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Dow Jones closes 83 points higher; Boeing, United Technologies, ConocoPhillips, Illumina in focus

Thursday, January 26, 2012 by Proactive Investors
U.S. equity markets closed higher overnight as investors cheered the Federal Reserve's decision to keep rates on hold until late 2014. U.S. equity markets closed higher overnight as investors cheered the Federal Reserve's decision to keep rates on hold until late 2014.

Overnight, U.S. equity markets were higher Wednesday afternoon as investors cheered the Federal Reserve's decision to keep rates on hold until late 2014.

By the close the Dow Jones had jumped 83 points to 12,759, with the NASDAQ soaring 32 points to 2818.

The Fed's Open Market Committee has pledged to keep interest rates low until late 2014, maintaining rates in the 0% to 0.25% range for about six months longer than expected. Many market watchers had expected rates to remain unchanged until mid-2014.

The Fed had previously said it would hold rates low until mid-2013.

In a press briefing, the Fed's chairman Ben Bernanke said he sees a "gradual acceleration" in the US economy with the jobless rate coming down "only slightly".

Despite seeing "strong" economic signs, Bernanke "couldn't yet say" that strong growth was here to last.

It was a busy earnings day, with aerospace giant Boeing Co. (NYSE:BA) posting higher fourth-quarter earnings on stronger commercial plane deliveries.

For the quarter to December 31, net profit amounted to $1.4-billion, or $1.84 per share, far surpassing Wall Street expectations of $1 per share.

Last year, Boeing posted fourth-quarter earnings of $1.2 billion, or $1.56 per share.

Revenue came in at $19.56 billion, also better than expected.

Aerospace and defence giant United Technologies Corp. (NYSE:UTX) posted fourth-quarter net income of $1.33 billion, or $1.47 per share, up from $1.2 billion, or $1.31, a year earlier.

Adjusted net earnings were $1.46 per share against $1.34 seen last year. Revenue reached $14.97 billion from $14.86 billion.

A survey of analysts by FactSet Research produced consensus estimates of $1.46 per share of profit on $15.06 billion of revenue.

Oil major ConocoPhillips (NYSE:COP) saw its fourth quarter earnings beat Street estimates as rising oil prices offset a weaker performance at its refineries. During the fourth quarter, profits rose to $3.4 billion, or $2.56 per share, up 70 percent from $2.0 billion, or $1.39 per share, a year ago.

Adjusted for certain one-time items, including a $1.5 billion gain from the sale of certain assets and a $100 million settlement charge related to the oil spill at Bohai Bay, earnings were $2.7 billion, or $2.02 per share.

According to Thomson Reuters, analysts were expecting $1.76 per share.

Illumina (NASDAQ:ILMN) shares surged over 40% Wednesday after Swiss pharmaceutical giant Roche Holding (PINK:RHBBY) made a hostile $5.7 billion cash bid to buy the company at an 18% premium over Illumina’s closing price on Tuesday.

Apple's (NASDAQ:AAPL) fourth-quarter earnings blew past Wall Street expectations late Tuesday as consumers bought almost unprecedented numbers of iPhones and iPads.

The company reported a net profit of $13.06 billion, or $13.87 per share for the three months to December 31. Analysts had expected Apple to earn $10.16 per share, according to Thomson Reuters.

Revenue surged 73% to $46.33 billion, easily beating the average Wall Street analyst estimate of $38.91 billion.

Apple sold 37.04 million iPhones - its flagship product - and 15.43 million iPad tablets, doubling from a year earlier and easily outpacing already heightened expectations for a strong holiday season.

After Wednesday's closing bell, online broker E*Trade (NASDAQ:ETFC) and streaming media firm Netflix (NASDAQ:NFLX) are due to post quarterly earnings.

On the economic front, pending home sales for the month of December dropped by 3.5%, after rising 7.3% in the prior month. Economists were expecting sales to fall 3%.

Commodities

In NYMEX futures trading, crude for March delivery rose 79 cents to $99.74 a barrel while gold futures for February delivery gained $37.00, or 2.2%, to $1,701.50 an ounce.

Europe

European markets ended the day mixed, with the FTSE 100 down 0.5%, the DAX gaining 0.01% and France's CAC 40 falling 0.3%.

In the UK, the government reported a worse-than-expected 0.2% decline in fourth quarter GDP on weakness in the production and construction sectors, prompting fears of a recession. Another quarter of contraction would put Britain officially in a recession.

 

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