Market Levels
• US: Dow: 13134.90 (-0.27%), S&P 500: 1414.28 (-0.36%), NASDAQ: 2971.33 (-0.70%)
• Europe: CAC: 3643.28 (0.00%), DAX: 7596.47 (0.19%), FTSE: 5921.76 (-0.13%)
• Asia-Pacific: Australia: 4583.10 (0.01%), China: 2150.63 (4.15%), Hong Kong: 22605.98 (0.71%), India: 5879.60 (0.48%), Japan: 9737.56 (-0.05%).
• Metals: Gold: 1697.00 (0.01%), Silver: 32.30 (-0.17%), Copper: 3.68 (0.63%)
• Energy: Crude Oil: 86.73 (0.98%), Natural Gas: 3.31 (-1.11%)
• Commodities: Corn: 7.30 (1.46%), Soya Bean: 14.91 (1.29%), Wheat: 8.14 (0.68%)
• Currency: Euro (€) / US Dollar ($) (EURUSD): 1.3156 (-0.61%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6159 (-0.29%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 83.4850 (-0.16%)
• 10 year US Treasury: 1.701% (0.003)
Market and Economy News Update
U.S. markets end lower: U.S. markets closed near the lows of the session on Friday as concerns about the budget talk concerns overshadowed a rise in industrial production. The Dow Jones Industrial Average (INDEXDJX:.DJI) and the S&P 500 (INDEXSP:.INX) fell about 3 percent, while the NASDAQComposite (INDEXNASDAQ:.IXIC) shed 0.7 percent, dragged down by shares of Apple Inc. (NASDAQ:AAPL). For the week, the Dow edged 0.2 percent lower, the S&P 500 gave up 0.3 percent and the NASDAQ ended 0.2 percent lower.
Oil prices rise: Oil prices gained on Friday on expectations for improved demand in second biggest consumer, China, after data showed manufacturing grew in the country. The continued uncertainty and political turmoil in the Middle East also supported oil prices. Crude oil for January delivery added 1 percent, to settle at $86.73 a barrel on the New York Mercantile Exchange. Brent oil for January settlement jumped 1.1 percent to $109.15 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
Apple Inc. (NASDAQ:AAPL)
Apple Inc. (NASDAQ:AAPL) fell for the third straight session after two analysts cut shipment forecasts for its products. Jefferies analyst Peter Misek lowered his iPhone shipment estimates for the January-March quarter. While UBS AG analyst Steve Milunovich cut his iPhone sales expectations by 5 million for each of the next three quarters through September 2013. Milunovich also slashed his price target on Apple Inc. (NASDAQ:APPL) shares to $700 from $780. Apple Inc. (NASDAQ:AAPL) shares have lost a quarter of their value since they hit a life-time high of $705.07 in September, as it faces stiff competition from phones using Google Inc’s Android operating system. Apple Inc. (NASDAQ:AAPL) launched the iPhone 5 in China on Friday, at a time when its market share in that country is declining. The company was hoping that the new phone would help stem the slide. But if analysts are to be believed, the latest version of the Apple Inc. (NASDAQ:AAPL) smart phone may not sell as well as its predecessor, the iPhone 4S. Apple Inc. (NASDAQ:AAPL) tumbled 3.8 percent to $509.50.
General Electric Company (NYSE:GE)
General Electric Company (NYSE:GE) raised its dividend by 12 percent, and said it will buy back an additional $10 billion of shares. General Electric Company (NYSE:GE) raised its quarterly dividend to 19 cents per share from 17 cents per share, the fifth hike in payout since 2010. “Returning cash to our shareholders remains a top priority,” Chief Executive Officer Jeff Immelt said in a statement. The board’s decision to authorize the additional buyback is also in line with General Electric Company (NYSE:GE)’s goal of repurchasing all the additional shares it issued in 2008 to raise cash in the aftermath of Lehman Brothers Holdings Inc.’s collapse. General Electric Company (NYSE:GE) shares were up 4 cents at $21.66 on the New York Stock Exchange.
