Equities Finish Higher Amid Strength in Financials
10-Jan-13 16:15 ET
[BRIEFING.COM] Equities began today's session on a positive note after China's trade surplus expanded to $31.6 billion due to strong export growth. The upbeat open was followed by a late-morning stumble, but the S&P 500 showed resilience and climbed to fresh highs. The benchmark index ended with a gain of 0.8%.
The financial sector paced the advance, and the SPDR Financial Select Sector ETF (XLF 17.15, +0.21) settled higher by 1.3%. The financial sector proxy ETF ended at a fresh 52-week high with most majors scheduled to announce their fourth quarter earnings next week. Tomorrow morning, Wells Fargo (WFC 35.40, +0.69) will be the first notable sector component to report. The Capital IQ consensus expects the bank to reveal earnings of $0.89 on $21.26 billion in revenue. An in-line report would indicate healthy year-over-year bottom line growth of nearly 22.0%. Looking at other majors, Bank of America (BAC 11.78, +0.35) gained 3.1% and Morgan Stanley (MS 20.34, +0.72) advanced 3.7%.
The technology sector spent the majority of the session in the red, but late-day strength in the shares of Apple (AAPL 523.51, +6.41) saw the stock rise by nearly $10, and pushed the tech sector higher. The notable bid followed comments from Apple's chief of marketing who said the company "is not interested" in making cheap, low-profit products. The largest tech company was in the news earlier this morning when Reuters reported Chief Executive Officer Tim Cook met with the chairman of China Mobile (CHL 58.75, +1.45) to talk about "matters of cooperation." China Mobile, which has over 700 million subscribers, does not currently offer Apple products on its network.
Among names reacting to analyst comments, Microsoft (MSFT 26.46, -0.24) shed 0.9% after Morgan Stanley downgraded the stock to ‘Equal-Weight' from ‘Overweight.'
Teen retailers lagged the broader market after Aeropostale (ARO 13.24, -0.13) issued downside earnings guidance due to disappointing holiday sales. Aeropostale shed 0.9% and peer American Eagle Outfitters (AEO 19.94, -0.69) settled lower by 3.3%.
Elsewhere, Tiffany (TIF 60.40, -2.86) slumped 4.5% after the jewelry retailer said it expects its fourth quarter earnings to be near the low end of its prior guidance range. Peers Blue Nile (NILE 36.58, -0.57) and Coach (COH 57.49, -0.47) both lost near 1.0%.
The latest weekly initial jobless claims count totaled 371,000, which was worse than the 364,000 that had been expected by the Briefing.com consensus. The tally was above the revised prior week count of 367,000. As for continuing claims, they fell to 3.109 million from 3.236 million.
In tomorrow's economic data, November trade balance, export prices ex-agriculture, and import prices ex-oil will all be reported at 8:30 ET. Lastly, the U.S. Treasury will release its December budget at 14:00 ET.