January 20, 2014 – January 24, 2014
Markets were closed Monday due to a national holiday, and the remaining days of trading were a mixed bag.
The S&P 500, having reached record highs last week, just couldn’t keep the momentum going. Companies are reporting their earnings, and although they haven’t been bad, they haven’t been great either. A familiar pattern continues of lackluster or negative revenue growth, yet earnings per share rise due to cost cutting or share buybacks.
On Friday, emerging market currencies fell against the US dollar, creating more worry and prompting major indexes to drop. On Thursday, the flash Purchasing Managers’ Index for China fell to 49.6 in January, down from 50.5 in December. Readings below 50 indicate contraction in the manufacturing sector, and this is the first reading below 50 for China in six months.
Jobless claims for the week ending January 18 came in at 326,000, only 1,000 more than the previous week. Existing home sales increased 1% for December to 4.87 million units.
Now let’s take a look at some stocks.
IBM (NYSE: IBM) stock slumped upon release of their fourth quarter earnings after missing analysts’ projections. IBM reported that revenue dropped 5% from $29.3 billion to $27.7 billion. The company stated that they fell short of forecasts due to weakness in IBM’s computer hardware division.
Advanced Micro Devices (NYSE: AMD) plunged over 11 points during Wednesday’s trading after the company announced their fourth quarter earnings Tuesday night, after market close. AMD reported $1.59 billion in revenue as well as $89 million in net income or $0.12 a share, a significant discrepancy compared to the year-ago financials of $473 million in losses or negative $0.63 per share. The pressure on AMD stock came about when the company announced that they expect revenue to decrease anywhere between 13% – 19% during their current quarter.
Motorola Solutions, Inc. (NYSE: MSI) dipped nearly 4% at the start of Wednesday’s trading after the company released their fourth quarter financials. MSI reported an increase in their year-over-year financials; profits rose 11% from $1.18 to $1.31 per share while MSI’s total sales rose 3% to $2.5 billion.
Netflix, Inc. (NASDAQ: NFLX) stock soared as the market opened on Thursday morning, gaining over 17% in value, after the company released their impressive fourth quarter earnings report late Wednesday night. Netflix reported that fourth quarter profits increased to $48 million or $0.79 per share and that fourth quarter new subscribers for the video steaming company increased by a staggering 2.33 million users.
Nokia Corporation (NYSE: NOK) shares slid during trading Thursday when it was announced that sales in their handset division have continued declining during the company’s fourth quarter. Nokia will only have to endure the losses from their handset division until Microsoft takes over the entire department, which they acquired through a deal with Nokia last year.