Ultimate Market Recap: Apple Gets Fruitful Report, SanDisk Slides 8%

Wall St. Cheat Sheet

Wednesday Morning’s Top Stories

Bank of America Corporation   : FINRA announced that it has fined Merrill Lynch, Pierce, Fenner & Smith $1M for failing to arbitrate disputes with employees relating to retention bonuses. Registered representatives who participated in the bonus program had to sign a promissory note that prevented them from arbitrating disagreements relating to the note, forcing the registered representatives to resolve disputes in New York state courts. FINRA found that Merrill Lynch, after merging with  Bank of America  in January 2009, implemented a bonus program to retain certain high-producing registered representatives and purposely structured it to circumvent the requirement to institute arbitration proceedings with employees when it sought to collect unpaid amounts from any of the registered representatives who later left the firm. Shares of Bank of America Corporation are trading 0.21%  higher  today.

CA, Inc.   : CA Technologies’ energy and sustainability management solution CA ecoSoftware has been chosen by NCC Group to help manage the company’s sustainability program and better meet its climate change strategy by automating carbon reporting, cutting carbon emissions and improving NCC Group’s environmental profile. NCC Group, a construction and property development company in the Nordic region, is implementing the CA ecoSoftware solution throughout its European operations. Shares of CA, Inc. are trading 10.47%  higher  today.

Corning Incorporated   : James B. Flaws, vice chairman and CFO, remarked. We are working closely with our customers to reduce glass prices to help them with their immediate financial strains. To that end, price declines will be significant in the first quarter of 2012, as they were in last year’s fourth quarter. We expect significant double-digit price declines over the cumulative two-quarter period. We are hopeful that our pricing actions, combined with our capacity decisions, will help us get back to more stable price declines in the coming quarters.” Corning is not anticipating much sequential change in the overall glass market in the first quarter. Volume at its wholly owned business should be in line with the glass market. In the company’s Telecommunications segment, Corning is forecasting that demand for its fiber-to-the-home, enterprise networks, and wireless products will remain strong worldwide. Shares of Corning Incorporated are trading 10.67%  lower  today.

Abbott Laboratories   : Abbott forecasts specified items for the full-year 2012 of approximately $0.35 per share, primarily associated with acquisition integration and cost reduction initiatives. This forecast of specified items excludes one-time costs related to the planned separation of Abbott into two companies, which will be quantified at a later date. Including these specified items, projected earnings per share under Generally Accepted Accounting Principles, or GAAP, would be $4.60-$4.70 for 2012. Shares of Abbott Laboratories are trading 1.91%  lower  today.

Motorola Solutions Inc   : Sees FY12 operating earnings approximately 17% of sales vs. consensus $2.89. Shares of Motorola Solutions Inc are trading 4.74%  lower  today.

Toyota Motor Corporation   : The federal government was sued by an auto safety firm seeking records of the government’s probe into the possible unintended acceleration of a Toyota Prius last year, The New York Times reported yesterday, citing a statement by the plaintiff. The government is withholding records that may depict an acceleration incident caused by the Prius’ electric systems, the auto safety firm said, according to the newspaper.  Shares of Toyota Motor Corporation are trading 0.88%  higher  today.

Wednesday Morning Hot Stocks

Verizon Communications Inc.   : company added 1.5 million retail customers, including 1.2 million retail postpaid customers. While the wholesale channel grew during the fourth quarter, a loss of telematics customers resulted in a net decrease of 490,000 wholesale and other connections in the quarter. At year-end 2011, smartphones accounted for 44% of the Verizon Wireless retail postpaid customer phone. Shares of Verizon Communications Inc. are trading 2.06%  lower  today.

Quest Diagnostics Incorporated   : Quest Diagnostics announced that its Board of Directors increased the company’s share repurchase authorization by $1B. This action increases the current share repurchase authorization to $1.1B. During 2011, the company repurchased approximately 17M shares of common stock for $935M. The company had 157M shares outstanding as of Dec. 31, 2011. Shares of Quest Diagnostics Incorporated are trading 5.68%  higher  today.

Kimberly Clark Corp   : The company expects the increase in operating cash flow will be helped by modest pension contributions. Comments taken from Q4 earnings conference call. Shares of Kimberly Clark Corp are trading 2.71%  lower  today.

BioLineRx Ltd. – American Depositary Shares   : BioLineRx announced it has signed a worldwide, exclusive license agreement with Genoscience, a French company focused on viral disease therapeutics, to develop and commercialize BL-8020, an orally available treatment for Hepatitis C. Shares of BioLineRx Ltd. – American Depositary Shares are trading 77.81%  higher  today.

Texas Instruments Incorporated   : After Texas Instruments reported stronger than expected Q4 revenues, Gabelli believes that multiple factors will cause the company’s margins to accelerate in 2012. The firm maintains a Buy rating on the stock. Susquehanna raised its price target on Texas Instruments following Q4 results. The firm believes Q1 will represent the bottom of the current cycle and the company should receive a tailwind from customers and distributors inventory replenishment. Shares are Positive rated. Shares of Texas Instruments Incorporated are trading 0.21%  lower  today.

Wednesday’s Trending Stocks

Apple Inc.   : Samsung’s Galaxy Nexus, developed in cooperation with Google , is not one of the devices that Apple is seeking to ban in Germany due to alleged patent infringement, according to The Korea Herald, which cited an unnamed Samsung official. Meanwhile, a ruling against Apple in two cases in Germany – set to be decided tomorrow and February 2 – would cause sales of Apple’s iPhone to be banned in the country until an appeal, the newspaper added. Shares of Apple Inc. are trading 6.87%  higher  today.

