Weak Commodities Drag U.S. Indexes

123jump.com Staff
22 Feb, 2010
New York City

U.S. stocks traded sideways and commodities traded lower. President proposes changes to healthcare plan before a bipartisan meeting on Feb 25. Schlumberger agrees to acquire Smith International for $11 billion.

[R]10:40 AM New York – U.S. stocks traded sideways and commodities traded lower. President proposes changes to healthcare plan before a bipartisan meeting on Feb 25. Schlumberger agrees to acquire Smith International for $11 billion.[/R]

Stocks in early trading declined on a weakness in commodities and banks.

The S&P 500 index edged 0.02 lower to 1,109.15 but the Nasdaq increased 0.44% to 2,244.31. The dollar edged higher to $1.3602 euro and decreased against the yen to 91.19.

Schlumberger International agreed to acquire Smith International for $11 billion according to a joint statement released by both companies.

Commodities traded mixed in the early trading. Crude oil edged a fraction to $79.81 and gold declined $2.90 to $1,119.20 and natural gas decreased 14 cents to $4.90 per mBtu.

Yields on the 10-year Treasuries traded at 3.79% and 30-year bonds at 4.73%.

President Obama proposed changes to overhaul the nation’s healthcare system. According to the summary, President plans to impose 2.9% tax on unearned income including dividend, interest and royalties for individuals earning more than $200,000 and families earnings more than $250,000.

The plan also gives additional powers to the government to rein the unreasonable increases in medical insurance premiums and insurers will not be able to reject new members with preexisting conditions.

Stock Movers

Energy Solutions Inc ((ES)) increased nearly 5% after it estimated current fiscal year earnings to be as low as 62 cents a share.

Lowe’s Cos. ((LOW)) declined more than 1% after it estimated fiscal first quarter adjusted earnings per share between 27 cents and 29 cents.

Schlumberger Ltd ((SLB)) declined 3% after the company agreed to acquire Smith International for $11 billion.

Earnings Review

Cabot Oil & Gas Corporation, an oil and gas company reported fourth quarter revenues rose 0.4% to $233.5 million from $232.5 million a year ago. Net income in the quarter fell 16.7% to $36.4 million or 35 cents per diluted share compared to net income of $43.7 million or 42 cents per share a year ago.

Revenues for the fiscal year 2009 fell 7% to $879.3 million from $945.8 million a year ago. Net income for the year fell 30% to $148.3 million or $1.43 per diluted share compared to net income of $211.3 million or $2.10 per share a year ago.

Constellation Energy Group Inc reported fourth quarter revenues fell 30.6% to $3.4 billion from $4.9 billion a year ago. Net income in the quarter was $4.4 billion or $21.96 per diluted share compared to net loss of $1.4 billion or $7.75 per share a year ago.

Revenues for the fiscal year 2009 fell 21% to $15.6 billion from $19.7 billion a year ago. Net income for the year was $4.4 billion or $22.19 per diluted share compared to net loss of $1.3 billion or $7.34 per share a year ago.