Bob Pisani is off; this post was written by CNBC reporter Brian A. Shactman.
Following its late-day recovery yesterday, stocks will attempt to keep the momentum going today. The Dow (up 2.5 percent) and S&P (up 2.7 percent) seek to hang on to their best monthly gains since November, with the Dow now rising in 7 of the past 8 months.
The huge storm in the Northeastern part of the U.S. means thousands won't be making it to work Friday.
Perhaps, that's why trading seems a little quiet. Overall trading volumes have been noticeably lighter in the second half month following the Presidents’ Day holiday and the numerous winter storms hitting parts of the Midwest and much of the East Coast.
Q4 GDP was revised upward from 5.7 percent to 5.9 percent. However, futures did not move measurably as it was relatively in-line with expectations.
1) The biggest story is AIG . It swung to a loss after two straight quarters of profits. While the loss significantly narrowed from the year-ago quarter, its insurance business remains weak.
The company cautions that worst-case scenarios aren't off the table and that more government funding might be needed if certain risks emerge. If those needs arise and if it doesn’t get additional support, it warns in its 10-K filing that “there could exist substantial doubt about AIG's ability to continue as a going concern.”
2) There was a private equity deal as well. CKE Restaurants soars 26 percent after receiving a bid by private equity firm Thomas H. Lee Partners for $619 million, plus the assumption of $309 million in debt. Shareholders will get $11.05 per share, a 24 percent premium from yesterday’s close.
However, the fast food company will have 6 weeks to “actively solicit superior proposals.”
3) Fluor falls 5 percent after earnings and guidance disappointed. Q4 results missed analyst expectations ($0.82 vs. $0.88 consensus) while sales fell 10 percent.
The engineering firm reduced its 2010 earnings outlook, cautioning that a smaller number new orders and delays of current projects will put pressure on results.
4) Gap rises 3 percent after Q4 earnings topped estimates by a penny as margins and sales rose. Comps edged 2 percent higher, thanks in large part to strength at its Old Navy stores (up 7 percent), which offset small declines at Gap stores (down 1 percent) and Banana Republic (down 2 percent).
2010 guidance looks good too, coming in above Street estimates ($1.70 -$1.75 vs. $1.69 consensus).
5) On the dividend front, two companies increased dividends, while a big bank said it was NOT going to follow suit.
Gap pushed its dividend to $0.10 a share, a 17-percent increase. BlackRock went from $0.78 to $1.00.
Meanwhile, JP Morgan Chase CEO Jamie Dimon said that the company will not boost the dividend until the broader economy is more stable.
6) According to reports in China, McDonald’s is cutting prices there, and even accepting coupons from competitors.
7) Barron's Weekday Trader suggests Clorox should see double-digit EPS growth.
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