Tech Results Good Enough; Rally Likely Not Derailed

Some solid earnings results, continued improvement in the jobs market, and restrained inflation helped stocks extend their recent rally. Tech has helped lead the market rally this year (along with a rebound in financials) and will be in the spotlight tomorrow following the reports from four bellwethers tonight. At first glance, the results are a bit lackluster, and a little more in line with what were the type of earnings we were expecting to come out of the tech sector this quarter. However, the results are likely good enough not to derail the current feel-good rally the market has been enjoying.

The Cloud Computing Stocks Index was the top performing tickerspy Index on the day, led by F5 Networks (Nasdaq: FFIV - News) with a 11% gain. The Chinese Solar Stocks Index was the day's worst performing tickerspy Index, with Trina Solar (NYSE: TSL - News) down -16%.

Stocks rose on the day, led by a 19-point, or 0.7%, increase in the Nasdaq to 2,788. The Dow climbed 46 points to 12,625, while the Nasdaq jumped 6 points to 1,314. Oil slipped -20 cents to $100.39 a barrel, while gold fell -$5.40 to $1,654.40 an ounce.

In economic news, first time claims for jobless benefits fell to 352,000 last week, marking the lowest weekly number since April 2008. Economists were expecting 385,000 jobless claims. The four-week moving average dropped to 379,000, the second-lowest reading in three years. Separately, the Labor Department said its Consumer Price Index was flat in December, while core CPI was up 0.1%. Economists had expected an increase of 0.1% for both the headline and core numbers.

In earnings news, Bank of America (NYSE: BAC - News) reported a fourth-quarter profit of $1.58 billion, or 15 cents per share, compared with a year-earlier loss of -$1.6 billion, or -16 cents per share. The fourth-quarter results were helped by one-time gains from asset sales and from the exchange of debt securities. Total revenue rose by 11% to $24.89 billion, ahead of the the $24.08 billion consensus. Provisions for bad loans fell to $2.9 billion from $5.1 billion a year earlier. Shares of Bank of America rose 2.4%. Nearly 60 pros held Bank of America in their portfolios at the end of Q3 and nearly 6,900 tickerspy members own the stock in their portfolios.

Shares of F5 Networks soared 10.6% after the network equipment company posted strong fiscal first-quarter results and sounded a bullish tone on the fiscal second quarter. The company reported a first-quarter profit of $66.5 million, or 83 cents a share, compared with $55.7 million, or 68 cents a share, a year earlier. Adjusted EPS came in at $1.03. Sales jumped by 20% to $322.4 million. Analysts were looking for EPS of $1.01 on revenue of $319.0 million. F5 expects a fiscal second-quarter profit on an adjusted basis of $1.05-$1.07 a share on revenue of $332-$337 million. Four pros counted F5 among their top holdings at the end of Q3 and nearly 560 tickerspy members own the stock in their portfolios.

Managed care company UnitedHealth (NYSE: UNH - News) said its fourth-quarter profit jumped 20% to $1.26 billion, or $1.17 per share, from $1.04 billion, or 94 cents per share, a year earlier. Revenue increased 8% to $25.92 billion. Analysts had expected a profit of $1.03 per share on $25.64 billion in revenue. UnitedHealth reiterated its full-year 2012 guidance of EPS of $4.55-$4.75 on revenue of $107-$108 billion. Analysts were expecting EPS of $4.77. Shares of UnitedHealth fell -3.0%.

Shares of Eastman Kodak (NYSE: EK - News) plunged -35.1% after the photography company filed for Chapter 11 bankruptcy. Kodak had about $5.1 billion of assets and $6.75 billion of liabilities at the end of September, according the bankruptcy filing. The company also announced that it has secured a $950 million, 18-month credit line from Citigroup in order to continue operating during the bankruptcy process.

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