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NASDAQ closes at 11 year high; Diamond Foods, PepsiCo and Oracle Corp in focus

Friday, February 10, 2012 by Proactive Investors

Gains on Wall Street were modest overnight, but the rally continues. The Dow Jones is now in sight of the 13,000 point technical barrier, with the NASDAQ hitting fresh 11 year highs.

U.S. equity markets posted modest gains overnight as investors tried to gauge the impact of a Greek austerity deal.

By the close the Dow Jones was up eight points to 12,892, with the NASDAQ hitting a new 11 year high after adding eleven points to 2927.

In Greece, political parties reached an agreement on austerity measures and financial reforms necessary to receive a second bailout of 130 billion euros, igniting investor optimism that the debt-stricken country will be able to avoid a default.

Greek Finance Minister Evangelos Venizelo will present the deal this afternoon at the meeting of finance ministers from the euro area.

The deal was a necessary step for the receipt of more bailout funds from the EU, the IMF and the European Central Bank. This money is key for Greece to make a 14.5 billion euro bond payment in March.

In corporate news, shares of Diamond Foods (NASDAQ:DMND) sank by as much as 40% after it said it will need to restate two years worth of financial results, after an auditing probe discovered that the snack foods company had improperly accounted for payments made to walnut growers.

The company also put CEO Michael Mendes and CFO Steven Neil on administrative leave.

Snacks and soft drinks giant PepsiCo (NYSE:PEP) Thursday posted 4% growth in fourth-quarter earnings as it said it would shedding over 8,000 jobs, 3 percent of its workforce, by 2014.

For the quarter ended December 31, PepsiCo profits came in at $1.42 billion, or 89 cents per share, from $1.37 billion, or 85 cents per share a year earlier. Adjusted earnings in the latest quarter totaled $1.15, while revenue rose 11 percent to $20.2 billion.

Analysts estimated earnings of $1.13 a share and revenue of $19.89 billion.

Oracle Corp. (NASDAQ:ORCL) Thursday agreed to buy web-based human resources management software maker Taleo Corp. (NASDAQ:TLEO) for $1.9 billion as the company seeks to strengthen its foothold in cloud computing.

Cisco Systems (NASDAQ:CSCO) late Wednesday beat estimates for fiscal second-quarter earnings as the networking equipment maker reported improved profit margins.

Groupon (NASDAQ:GRPN) said Thursday its fourth quarter loss was due to an incredibly high tax rate, associated with its international operations. For the three months that ended December 31, the daily deals site posted a net loss of $42.7 million, or $0.08 loss per share, compared to a $378.6 million loss, or $1.08 loss per share, a year ago.

Adjusted for certain items, including $34.8 million in tax expenses, an effective 1,600 percent tax rate, and other one-time expenses, the company's loss was $9.8 million, or $0.02 loss per share. Total revenues for the quarter nearly tripled to $506.5 million, from $172.2 million in the same period last year.

Analysts polled by Thomson Reuters had anticipated a three-cents per share profit for the quarter, on $475 million in revenues.

After the closing bell, earnings from professional social networking site LinkedIn (NASDAQ:LNKD) and video games publisher Activision Blizzard (NASDAQ:ATVI) are due.

In economic news in the US, initial unemployment claims fell by 15,000 to 358,000 during the latest week, a level near the four-year low hit in January. Economists expected 370,000 claims, compared to the previous week's 373,000.

Wholesale inventories rose 1% in December, topping expectations for a 0.4% increase.

Commodities

In NYMEX futures trading, oil for March delivery increased $1.00 to $99.71 a barrel and gold futures for April delivery added $9.90 to settle at $1,741.20 an ounce.

Europe

The European Central Bank left its benchmark interest rate unchanged at 1%, while the Bank of England also left rates steady.

The Bank of England also said it would buy another 50 billion pounds of UK government bonds to help boost the British economy.

European markets finished higher today with shares in Germany leading the region. The DAX was up 0.59% while France's CAC 40 rose 0.43% and Britain's FTSE 100 gained 0.33%.

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