Traders-Blog.com

Today was a mixed day for stocks with a few gains and some losses. The Dow fell 4.88 points to close at 10,791.13. However, both the Nasdaq and the S&P rose today. The Nasdaq rose 6.25 points closing at 2,082.91, while the S&P closed at 1,206.14 after rising 0.84 points.

The Dow fell today primarily because of regulatory inquiries at American International Group (AIG). AIG received subpoenas today from the office of New York State Attorney General Eliot Spitzer and the Securities and Exchange Commission. Their earnings conference call was on February 9th, and the subpoenas came after that time. Although people are downplaying the effects of this news, investors did cause the stock to drop 2.2% today ending at $71.49.

In yet another major deal, Verizon announced that they would be purchasing MCI. In the past three months, there have been two other major phone deals, and Verizon and MCI are just joining into the trend. Verizon will be paying $6.7 million in order to purchase MCI long-distance and keep pace with its rival SBC, who has recently acquired their own long-distance service in former parent company AT&T.

United States Treasury Secretary John Snow will be visiting with financial industry leaders in New York on Thursday. Snow is coming to try to sell Bush’s Social Security plan to the leaders of Wall Street. As people are demanding information concerning the specific state of Social Security and begging for assurances that the plan will work, Snow is coming on the scene to get major leaders behind the President’s plan. The new Social Security plan could completely change the world of investments as more people become actively involved in investing their money for the future.

Agilent Technologies stocks fell today. The company’s first quarter results were good with earnings moving from $100 million to $103 million over the past year, but these results were not good enough to make up for their unexpected second quarter outlook. The company estimated that sales would stay about the same this quarter which will be around $70 million less than normal due to the sale of the company’s camera modules operation division.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

More exclusive trading recommendations from world record-holder Dan Zanger and The Zanger Report - free 3-week trial. (No credit card needed.)

Click charts to view full size.

Attention Futures Traders: Free Investment Guide - just click here

• Access Professional Money Managers

Free Investment Guide - click here while supplies last

There is a substantial risk of loss in trading futures and options. Futures and options are not suitable for all investors.

After three weeks of gains, the Dow closed high once again on Friday, offering investors a high point to go home on for the weekend. The Dow posted a gain of 46.40 points Friday to close at 10,796.01. The Nasdaq gained 23.56 points closing at 2,076.66, while the S&P rose only 8.29 points to end the day at 1,205.30.

Big news for Apple Computer today. The Board announced a two for one stock split. The split is payable to shareholders as of February 28. The maker of the very popular IPod digital music player and many popular computers said the shares would increase from 900 million to 1.8 billion. The stock hit a 52 week high Wednesday when it closed at $81.99, but it fell 38 cents to close at $78.36 Thursday.

Citigroup said that the probe into bond trading in Europe is specifically for individuals; the company will not be tied to the bond trading initiative. The company confirmed that traders involved in the European government bond scandal of last year have been put on leaves of absence until further notice. The company plans to make their offerings more streamlined and easier to understand in the coming months. Shares rose 42 cents closing at $49.40 at the end of the day.

Despite fairly positive earnings reports yesterday, Dell lost 4 percent today. Investors were disappointed in yesterday’s reports and were even more discouraged by the company’s expectations for fourth quarter earnings. The stock fell $1.58 to close at $39.99 on a more than three times the daily average volume. Analysts are in disagreement over what we can expect from Dell in the future. Considering the popularity and decent prices of their products, the company has a good chance of making a comeback over the next year.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

Blue chips headed in the right direction today as they skyrocketed based on good reports and federal reform and led the way for a rise in the market. The Dow rose 85.50 points to close at 10,749.61, while the S&P closed at 1,197.01 after rising 5.02 points. The Nasdaq gained only 0.55 points, closing at 2,053.10.

Sara Lee Corp. announced today that the company would be restructuring their divisions. They said they would be spinning off their $4.5 billion apparel business, while they would sell three other companies. Currently they are planning to sell the $1.1 billion European packaged meats division, the $450 million direct retail section, and their U.S. $300 million retail coffee business. Sara Lee also announced a new CEO, Brenda Barnes, who will take over in October. Barnes has been the chief operating officer since July, and today’s announcement sent the stock up 95 cents to close at $23.92.

Dell Inc. reported positive fourth quarter earnings today. The net profit for the quarter was $667 million, 26 cents per share, on $13.5 billion revenue. However, during the same time last year, Dell’s net profit was $749 million, or 29 cents a share. The difference this year was made by a $280 million tax charge that Dell had to pay; otherwise, they would have earned 37 cents per share and beat analyst estimates.

Verizon Communications has reportedly made an informal inquiry to purchase MCI Inc. The inquiry comes just a week after speculations were made that Qwest Communications might be doing something along the same lines. MCI has been looking to sell since it came out of bankruptcy protection last year, but it has become a much hotter commodity since SBC Communications announced its intentions to purchase its former parent company, AT&T, last week. After investors heard the news, MCI closed at $20.72 after rising 14 cents, but the stock was still worth at least $2 more than it was worth two weeks ago. Verizon rose 7 cents to $36.15, while Qwest lost 14 cents to $4.14.

