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U.S. Stocks Little Changed as Investors Await Earnings

*from www.bloomberg.com, April 8, 2013 (To view original article click here.)

Take Away #1: U.S stocks were little changed as investors awaited Alcoa Inc.’s financial release to mark the beginning of the earnings season.

Key Facts and Figures:

  • The S&P 500 fell 0.1% to 1,551.85 at 1 p.m. in New York.
  • The Dow Jones Industrial Average declined 41.38 points, or 0.3%, to 14,523.87.
  • Trading in the S&P 5000 was 20% below the 30-day average during this time of day.
  • “We are just pausing before earnings season,” said Paul Zemsky of ING Investment Management.
  • The S&P 500 fell 1% last week as U.S. payrolls had the smallest gain in nine months in March while reports showed manufacturing and services industries expanded less than forecast.

Take Away #2: JPMorgan, Wells Fargo & Co. and Bed Bath & Beyond Inc. are among nine S&P 500 companies scheduled to report earnings this week.

Key Facts and Figures:

  • Analysts project profits at S&P 500 companies fell 1.8% in the latest quarter, the first year-over-year drop since 2009.
  • Analysts had predicted a 1.2% increase when surveyed in January.

Take Away #3: Seven of the 10 S&P 500 industry groups fell today, and Alcoa will report its quarterly results today to kick off earnings season.

Key Facts and Figures:

  • Phone companies retreated the most, losing 0.7%.
  • Consumer stocks climbed more than 0.3%.
  • Alcoa, the first Dow member to publish results each quarter, added 0.1% to $8.25.
  • Alcoa will report an 8-cent a share profit after the close of regular trading, according to the average of 18 analysts’ estimates.
  • That would be 2-cents less than the earnings it posted in the year-earlier quarter.
  • Johnson & Johnson fell 1.6% to $80.72, after JPMorgan reduced the stock’s rating to neutral from overweight.
  • JPMorgan said Johnson & Johnson may cut its earnings forecast for 2013 due a devaluation of the Venezuelan bolivar.
  • Software maker, CA Inc., slipped 2.1% to $24.08.
  • Mizuho Securities USA Inc. analyst Abhey Lamba cut the stock’s rating to neutral from buy.
  • BioCryst surged 16% to $1.98, adding to a 29% gain on April 5 as China’s Food and Drug Administration said it expedited the approval of Permavir.
  • Authorities reported three more infections of the deadly H7N9 virus that has killed six people in the country since March.
  • Luftkin soared 38% to $88, the highest since July 2011.
  • GE said it will acquire Lufkin for about $3.3 billion or $88.50 a share.
  • GE lost 0.3% to $22.87.

Take Away #4: Wagers that U.S. stock volatility will increase have reached a three-year high on concern American companies are getting ready to report the first slump in profit since 2009.

Key Facts and Figures:

  • There were 6.54 million calls on the VIX and 2.34 million puts on April 4.
  • The ratio jumped to 2.93-to-1 last month, the highest since March 2010.
  • The VIX, tracking S&P 500 option prices, has climbed 22% from its six-year low in March and lost 1% to 13.78 today.

Take Away #5: “Weaker data and earnings would encourage higher volatility after an unchallenged rally throughout the first quarter,” said Andrew Greeley of Acorn Derivatives Management Corp.

Key Facts and Figures:

  • Even bulls are taking steps to protect profits after gains in U.S> stocks added $10 trillion to equity values.
  • Investors managing more than $5 trillion say they’re looking for ways to limit losses after the S&P 500 reached a record.
  • That got harder in the first quarter, when rallies in drugmakers and utilities pushed valuations for so-called defensive industries to the highest since 2008.
  • “You have an increased risk of correction now,” said Russ Koesterich of BlackRock Inc.
  • “The parts of the market that have done the best, the defensives, have gotten very expensive,” said Koesterich. “This is a very different rally than what people are used to.”

*To view original article from www.bloomberg.com click here.

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