U.S. Indexes Up; GDP, Earnings Boost Sentiment

123jump.com Staff
29 Jan, 2010
New York City

U.S. stocks gained after the economy expanded at the fastest pace in the fourth quarter in six years. Stocks also responded to better than expected earnings from Amazon.com and Chevron. SanDisk, Microsoft and Avery Dennison declined.

[R]11:30 AM New York – U.S. stocks gained after the economy expanded at the fastest pace in the fourth quarter in six years. Stocks also responded to better than expected earnings from Amazon.com and Chevron. SanDisk, Microsoft and Avery Dennison declined.[/R]

Stocks in New York traded cautiously higher after the Commerce Department reported better than estimated economic expansion in the fourth quarter and earnings from Amazon.com Inc and Chevron Corp were ahead of expectations.

The U.S. economy expanded at a faster pace in the last quarter of 2009 as businesses slow inventory liquidation but consumer remained on the sidelines. Gross domestic product increased for the second quarter in a row but for the year shrank at 2.4%, the biggest decline since the drop of 10.9% in 1946.

Commodities market traded mixed in the morning trading. Futures of crude oil increased 67 cents to $74.31 and natural gas added 10 cents to $5.24 per mBtu. Gold declined $5.10 to $1,079.70 ounce.

Yields on 10-year U.S. Treasury bonds traded at 3.65% and 30-year bonds at 4.55%.

The dollar edged higher after the release of the fourth quarter GDP data. One euro fetched $1.389 and the dollar traded at 90.34 yen.

Earnings Review

Amazon.com, Inc, the online retailer said fourth quarter sales rose 42% to $9.52 billion from $6.70 billion a year ago. Net income in the quarter rose 71% to $384 million or 85 cents per diluted share compared to net income of $225 million or 52 cents per share a year ago.

Net sales for the fiscal year 2009 rose 27.6% to $24.5 billion from $19.2 billion a year ago. Net income for the year rose 40% to $902 million or $2.04 per diluted share compared to net income of $645 million or $1.49 per share a year ago.

Chevron Corporation, the oil company reported fourth quarter revenues rose 10.4% to $47.6 billion from $43.1 billion a year ago. Net income in the quarter fell 37% to $3.07 billion or $1.53 per diluted share compared to net income of $4.90 billion or $2.44 per share a year ago.

Total revenues for the fiscal year 2009 fell 37% to $167.4 billion from $265.0 billion a year ago. Net income for the year fell 56% to $10.5 billion or $5.24 per diluted share compared to net income of $23.9 billion or $11.67 per share a year ago.

Mattel, Inc, the toy company reported fourth quarter sales rose 1% to $1.96 billion from $1.94 billion a year ago. Net income in the quarter rose 86% to $328.4 million or 89 cents per diluted share compared to net income of $176.4 million or 49 cents per share a year ago.

Fortune Brands, Inc, the consumer brands company reported fourth quarter sales rose 0.6% to $1.80 billion from $1.79 billion a year ago. Net income in the quarter was $11.5 million or 8 cents per diluted share compared to net loss of $281.3 million or $1.88 per share a year ago.

Honeywell International Inc, the diversified manufacturer reported fourth quarter sales fell 7% to $8.07 billion from $8.71 billion a year ago. Net income in the quarter fell 1% to $698 million or 91 cents per diluted share compared to net income of $707 million or 97 cents per share a year ago.