February 9, 2009

Better Trades US News

In a day that saw the markets teeter in and out of positive territory today, the final bell closed the session with the major indices mixed. With no economic data released, and a few big named companies reporting their quarterly earnings, the markets wavered for much of the day on pure speculation.

Larger companies, such as Whirlpool (WHR) and Hasbro (HAS) lead the way in company reports. Both companies failed to impress. With consumer demand continuing to decrease, Whirlpool Corp. announced this morning that the company’s 4Q profits decreased nearly 77% year-over-year.

Posting net earnings of $44M, or $0.60 per share, WHR missed analysts’ projections for quarterly earnings of $0.78 per share, after posting net income of $187M, or $2.38 per share a year ago.

Revenues were also lower from the past year’s 4Q, falling from $5.32B to $4.32B, a decline of nearly 19%. Analysts were looking for the home appliance maker to post revenues of $4.88B. Shares of WHR were surprisingly higher at the close, adding $0.74, or 2%, to end at $37.13 per share.

The other well-known company reporting this morning was Hasbro Inc. (HAS). Hasbro showed that they too were not immune to the lack of consumer spending during the 4Q. In their recent quarter, HAS posted net earnings of $93.6M, or $0.62 per share, compared to last year’s tally of $133.7M, or $0.84 per share, a decrease in net income of nearly 30%.

Today’s reading came in well below analysts’ expectations in earnings of $0.75 per share. Meanwhile, revenues were also off, year-over-year, falling 5% to $1.23B. Market projections had the nation’s second largest toy manufacturer posting quarterly sales of $1.27B. Shares of HAS were also up unexpectedly, adding nearly 7%, or $1.53, to close the session at $25.07 per share.

Looking elsewhere, the price of oil retreated at the close of trading today, as the price for a barrel of light, sweet crude for March delivery dipped $0.61 to settle at $39.56 a barrel. In an effort to increase demand within the crude markets, an OPEC representative stated earlier that the cartel is nearing their previously announced goal of cutting production to 4.2 million barrels per day.

In other attention grabbing news, a statement from a JPMorgan analyst to clients, it was mentioned that the possibility of a bankruptcy filing by General Motors Corp. (GM) and/or Chrysler LLC would have less impact on the economy as a whole as it would have a few months ago.

Both companies are facing a February 17 deadline to submit a new restructuring plan to Capital Hill outlining their plans for their future operations in conjunction with the $17.4B bailout received at the end of last year. in response, the U.S. Treasury Dept. has retained two law firms with extensive bankruptcy knowledge in case either or both of the companies file for Chapter 11.

By the sound of the closing bell, the major indices were mixed as the markets showed little direction in trading today. At the conclusion, the Dow Jones was down just over 9 points at 8,270.87, after gaining more than 3.5% last week.

Meanwhile, the broader market indicators concluded the day higher as the S&P 500 was barely above breakeven, adding 1.30 points to close at 869.90, while the tech heavy NASDAQ was down less than a point to finish at 1,591.56.

Looking ahead towards tomorrow, the markets may be influenced by the sole economic report, Wholesale Inventories, in which economists are projecting a decline of 0.7% in December, up from November’s reading of a 0.6% decline.

Tomorrow’s session may also be swayed by companies reporting their earnings before the markets open, which will include Molson Coors Brewing (TAP), Pepsi Bottling (PBG), and Qwest (Q).

2009 Better Trades Article

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BRIAN MULLIN