The Boeing Company   : Boeing and Norwegian have announced a firm order for 100 fuel-efficient 737 MAX airplanes and 22 Next-Generation 737-800s. The total order is valued at $11.4B at list prices and represents the largest-ever Boeing order from a European airline. Oslo-based Norwegian is the first European carrier to finalize an order for the 737 MAX. The order supports Norwegian’s plans to build on the success provided by its fleet of Next-Generation 737-800s for its rapidly expanding operations. This order continues the momentum for the 737 MAX. With the Norwegian order, the 737 MAX has orders and commitments for more than 1,000 airplanes from 15 customers and the Next-Generation 737 family has orders for more than 6,300 airplanes. Shares of The Boeing Company are trading 2.12%  lower  today.

Illumina, Inc.   : Roche (RHHBY) announced that it is proposing to acquire all outstanding shares of Illumina for $44.50 per share in cash, or an aggregate of approximately $5.7 billion on a fully diluted basis. This offer represents a 64% premium over Illumina’s stock price on Dec. 21, 2011 the day before market rumors about a potential transaction between Roche and Illumina drove Illumina’s stock price significantly higher a 61% premium over the one-month historical average and a 43% premium over the three-month historical average of Illumina’s share price, both as of December 21. It also represents a 30.1x multiple of Illumina’s projected forward earnings based upon analysts’ current consensus estimates for 2012. Shares of Illumina, Inc. are trading 42.98%  higher  today.

WellPoint, Inc.   : On January 24, 2012, the Board of Directors increased the Company’s dividend by 15% and declared a quarterly dividend to shareholders for the first quarter of 2012 of $0.2875 per share. The first quarter dividend is payable on March 23, 2012, to shareholders of record at the close of business on March 9, 2012. Shares of WellPoint, Inc. are trading 5.63%  lower  today.

Telefonaktiebolaget LM Ericsson   : The company saw increased operator cautiousness during Q4 — due to uncertainties such as economic development and political unrest in some countries. Shares of Telefonaktiebolaget LM Ericsson are trading 15.98%  lower  today.

Market Recap

Markets closed up on Wall Street today:  Dow  +0.66%,  S&P  +0.87%,  Nasdaq  +1.14%,  Oil  +0.85%,  Gold  +2.79%.

On the commodities front,  Oil   climbed to $99.79 a barrel. Precious metals were also up, with  Gold   rising to $1,710.90 an ounce while  Silver  climbed 4.10% to settle at $33.29.

Hot Feature:  Obama Pushes Tax Reform, Job Training in State of the Union

Today’s markets were up because:

1) Europe.  European leaders are meeting in Davos, Switzerland, where the World Economic Forum kicked off today with a keynote speech by German Chancellor Angela Merkel, in which she suggested the European Union and the United States pursue a free trade deal to grow industry. Merkel reiterated her commitment to the euro, particularly to a fiscal compact that would hold euro states accountable to the group for their budgets so as to avoid the profligacy that set off the debt crisis in the first place. However, the leader of the euro’s largest economy batted away appeals from the International Monetary Fund and many others to increase the size of the fund created to help weaker euro-zone nations struggling under the burden of their government debt.

2) Fed.  After a morning slump, stocks moved higher in the afternoon following the report by the Federal Open Market Committee and comments by Federal Reserve Chairman Ben Bernanke. Fed policymakers announced their decision today not to increase its benchmark interest rate until at least late 2014, extending an earlier commitment to keep record-low rates through mid-2013. The decision leaves the door open for further bond buying to stimulate the economy, though officials have resisted further purchases for fear it would raise the risk of high inflation later. The Fed also offered a better outlook for prices that will allow it more room to keep rates low.

3)  Apple.  The Nasdaq climbed higher today after Apple reported the best quarter ever for a tech company. Apple doubled profit and revenue year-over-year in the last quarter, earning more money in the Q1 2012 than the entire company was worth just eight years ago. Apple saw more than twice the profits of Microsoft or Walmart , while Apple’s profits exceeded Google’s entire revenue for the quarter. Apple shares closed the day at $446.66 after climbing 6.24 percent in regular trading today. 

BONUS:  Pending Home Sales Declined 3.5% in December

After Hours Radar Stocks

Shares of  Netflix Inc.   surged more than 13 percent in late market trading. The company reported net income of $40.7 billion (73 cents per share), which beat estimates of 55 cents per share. Shares of  Google  and  DISH Network Corp.   traded lower on the news.

SanDisk Corp.   shares dropped 8 percent after the closing bell. The company reported disappointing fourth quarter results.  Net income decreased 42.1 percent to $281.2 million. Shares of rival firm  Western Digital Corp. also fell after the report.

Investor Insight:  Should Apple Buy Gold?

ETrade Financial Corp.   traded 2.25 percent lower in extended trading.  The online broker reported a loss of $6.3 million (2 cents per share) for the fourth quarter.  “While there were unique items impacting our results in the quarter, our return to full year profitability in 2011, for the first time in five years, marks significant progress for the company,” said Steven Freiberg, Chief Executive Officer.  Shares of  TD Ameritrade   climbed slightly higher, while  Charles Schwab Corp.   traded flat.

Stanley Black & Decker Inc.   shares fell .82 percent, despite reporting solid financial results.  Net income increased 20 percent to $165.3 million (99 cents per share), compared to $137.8 million (81 cents per share) in the same quarter a year earlier.  Competitors such as  Home Depot Inc.   and  Lowe’s Companies Inc. also traded lower.

To contact the reporter on this story: Stella Mariz at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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