Stocks Mixed on China Pledge, Greek Delay; Apple Pulls Back

Published on Wednesday, 15 February 2012 15:02 Written by J Hawk

New York, February 15^th (TradersHuddle.com) – U.S. stock markets opened mixed this morning after news that the Governor of the People’s Bank of China made comments that the Chinese central bank would increase its investments in Euro based assets, and that China would become more involved with the European Financial Stability Mechanism.

Nevertheless, European Union finance ministers intend to delay giving Greece at least part of the second bailout until after Greece holds elections in April. Earlier today, Greek Finance Minister Evangelos Venizelos stated that the wealthier European nations were “playing with fire” by considering expelling Greece from the 17-nation Eurozone as talks for the loan hit another obstacle.

At midday, the Dow Jones Industrial Average was down -18 point or -0.1 percent to 12,860, while the broader based S&P 500 was up +5 points or -0.4 percent to 1,355, while the Nasdaq Composite index was +25 points higher or +0.8 percent to 2,956.

Economic numbers were also mixed this morning, with U.S. TIC Long Term Purchases declining to 17.9 billion, from 61.3 billion with an analyst consensus of 45.4 billion, while the Capacity Utilization Rate came out at 78.5 percent as widely expected.

Also out this morning was the Empire State Manufacturing Index, which increased to 19.5 from a previous reading of 13.5, with analysts expecting a print of 14.7, and Industrial Production, which came out with a flat reading, versus an increase of +0.7 percent that was expected.  

U.S. Stocks in the News

Kellogg Co. (NYSE: K) stock was up +2.70 or +5.4 percent midday to $53.00 per share, after the company announced it would be purchasing the unit that makes Pringles potato chips from Procter and Gamble (NYSE: PG) for $2.7 billion. This morning’s announcement came one week after a deal between P&G and Diamond Foods (NASDAQ: DMND) to acquire the unit fell through. The failure of the deal with Diamond Foods was due to an accounting scandal which had Diamond Foods replace both its chief executive and chief financial officers, stating it would restate two years of results.

Zinga Inc. (NASDAQ: ZNGA) stock was down -1.65 or -11.5 percent at midday to $12.70 per share after the company reported a net loss of $435 million due to having to cover $510 million in stock-based compensation to its employees. Excluding the payment, non-GAAP earnings came to a profit of $0.05 per share, which beat the analyst consensus of $0.03 per share. The earnings release was the first for the company since going public in December for $10 per share. Zynga makes social Internet games such as Mafia Wars and Farmville.

BioCryst Pharmaceuticals Inc. (NASDAQ: BCRX) stock was up +0.58 or +15.8 percent to $4.10 per share midday after the company reported that preclinical results for BCX5191, its potential treatment drug for hepatitis C showed the drug was effective in producing antiviral activity against the hepatitis C virus. The preclinical results indicated that BCX5191 showed high oral bioavailability with the drug actively transported to the liver. BioCryst noted that BCX5191 has the potential for becoming the best in its class oral treatment regime for hepatitis C patients.

Apple (NASDAQ: AAPL) was falling 0.84% to $505.18, reversing from an early surge that took it to an all-time high of $526.29 on speculation the NASDAQ could lower the weighting of the stock in their indexes. The stock jumped on speculation over a possible dividend and the potential of an iTV. CEO Tim Cook at an investor conference said that the company is in very active discussions at the board level about what to do with its cash. At the same appearance he also hinted that Apple was working on something big, which many saw it as a reference to the iTV.