Daily Market Brief for February 07, 2007
Stocks closed slightly higher, with the Dow Jones Industrial Average barely finishing in positive territory after hitting a new record high, as a drop in crude-oil prices weighed on the energy sector, while the technology sector remained boosted by Cisco Systems Inc.'s (Nasdaq: CSCO) upbeat earnings. Investors have now to look at where the next good news is coming from.
Today, the Dow Jones industrial average closed up 0.56 or 0.0% to 12,666.87, the broader S&P 500 closed up 2.02 or 0.14% to 1,450.02, the Nasdaq closed up 19.01 or 0.77% to 2,490.50.
Market breadth remained positive. On the New York Stock Exchange, winners beat losers 19 to 13 on volume of 1.5 billion shares. On the Nasdaq, advancers beat decliners 18 to 11 on volume of 2.2 billion shares.
On the economic front, the first read on fourth-quarter productivity came in at a 3% growth rate, up from the previous month and beating the 2% forecast. Unit labor costs, the report's inflation component, came in at a smaller-than-expected 1.7% rate. With businesses getting more output out of each hour worked, the rising costs of pay and benefits pose less of an inflation risk. This furthers bets that economic growth, although moderating, remains solid, and that inflation pressures are dwindling. These numbers ought not to be seen as unduly threatening by the Fed.
Shares of Cisco Systems (Nasdaq: CSCO) rose 4% after the company reported quarterly sales and earnings that rose from a year earlier and topped forecasts. The company also issued bullish guidance for its current quarter, giving hope to investors that corporate tech spending will show strength in 2007. Sales came in at $8.4 billion, compared to projections of $8.28 billion, and up 27% over the last year. The second-quarter net income was up 40% to $1.9 billion.
Shares of Amazon.com Inc. (Nasdaq: AMZN) rose 1.9% after it announced it is partnering with TiVo Inc. (Nasdaq: TIVO) to offer movies and TV shows that can be sent to a TiVo box or a computer, and can also be used on portable devices. Shares of TiVo Inc gained 9%.
Stock of Whirlpool (NYSE: WHR) lost 2.9% to $86.70. 3% as the company reported a 13% profit decline on discontinued operations, while revenue rose 25%. Its net income totaled $117 million, compared with $114 million a year earlier. Third-quarter earnings from continuing operations totaled $134 million, sales in the third quarter surged 35% to $4.8 billion, and the total revenue rose about 8%.
Crude oil for March delivery fell $1.17 to $57.71 a barrel on the New York Mercantile Exchange.
