Stocks Rebound After Early Sell-Off on Optimism for Greek Deal

Published on Tuesday, 07 February 2012 14:05 Written by J Hawk

New York, February 7^th (TradersHuddle.com) – U.S. stocks recovered after opening lower this morning after news of progress towards a deal with Greece began to materialize. According to some news reports from Greece, Greek Prime Minister Lucas Papademos will present a document laying out the provisions of a deal to leaders of the three political parties backing his interim government.

Papademos had spent hours earlier today negotiating with the “troika” group of international lenders — the IMF, the EU and the ECB — to arrive at an agreement for Greece to receive its second bailout of€ 130 billion.

No significant economic data was released this morning, although, Fed Chair Bernanke testified before the Senate Budget Committee earlier today, in which he stated, “I want to disabuse any notion that there is a priority for maximum employment. We say very explicitly, we take a balanced approach. Congress gave us a dual mandate. We work to bring both sides of the mandate back towards the target.” referring to the Fed’s adoption of a 2 percent inflation target.

At midday, the Dow Jones Industrial Average was up +26 points or -0.2% to 12,873, after having traded as low as 12,783 shortly after the opening. The the broader based indexes also recovered early on, with the S&P 500 gaining +2 or +0.1 percent to 1,346, and the Nasdaq Composite index tacking on +5 or +0.2 percent to 2,907.  

U.S. Stocks in the News

Coca-Cola (NYSE: KO) stock was up +0.83 or +1.22 percent midday to $68.86 per share, after the  world’s largest soft drink maker reported better than expected quarterly earnings. The company announced fourth quarter net income had dropped by 71 percent from a year ago to $1.65 billion, or 72 cents per share, compared to $5.77 billion or $2.46 cents per share in Q4 2010. Nevertheless, 2010’s Q4 reflected a onetime gain of $1.74 from the purchase of its North American bottlers’ operations. Revenue for the quarter edged out the consensus at $11.04 billion, versus $11 billion that was expected.

Apple Inc. (NASDAQ: AAPL) stock was up +5.31 or +1.14 percent at midday to $469.25 per share, after Barclays said that it estimates that the new highly anticipated Apple TV set or iTV could add $5.40 per share on earnings in fiscal 2013. The stock was also on the news, as a Chinese affiliate of a Hong Kong company had filed a temporary restraining order against Apple in a Shanghai court. The order against the Cupertino, CA company seeks to prevent the maker of iPad and other popular electronics, from using the iPad name in mainland China. Proview Technologies, the company making the filing, registered the iPad trademark in mainland China, the EU, Mexico, South Korea, Singapore, Indonesia, Thailand and Vietnam between 2000 and 2004, according to trademark databases. 

Coinstar (NASDAQ: CSTR) stock was up +9.49 or +18.77 percent midday to $60.05 per share after the company yesterday reported fourth quarter earnings of $31.5 million or $1 per share, versus $11.7 million or 35 cents per share for the same period one year ago. The analyst consensus was for 65 cent per share. In addition, sales for the company rose 33 percent to $520.5 million versus an expected $498 million. Also boosting Coinstar’s stock price was an agreement to buy NCR’s (NYSE: NCR) DVD business for up to $100 million and a deal with Verizon Communications (NYSE: VZ), which would help establish Coinstar in the video-streaming business.