DJIA Week in Review: Microsoft and Intel at CES, Alcoa and JP Morgan Earnings
The Dow Jones Industrial Average (NYSEARCA:DIA) was down 0.39% on Friday to close at 12,422. Here is some of the top news from index components this week.
Caterpillar Inc (NYSE:CAT) will expand its headquarters of research and development in China to facilitate the growth of Asia-Pacific market, company and local government officials said. “China is the largest construction equipment market in the world, and Caterpillar continues to invest in China to help our Chinese customers succeed and to position Caterpillar for long-term leadership in China,” said Caterpillar VP Tana Utley.
United Technologies (NYSE:UTX) company Pratt & Whitney won a $194,097,296 long-lead production contract with the U.S. Department of Defense for F135 engines to power the F-35 Lightning II. The low rate initial production, or LRIP, contract is for long-lead materials for the sixth lot of F135 engines, and enables Pratt & Whitney to begin gathering long-lead items for production engines.
Shares of Alcoa Inc. (NYSE:AA) were up more than 3 percent early Tuesday morning following the company’s report of fourth quarter results late Monday. The loss from continuing operations was $34 million, or $0.03 per share, after costs of restructuring and other special items. The company reported fourth quarter revenue of $6 billion, a decline of 7 percent from the previous quarter’s $6.4 billion but a 6 percent increase from the $5.7 billion revenue of fourth quarter 2010.
Cisco Systems (NASDAQ:CSCO) is near a multi-month price high as technical factors are attracting traders. The company has been benefitting from interest in cloud computing and many accounts by telecom and cable companies that broadband usage is exploding. Cisco makes many components needed as the internet grows.
In his opening keynote address at the Consumer Electronics Show in Las Vegas, Microsoft (NASDAQ:MSFT) CEO Steve Ballmer said sales of the Kinect for the Xbox game console are over the18 million mark just a little over a year since its debut, reports Reuters. Ballmer implied that Microsoft sold in the neighborhood of 7 million Xbox and Kinect units during the holiday season, and said there are currently more than 66 million Xbox units in use and more than 40 million subscribers to Xbox Live.
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At the Consumer Electronics Show, Intel (NASDAQ:INTC), the world’s biggest chip maker, announced that its third generation of Core microprocessors will act as the brains of new ultra-thin devices. Ensuring the success of these “ultrabooks is of major interest to Intel as it wants its chips to be in them if the devices become the mainstream computers of the near future.
At the event, Hewlett-Packard Co (NYSE:HPQ) and Dell Inc. (NASDAQ:DELL) announced they are rolling out “ultrabook” laptops. HP has unveiled a laptop with a 14-inch screen priced at $1,400, and Dell is about to introduce its own version of the “ultrabook,” a concept being pushed by Intel Corp.
Bank of America (NYSE:BAC) slashed about 20% of its managing director staff across its Asian investment banking division. This is in part because Bank of America had to sell off a lot of its equity, but it’s also because of a bid to cut costs in a region that is no longer booming so much. New York’s financial regulator is looking into whether many of the country’s largest banks, including Bank of America, over-billed customers for force-place insurance.
General Electric’s (NYSE:GE) alternative energy division continues to suffer in a market defined by slower demand growth, Asian competition and drastically lower subsidies in a reeling Europe. Vestas has cut its guidance for 2011 and this does not bode well for GE’s wind turbine division.
Investing Insights: Dow 30 Stocks: 2012 Quarterly Earnings Preview.
JPMorgan Chase & Co. (NYSE:JPM) Q4 report showed a 23% drop in earnings. JPMorgan’s Q4 prompts analysts to predict shares will move sideways after popping higher to open the New Year. At the moment things aren’t dire at JPM, but given the 11% run-up in the stock YTD, no-term relief in the sight for issues in Europe, and the big mortgage overhang, JPM and other financials may take a breather in the near term. Quote of the day from Jamie Dimon: There’s no one in charge of the global financial system…It’s crazy.”
Bank of America Corporation (NYSE:BAC): Shares of Bank of America Corporation fell hard to start the trading day as a report that it may pull out of some U.S. states and JPM’s Q4 report weighed on investors. BAC has reportedly told U.S. regulators that it’s willing to withdraw for some areas of the country if its financial problems worsen.
An American Express Company (NYSE:AXP) poll found 56% claiming they’ll spend more or the same in 2012. In what could be a positive for the travel/hospitality industry, 61% of respondents said that they plan to increase their travel spending. However, only 35% claim to be optimistic about their finances in the upcoming year.
International Business Machines Corporation (NYSE:IBM): The weak FQ4 guidance attached to Infosys’ FQ3 report is affecting the shares of rival Wipro, and even those of IT services kingpin IBM. It should be noted that Buffett’s investment in IBM last year was the largest investment he had ever made, and it was the first significant technology investment that he ever made.
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