MIDDAY ACTION, Feb. 1
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February 1, 2007
Stocks stay positive in midday trading, but come off their morning highs. The major market indices closed out the month with a nice rally on Wednesday following the FOMC statement. Earnings news has been mixed with the tech sector coming under some pressure, while Exxon Mobil (XOM) bested expectations on record profits in 2006. Economic news has been mixed as well with the ISM Index moving back into contraction territory. Trading could remain flat the rest of the session with traders waiting to see what the employment data has to say tomorrow.
Earnings continue to be a major story on the Street and XOM was one of the stories in the spotlight. This oil giant bested estimates by 18-cents a share, but did see a drop off in profits from the third quarter. Nonetheless, the company made more in 2006 than any company in history, bringing in $39.5 billion in profits. Revenues on the year were at an amazing $377.6 billion. XOM shares are up about half a percent in midday trading.
Google (GOOG) shares were struggling Thursday after the Internet giant announced earnings last night. Even though the company almost tripled its profits in the quarter, there have been concerns about higher costs and valuation for the stock. Shares are off 1.5 percent today to trade near $494. Comcast (CMCSK) is stock that is seeing lower prices following earnings. The cable provider is off more than 3 percent after failing to meet analyst expectations.
In other tech stock news, Dell (DELL) warned that earnings and revenues would fall short of estimates in the fourth-quarter. However, the stock is higher on the session due to the fact founder Michael Dell will be put back as CEO of the company. Mr. Dell will replace Kevin Rollins, who resigned his position as CEO and director. Mr. Dell has stepped down as CEO three years ago and it seems that traders are pleased to see him back.
The ISM Index, which measures manufacturing activity across the country, fell to 49.3 in January. This is down from 51.4 in December and was below estimates for a reading near 52.0. Any reading below 50 is considered a state of contraction and this could influence decisions on interest rates in the future. Of course, things can change quickly and the manufacturing sector has lagged growth in the broader economy for some time now.
Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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