A 4.7% spike occurred today for AIG after the Senate approved a class-action reform legislation. The legislation allows many of these suits to move from the state to federal courts which will benefit property and casualty insurers. Additionally, the Commerce Department announced that the U.S. deficit shrunk by 4.9% to $56.4 billion in December.

In other good news, the U.S. jobless claim fell to a four-year low during the first week of February. The number fell by 13,000 to 303,000, an seasonally adjusted number offered by the Labor Department.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

Stocks were down again today after Cisco Systems’ report, good but unexciting, caused some investors to reconsider their investments although Hewlett Packard’s stocks took an upswing after their chief executive stepped down. The Dow ended at 10,64.11 after falling 60.52 points after today’s announcements. Additionally, the Nasdaq fell 34.13 points to close at 2,052.55, while the S&P lost 10.31 points to close at 1,191.99.

Hewlett Packard had the biggest news of the day as Chairwoman and CEO Carly Fiorina was ousted by directors and investors. All parties involved had determined that Fiorina’s management style was standing in the way of company growth. Investors seemed to think that the move was good after the stock prices rose $1.39 to close at $21.53. Despite Fiorina’s reputation as the most powerful woman in business and her previous success at HP, Fiorina was still let go and replaced by Robert Wayman, the Chief Financial Officer, and Patricia Dunn who are serving as CEO and chairwoman during the interim.

American International Group reported fourth quarter profits high above analyst expectations. The property and life and casualty sections turned in strong results for the company. AIG had a net income of $3.02 billion, a rise of 11.5% from the same time last year, despite the past year of major natural disasters and regulatory issues.

Bank of America settled with the SEC today in an enforcement action involving improper rapid trading of mutual fund shares. The action was filed against Banc of America Capital Management , BACAP Distributors, and Banc of America Securities. The settlement was for $375 million.

The dollar fell from the three-month high it has been experiencing as U.S. Treasury Secretary John Snow made comments that decreased optimism for Bush’s plan to cut the deficit in half. Snow announced that lawmakers should create tax cuts in order to keep the economy vibrant. His comments seemed to cause concern about whether the administration’s plan to cut the deficit in half could be attained while creating even larger tax cuts. Analysts hope that eventually the dollar will overcome these types of announcements and make a comeback.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

Despite hard hits on some individual companies, the market took an upturn today with the Dow rising 8.87 points close at 10,724.63. The Nasdaq closed at 2,086.68 after rising 4.65 points, while the S&P rose only 0.58 points closing at 1,202.30.

McAfee and Symantec took hits today as Microsoft announced that they would be acquiring Sybari Software Inc. in order to expand and improve their security software services. The strategic move threatens McAfee and Symantec because of Sybari’s alliances to such important vendors as Computer Associates, IMlogic, Kaspersky Labs, NetIQ and Sophos, all of which are major rivals to McAfee and Symantec. Microsoft rose .09 cents to close at $26.25 this afternoon. On the other hand, McAfee lost 7.32 percent closing at $24.06, while Symantec fell 5.1 percent to close at $22.39. Although some type of move was expected, no one expected the move to come this soon or to be this threatening.

Cisco Systems announced that their second quarter net income had doubled to $1.4 billion from the same time last year when net income was $724 million. However, sales only rose 12.3 percent which was a little lower than analysts expectations. Cisco sold more networking switches to their customers while boosting their profits faster by closing down on company costs.

Liberty Corp. rose 6% today when the company announced that they would be giving $4 dividends to shareholders on April 4th. They are also extending their stock repurchase program to February 28th. Ebay also rose by 3% today when they announced that their acquisition of Rent.com would be a mostly cash transaction rather than a stock transaction as was announced in December. Additionally, Playtex Products shares rose 3% after saying that they would record charges of $17 to $19 million by consolidating their divisions and realigning sales.

Krispy Kreme announced that it would be laying off 25% of their employees in an effort to save $7.4 million a year. The company will be cutting jobs from the corporate offices to their chain stores. The company has until March 25th to deliver their financial statements or face default; however, they are also saying that they will probably need additional credit at that time in order to fund operations.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

For the most part, the market held its own today, falling just a few points. The Dow Jones fell just 0.37 points closing at 10,715.76, while the S&P lost 1.31 points and closed at 1,201.72. With today’s biggest loss, the Nasdaq closed at 2,082.03 after falling 4.63 points.

PNC Financial’s plans to buy Riggs National have come to a screeching halt due to concerns about the price. However, Riggs has sued their former suitor for damages due to the ended deal. Riggs claimed they filed the lawsuit in order “to hold PNC responsible for its wrongdoing and for the resulting damages it has caused, or, alternatively, to require PNC to uphold its end of the agreement.” Their shares fell 6.1% this morning, while PNC shares rose 1.1%. Riggs still plans to find a larger investment firm with whom to partner.

