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Is there a light at the end of the tunnel? After weeks of low stock prices, a report showed that U.S. consumer confidence was on the rise, and today’s market showed evidence of that truth as the Dow closed at its top day for 2005. The Dow ended at 10,461.56 up 92.95 points; additionally, the NASDAQ rose 11.25 points to close at 2,019.95 while the S & P closed at 1,168.41 after rising 4.66 points.

Johnson & Johnson and DuPont Co. both reported positive earnings reports today that proceeded to help boost the market. Last month Johnson & Johnson decided to purchase Guidant Corp. , and today they rose $2.23 after their earnings reports. The company that produces Tylenol and a variety of other products announced that fourth quarter profits were approximately 67 cents per share beating analysts expectations of 64 cents. DuPont , the second largest maker of chemicals in the U.S. , said that profit was around 37 cents per share, exceeding the 33 cent estimate by analysts. The company announced that it expects 2005 profit to reach $2.65 to $2.85 per share; analysts have forecast an average of $2.74.

Texas Instruments reported that fourth quarter earnings reached a nine year high with increased sales for their handsets around Christmas. The company surpassed its fourth quarter forecast of $3.02 billion to $3.14 billion in December. Chief Executive Officer Rich Templeton has convinced television manufacturers including Samsung Electronics Co. to use his digital light processing (DLP) chips in their products. Additionally, he won a bid with Samsung to add his chips to their mobile phone handsets; given the expanding market, Texas Instruments seems to be on the way up.

In more discouraging news today, the Bush administration announced their expectations that the federal budget deficit would expand to $427 billion this year. Part of the reason for the $100 billion increase in the anticipated spending since six months ago is due to increased military spending for troops in Afghanistan and Iraq ; the administration requested an $80 billion increase this year.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter