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Spot gold soars to US$1732oz, Dow Jones softer; Caterpillar, Lockheed Martin report earnings

Friday, January 27, 2012 by Proactive Investors
Precious metals have found some major buying support in the past two days, with spot gold overnight hitting US$1732 an ounce, with silver sitting above US$33 an ounce. Precious metals have found some major buying support in the past two days, with spot gold overnight hitting US$1732 an ounce, with silver sitting above US$33 an ounce.

U.S. equity markets were only marginally softer overnight as home sales unexpectedly declined, marking the slowest year for builders since the government began tracking the data.

On the economic front, the Commerce Department said U.S. sales of new homes fell 2.2% in December to a seasonally adjusted annual rate of 307,000. For all of 2011, sales of new homes fell 6.2% to 302,000 -- the worst on record.

By the close the Dow Jones had eased 22 points to 12,734, with the NASDAQ 13 points lower at 2805.

In Europe, progress from Greece debt talks was still awaited as ongoing restructuring negotiations between representatives of private creditors and the country continue.

An agreement is a key condition for the ailing country to receive additional funds from the EU and IMF to make a necessary bond payment due in March.

In corporate news, investors digested a mixed batch of corporate earnings reports.

Heavy machinery maker Caterpillar (NYSE:CAT) posted record earnings in the fourth quarter on strong demand, easily beating Street estimates.

For the three months that ended December 31, the company posted earnings of $1.55 billion, or $2.32 per share, up 60 percent from $968 million, or $1.47 per share, a year ago.

Revenues hiked 35 percent in total, to $17.24 billion, from $12.81 billion a year earlier.

According to Thomson Reuters, analysts had expected $1.73 per share in profits, on $16.05 billion in sales.

Lockheed Martin (NYSE:LMT) said Thursday that fourth-quarter income dropped 29% as the US defense company posted a handful of special charges, as well as weaker results from its space systems and electronics systems businesses.

For the quarter that ended December 31, Lockheed Martin - maker of the F-22 Raptor and F-35 Joint Strike fighter jets - posted a profit of $683 million, or $2.09 per share, down from $961 million, or $2.67 per share, a year earlier.

Earnings from continuing operations fell to $2.14 from $2.28 per share, while revenue fell 4.3 percent to $12.21 billion.

Analysts surveyed by Thomson Reuters expected earnings of $1.94 per share on revenue of $12.31 billion.

Elsewhere, 3M (NYSE:MMM) also posted better than expected profits, as did Netflix (NASDAQ:NFLX), which saw shares rise over 21%.

After the closing bell Thursday, earnings are due from coffee chain Starbucks (NASDAQ:SBUX) and mobile phone maker Motorola Mobility (NYSE:MMI).

In other economic news, orders for durable goods climbed 3.0 percent last month, boosted by a surge in aircraft orders. Economists had forecast orders rising 2.0 percent.

Initial jobless claims for the week that ended Jan. 21 rose to 377,000, up from a revised 356,000 the week prior, according to the U.S. Labor Department. Economists had anticipated 375,000 claims.


Commodities

On the NYMEX, crude futures were up 0.07% to $99.47 a barrel and gold futures rose 1.34% to $1,725.90 an ounce.


Europe

European markets closed sharply higher Thursday with shares in Germany leading the region. The DAX was up 1.84% while France's CAC 40 rose 1.53% and Britain's FTSE 100 was higher by 1.26%.

 

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