Pfizer spent today defending their prize drug, the pain reliever Celebrex. Shares rose today as the company announced that their internally conducted studies have shown that Celebrex does not cause cardiac problems. However, they admit that at least two of the studies did show that cardiovascular problems could occur when using Celebrex, but both studies were conducted with Alzheimer’s patients.

Clorox, the major household goods producer, announced today that their second quarter earnings rose tremendously. Clorox attributed their success to cost controls and an unexpected increase in sales. Home care, Glad trash bags, and Latin American sales topped their list of high selling products. Additionally, RealNetworks, the online digital music provider, experienced a surge in their stock prices today. Stocks rose 20% to close at $6.83 after an unusually heavy day. Most investors consider the low prices of their stocks as a great way to invest in the growing digital music business.

Bush put his promises in the State of the Union address into effect today as he sent Congress a bill to cut down on non-military, domestic spending. The 2006 fiscal plan is for $2.57 trillion with defense spending remaining the top priority with the budget rising 4.8 percent. According to Bush, “It is a budget that sets priorities. Our priorities are winning the war on terror, protecting our homeland, growing our economy. It’s a budget that focuses on results.” Bush’s pledge to cut the deficit in half by 2009 is possible with this budget. Despite good intentions, Bush will have a lot of difficulty getting the bill passed due to the hits on the budgets for programs assisting the needy.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

The market rallied today to allow investors to go home cheerful before the weekend and cement the past two weeks of gains. The Dow jumped 123.03 points to close at 10,716.13, while the Nasdaq rose 29.02 points closing gat 2,086.66. The S&P also closed at 1,203.03 after rising 13.14 points.

Today’s rise was partially due to the rise in Altria Group’s stocks after a favorable ruling today in favor of tobacco and cigarette manufacturers that helped to boost the Dow Jones Industrial to its highest levels in the past month. The Federal Appeals Court ruled that the government cannot go after $280 billion in past profits in the current racketeering case. Other tobacco stocks, such as Reynolds American and British American Tobacco, rose as well.

Additionally, the United States Labor Department announced that unemployment had fallen from 5.4 percent to 5.2 percent during January to reach a three year low, while nonfarm payrolls rose to 146,000 during the same time period; payrolls were expected to hit 189,000. Although there are both good and bad implications, investors chose to remain positive this afternoon.

Eighty thousand dollars per second? That’s the price of this year’s Super Bowl ads. Many times the companies who can deliver on their ads and create memorable ads can raise sales for the coming year. Keep your eyes open during the game to see who catches the crowds by storm. For prestige, Super Bowl ads simply can’t be beat.

Time Warner Inc. reported better than expected earnings during the fourth quarter. The company also announced that they were working with Comcast Communications to make a joint bid for Adelphia Communications, the bankrupt cable operator, could fetch a price nearing $17 billion. Now that the AOL settlement is in the past, Time Warner is in a position to make acquisitions.

Cisco Systems is expected to announce next week that their second quarter profits have surged over 20 percent. The top United States networking company is making more profit on every sale and has profited from the massive share buyback program. Sales are expected to have risen as much as 13 percent. Investors are looking forward to the announcement and the potential for a jump in stock prices.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

The market fell a bit today breaking the three session winning streak, but Wall Street was simply being cautious before the U.S. employment report due out early Friday morning. The Dow fell 3.69 points to close at 10,593.10, while the Nasdaq lost 17.42 points, closing at 2,057.64. The S&P also lost today ending at 1,189.89 after falling 3.30 points during the day.

Bush gave his state of the union address last night and made it clear that his top priority was to reform social security by giving the option of personal retirement accounts to younger Americans. According to his numbers, the Social Security system will go bankrupt completely by 2042 and will be extremely in debt by 2018. The possible changes may completely revamp how the market will work. Additionally, the U.S. employment report is due out early tomorrow, so the market stayed extremely cautious in case of bad news tomorrow.

Amazon reported bad news yesterday with the news of their disappointing earnings reports. Although fourth quarter sales rose more than expected and its net income rose fivefold since the same time last year, a large portion of Amazon’s quarterly profit came from a $244 million one-time tax benefit. Also, with the continuing promotions to keep customers, Amazon’s sales and income is likely to continue falling. The company’s shares fell 16% after the announcement.

Merck, the company whose most popular drug Vioxx was recalled, says that neither bankruptcy or a merger are in the works. Although the lawsuits have piled up against the company in the last few months, Merck’s CEO says that the company is strong and has no intention of declaring bankruptcy or forming a merger. Qwest Communications Inc. announced that they are in talks to purchase MCI just days after SBC Communications reported that their plans to buy their former parent company AT&T. The $6.3 billion deal caused shares of both companies to rise slightly today.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter