DJIA Week in Review: Bank of America and Hewlett Packard in the Spotlight

Bank of America Corporation (NYSE:BAC): Renewed concerns about Greece and Portugal are weighing down bank stocks, with Bank of America being particularly hard hit. Goldman Sachs’ decision to downgrade Bank of America from “Buy” to “Neutral” in light of economic concerns about Europe is only exacerbating the problem.

Chevron Corporation (NYSE:CVX) is down along with other energy stocks on the Dow. For what its worth, Jim Cramer has ranked Chevron a buy.

JP Morgan Chase & Co. (NYSE:JPM): The NYT reported that the five major banks in the U.S., including J.P. Morgan, have $80 billion in exposure to the GIIPS countries in Europe. That number goes down to $50 billion when CDS insurance policies are baked in. However, it remains an open question whether these insurance policies will mean anything in the event of a financial free-fall. Goldman Sachs moved the stock off its “conviction buy” list.

Alcoa (NYSE:AA) is in danger of losing its place as one of the 30 stocks on the DJIA, and investors are selling first and asking questions later.

3M (NYSE:MMM) lost whatever gains it acquired from last week’s earnings report in the general market sell off.

Exxon Mobil (NYSE:XOM): Edward Jones describes Exxon’s Q4 results as “mediocre”. Results for the “upstream unit”, which means oil and natural gas, were positive. But the “downstream unit”, which means chemicals and engine lubricants, is down.

Bank of America (NYSE:BAC) actually has been the best performing stock on the Dow in 2012. Banks are leading the stock rally, as positive economic data from Europe and China is helping. The fact that Bank of America will be invalid with the Facebook IPO is helping as well.

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Boeing (NYSE:BA) Air Astana is buying $1 billion of planes from Boeing. Motley Fool warned today that Boeing has a lot of intangible assets relative to its tangible book value, and that could spell trouble down the road.

Hewlett Packard (NYSE:HPQ): Technology stocks are leading the market up today. Hewlett Packard is not bearing any losses to the fact that Apple has surpassed Hewlett Packard as the leading seller of personal computers.

Merck (NYSE:MRK) results were a mixed picture today, and 4Q sales disappointed, but what hurts the stock today is the forecast for 2012. The company’s biggest issue is that its allergy medication Singulair will expire in August, and generic competition is likely to take a significant chunk of that product’s revenues.

Pfizer (NYSE:PFE): A Canadian court has denied an appeal by Pfizer to protect Apotex from being used as a generic drug. The stock is performing even worse than Merck.

Hewlett Packard (NYSE:HPQ): A fire safety issues is forcing the recall of models 1040 and 1050. Apparently, electrical issues could cause serious issues in almost a million of these products.

Bank of America (NYSE:BAC): The decision by a California district court to throw out a suit by Allstate (NYSE:ALL) paves the way for Bank of America to negotiate a better settlement to get beyond the issues with Countrywide Financial. The stock is also up on the positive jobs report.

Caterpillar (NYSE:CAT) is mirroring the positive jobs news today by expanding its facilities in Texas and North Carolina.

Walt Disney (NYSE:DIS): The jobs report means a better economy, and a better economy means more advertising revenue for media companies. With the purchase of UTV through a subsidiary, Disney will soon be the largest film producer in India.

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To contact the reporter on this story: Scott Gillette at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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