Stocks End Higher as ECB Easing Plan Eyed

U.S. Market
Stocks ended modestly higher in choppy trading today as the investors considered earnings and tomorrow’s expected launch of a quantitative easing program by the ECB.

It was reported this morning that the ECB is poised to launch a 50 billion euro per month quantitative easing plan tomorrow that will last for a minimum of one year. The size of the program is roughly in line with expectations but there was still mixed reaction to the news.

Housing starts were up 4.4% in December to a seasonal adjusted annual rate of 1.089 million units, above the 1.04 million expected by analysts. Single-family home states were 7.2% higher. Permits were down 1.9% overall but up 4.5% for single-family homes.

U.S. Treasury bonds continued to rally today with the yield on the 10-year bond falling below 1.8%. Eurozone bonds showed some weakness as investors took profits ahead of tomorrow’s ECB meeting.

At market close the Dow, S&P 500 and Nasdaq were up 0.2%, 0.5% and 0.3% respectively.

Stocks on the Move
Shares of Netflix (NFLX) jumped over 17% after the firm posted a strong fourth quarter, adding 1.9 million streaming customers in the United States and 2.43 million streaming customers internationally, versus guidance of 1.85 million and 2.15 million, respectively. Netflix also beat consensus expectations on EBITDA and earnings per share and reported in-line revenue of $1.48 billion. The firm continues to enjoy a solid foundation, ending the reporting period with more than 54 million global paid streaming subscribers.

There were several moving parts to IBM's (IBM) fourth-quarter results reported late Tuesday, but there weren't many surprises, either, as management had framed its perspective well last October when it missed expectations and pulled its fiscal 2015 adjusted earnings target. Revenue from continuing operations in the quarter fell to $24.1 billion, down 12% year over year (though off just 2% when excluding divestitures and adjusting for currency headwinds). Overall adjusted pretax margin ticked up to 30.7% while adjusted diluted earnings per share came in at $5.81. Shares were down 3% on the report.

Although SABMiller's (SBMRY) third-quarter trading update revealed that volume declined in the three months ending Dec. 31, robust pricing leaves the firm on track to meet our our full-year revenue forecasts. Volume in China (down 9%) and North America (down 1%) was weak in the third quarter. SABMiller is one of the few consumer staples firms unable to benefit from the economic recovery in the United States, where sales to retailers fell 1.7%. Beer in the premium category and below is losing share to craft, and we expect continued volume declines of around 1% in the medium term. Shears were up 2.3% at market close.