Southwest Airlines Co. (NYSE:LUV)
Southwest Airlines Co. (NYSE:LUV) hit a new 52-week high in Friday trading after the airline company announced plans for additional fees next year to increase revenue by $1.1 billion. Southwest Airlines Co. (NYSE:LUV) told investors on Friday that it will raise fees on third bags and overweight baggage, and roll out new charges for premium boarding positions and no-shows on flights, as part of efforts to seek out fresh sources of revenue to cover rising costs for labor and jet fuel. The Dallas-based company is the only major U.S. airline that has not reorganized in bankruptcy. Separately, Southwest Airlines Co. (NYSE:LUV) said Superstorm Sandy cost about $15 to $20 million in operating profit. Shares of Southwest Airlines Co. (NYSE:LUV) were up 0.4 percent to $10.18 in Friday trading.
Best Buy Co., Inc. (NYSE:BBY)
Best Buy Co., Inc. (NYSE:BBY) closed sharply lower after the struggling consumer electronic retailer agreed to extend the deadline to the end of February for founder and former chairman Richard Schulze to make a bid for the company. Under the terms of the new deal, Schulze can deliver the proposal on or after February 1 through February 28, and the board would have 30 days to review and take a position on the potential offer. The prior deadline was December 16. In a statement issued today, Best Buy Co., Inc. (NYSE:BBY) said that it was in the best interest of shareholders to allow Schulze and his partners include results from the holiday season in their due diligence review. The company is scheduled to post its holiday sales numbers on January 11. Best Buy Co., Inc. (NYSE:BBY) last month posted a $10 million loss for its third quarter and forecast sharply lower cash flow for the full-year, results that proved to be worse than what the company had warned of in October. Shares of Best Buy Co., Inc. (NYSE:BBY) dropped 14.7 percent to $12.05.
Peabody Energy Corporation (NYSE:BTU)
Peabody Energy Corporation (NYSE:BTU) said capital expenditures in 2013 will be lower than in the current year, noting results in the first quarter will be hit by a drop in coal prices and higher costs. Peabody Energy Corporation (NYSE:BTU) said it expects capital expenditures to be 50 percent lower than the $1.0 billion to $1.1 billion targeted for 2012. Sales volumes for the year are expected to fall to between 180 million and 190 million tons, down from the company’s 2012 targets of 188 million to 192 million tons. Peabody Energy Corporation (NYSE:BTU) expects its first-quarter Australian unit costs to be up about 10 percent, while prices of metallurgical coal are expected to be lower than fourth-quarter levels. Peabody Energy Corporation (NYSE:BTU) shares rose 6 cents, or 0.2 percent, to $27.68.
Illinois Tool Works Inc. (NYSE:ITW)
Illinois Tool Works Inc. (NYSE:ITW) said its organic revenue next year will likely increase between 1 percent and 3 percent above 2012 levels, as revenue from Europe and Asia remains weak. Organic revenue is expected to increase 2 percent this year from 2011, below the company’s prior forecast of growth between 3 percent and 5 percent. Illinois Tool Works Inc. (NYSE:ITW) did not provide a profit outlook for full-year 2013. Shares of the Glenview-based Illinois Tool Works Inc. (NYSE:ITW) were down 3 percent at $59.82 a share.
Charles Schwab Corp (NYSE:SCHW)
Charles Schwab Corp (NYSE:SCHW) said daily trading volume fell 2 percent in November from October and was flat from a year-ago, reflecting investors’ concerns about the economic uncertainty in the U.S. and abroad. Charles Schwab Corp (NYSE:SCHW) said its daily average client trades totaled 431,800 in November, compared to 439,700 in October, and flat from a year earlier. Total client assets stood at $1.92 trillion at the end of November, up 1 percent from October, and 15 percent from a year ago. Charles Schwab Corp (NYSE:SCHW) attracted $16.2 billion in new assets in November, while core net new assets of $11.7 billion were the highest for a single month in almost four years. Shares of Charles Schwab Corp (NYSE:SCHW) closed Friday at $13.70.
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