Stocks Higher on Renewed Confidence in Global Economy

Published on Wednesday, 01 February 2012 13:00 Written by J Hawk

New York, February 1^st (TradersHuddle.com) – U.S. stocks traded higher this morning as positive economic news from around the world supported equity markets domestically and abroad. Manufacturing data out of China, some countries in the European Union and the United Kingdom as well as the United States signaled the world economy is moving towards recovery.

The Dow Jones Industrial Average rose more than +120 points on the opening or +1 percent to 12,750, while the broader indexes followed suit, with the S&P 500 index gaining +11, or +0.9 percent and the Nasdaq Composite gaining 18 points or +0.6 percent.

At midday, the market had extended its gains with the Dow gaining +136 or +1.05% to 12,765, the S&P 500, up +14 or +1.07% to 1,326, and the Nasdaq Composite index gaining +32 or +1.14% to 2,846.

Economic data in the United States also lifted the stock market, with ADP Non-Farm Employment Change showing the U.S. economy had added 170,000 private sector jobs in January, just below analyst expectations. Nevertheless, the previous number was significantly revised downward from +325K to +292K.

Also out was U.S. ISM Manufacturing PMI, which came in slightly below analyst expectations at 54.1, versus an expected print of 54.6 and Construction Spending, which improved by +1.5 percent m/m, versus an expected increase of only +0.7 percent.    

U.S. Stocks in the News

Amazon.com Inc. (NASDAQ: AMZN) stock was down -17.72 or -9.14 percent midday to $176.66 per share despite the company reporting better than expected earnings of 38 cents per share for the fourth quarter of 2011. The EPS reflected a 58 percent drop from the same period last year, but beat analyst estimates of earnings of 16 cents per share, according to a survey of analysts performed by Zack’s Investment Research. Despite the drop in income, sales for Amazon rose by 35 percent to $17.43 billion, compared to sales of $12.95 billion in Q4 of 2010.

Marathon Petroleum Corp (NYSE: MPC) stock was trading up +2.77 or +7.27 percent at midday to $41.00 per share, after having traded as high as $43.48 earlier in the session. The operator of six refineries was spun off from Marathon Oil Company in July to focus drilling operations on U.S. shale formations such as Bakken in North Dakota and Eagle Ford in Texas. The company reported a loss of -$75 million or -21 cents per share for Q4, versus a profit of +$230 million or+ 64 cents per share one year ago. The company announced earlier today that it was considering a corporate structure for pipeline operations to reduce tax liabilities and would implement a $2 billion share buyback.  

Sony Corp. ADS (NYSE: SNE) stock was up +0.06 or +0.32 percent to $18.28 per share midday after the company announced it would be replacing its Chief Executive Officer Howard Stringer in April. Stringer will be replaced by Kazuo Hirai, who formerly worked in the company’s music and entertainment division and was singled out for the top job after turning around Sony’s Playstation unit.   

Apple (NASDAQ: AAPL) stock was up +0.11 percent to $457 after it posted a new all-time high of $458.99. Yesterday reports surfaced that it had hired the CEO of a UK electronics retailer to be its new head of retail.

And Broadcom (NASDAQ: BRCM) stock was surging 8.5% to $37.27 after the company beat earnings expectation and provided upside guidance. The company also increased its quarterly dividend by 11% to $0.10 per share.