. (NASDAQ: AAPL) stock was up +2.40 or +0.53 percent midday to $455.41 per share, after the company reported it would be hiring John Browett, Chief Executive Officer of UK electronics firm Dixons, to head up retail expansion for the company. Browett, who recently helped turn around Dixons’ retail operations, will replace Ron Johnson at Apple. Browett will be responsible for Apple’s retail strategy and in expanding Apples retail outlets around the world, which currently number about 300.

United Parcel Service (NYSE: UPS) stock was down -1.27 or -1.67 percent to $74.88 per share midday, after having traded as high as 76.93 per share earlier today. The company reported fourth quarter net income fell to $725 million or 74 cents per share, compared to $1.025 billion or $1.02 per share for the same period one year ago. The results included a $527 million charge related to pension expenses. After the adjustment, Q4 profits came to $1.28 per share, beating the street’s estimates of $1.26 per share.

Radioshack Corp. (NYSE: RSH) stock was down -2.95 or -28.74 percent to $7.29 per share midday after the company reported preliminary earnings of between 11 and 13 cents per share in the fourth quarter. Analysts were predicting earnings of 37 cents per share. The dismal quarterly results were attributed to promotions during the holiday season as well as “underperformance” for its Sprint Nextel Corp. wireless business.  Radioshack also reported it had bought back $11.9 million worth of its own shares in the fourth quarter leaving the company with a cash position of $590 million, versus $569 million one year ago. Fourth quarter earnings for Radioshack are expected to be released on February 21^st.