For the week of Monday, February 6, 2012 through Friday, February 10, 2012:
- Standard & Poor’s 500 Index: -0.17%
- Dow Jones Industrial Average: -0.47%
- NASDAQ Composite: -0.06%
The market had a strong rally this week after strong employment data was released last Friday. Nonfarm payrolls leapt 243,000, almost 100,000 more than analysts expected. The unemployment rate also ticked down to 8.3%. This is good news for the economy, since roughly 70% of our gross domestic product is based on consumer spending. Jobless claims also continued their slow fall, with the four-week moving average falling to the lowest level since April 2008.
However, stocks were dragged down on Friday in reaction to the riots in Greece that were a result of recent austerity measures. A downgrade of Italian banks and poor economic readings for the United States added to the loss, which was the worst one-day loss this year.
Economic Data:
- Employment Data
- Data released for the month of January showed nonfarm payroll employment rose by 243,000, far surpassing analyst expectations of 150,000.
- The unemployment rate edged down to 8.3% from 8.5%.
- We would not be surprised if the unemployment rate ticks up as previously discouraged workers re-enter the workforce and start searching for jobs again.
- Jobless Claims
- Initial claims for the week fell to 358,000 from 373,000, which was more than expected.
- Claims from two weeks ago were revised higher to 373,000 from 367,000.
- Weekly jobless claims have remained below the psychologically important 400,000 level.
- The four-week moving average fell to 366,250, the lowest since April of 2008.
Earnings
- The Walt Disney Company, (NYSE: DIS)
- Disney posted decent results for the fourth quarter thanks to the Media Networks unit and strong sales at the theme parks.
- Net income rose to $1.46 billion, or $0.80 per share, from $1.30 billion, or $0.68 per share, last year.
- This increase beat analyst expectations of $0.71 per share.
- Revenue rose 1% from $10.72 billion to $10.78 billion, slightly less than the $11.20 billion expectation.
- Revenue for the Media Networks unit, which includes ESPN and the Disney Channel, rose to $4.8 billion, an increase of 3%.
- Theme park sales rose 10% to $3.2 billion.
- The Coca-Cola Company (NYSE: KO)
- Restructuring charges brought Coca-Cola’s net income down 71% for the quarter.
- However, adjusted results beat expectations.
- The beverage giant earned $1.65 billion, or $0.72 per share, far less than last year’s $5.77 billion, or $2.46 per share.
- After restructuring charges, earnings were $0.79 per share.
- Revenue rose to $11.04 billion, a 5% jump that was aided by higher prices and strong overseas sales.
- Restructuring charges brought Coca-Cola’s net income down 71% for the quarter.
- PepsiCo, Inc (NYSE: PEP)
- The Coca-Cola rival beat expectations for the quarter after accounting for restructuring charges.
- Net income was $1.42 billion, or $0.89 per share, over last year’s $1.37 billion, or $0.85 per share.
- After restructuring costs and other charges, net income was $1.15 per share, higher than the $1.13 expected.
- Revenue rose to $20.16 billion, an increase of 11% and higher than the $19.89 billion forecast.
- For the year, net income rose 2% to $6.46 billion, or $4.03 per, share over $6.33 billion, or $3.91 per share, last year.
- Revenue increased to $66.5 billion from $57.84 billion, a 15% jump.
- The Coca-Cola rival beat expectations for the quarter after accounting for restructuring charges.
- Cisco Systems, Inc (NASDAQ: CSCO)
- The technology designer and manufacturer grew net income by 44% as the company tries to recover from a bad year.
- Net income was $2.2 billion, or 0.40 per share, over last year’s $1.5 billion, or $0.27 per share.
- After amortization and stock compensation costs, the company earned $0.47 per share beating expectations of $0.43.
- Revenue rose 11% to $11.5 billion from $10.4 billion last year.
- CSCO is raising its dividend to $0.08 per share in April.
Interest Rates
- The two-year Treasury increased two basis points to 0.25%, remaining stuck in a range between 0.15% and 0.3%.
- The five-year Treasury rose seven basis points to 0.84%, climbing off the Jan 31st all-time low of 0.7%
- The 10-year Treasury leapt 11 basis points to 2.04%, remaining close to the 2.0% mark.
- The 30-year Treasury yield rose five basis points to 3.17%, the most it has risen since October.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
