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US stock market daily report (January 22, 2013, Tuesday)

Contributed by Millennium Traders

“Don’t-fight-the-tape” backdrop has begun with the Standard & Poor’s 500 Index (SPX) sustaining a break to multiyear highs, indicating bullish price action. Breakout point and support for the S&P would be the 2012 peak of 1,474 with the S&P rallying to five-year highs, over the past two weeks. At the end of trading on Tuesday, the S&P 500 index posting its longest winning streak in nearly six weeks. Dow Jones Industrial Average (DJI) major resistance remains at the 2012 peak of 13662, with steady near-term uptrend, climaxing at three month highs. A break through the 2012 peak would place the Dow at a five year high.

Google Inc. (GOOG: NASDAQ) reported Q4 earnings on Tuesday of $2.89 billion or $8.62 a share, compared with a profit of $2.71 billion or $8.22 a share for year-earlier period. Google reported a profit of $10.65 a share for the recent quarter on a non-GAAP basis. Revenue minus traffic acquisition costs was $11.34 billion, up from $8.13 billion. Google shares were higher Tuesday in aftermarket trading by 4% or higher by over 30 points.

International Business Machines Corp. (IBM: NYSE ) reported Q4 earnings after market hours on Tuesday with earnings of $5.13 per share, adjusted earnings of $5.39 per share; revenue down 1% to $29.3 billion and forecasts 2013 earnings per share at $15.53. Shares were up 3% in after hour trading.

Mining firm Freeport-McMoRan Copper & Gold Inc. (FCX: NYSE) reported Q4 earnings Tuesday with a profit of $743 million or 78 cents a share, from $640 million, or 67 cents a share, in the year-ago period. The latest quarter included a one-time credit of 4 cents a share, partly offset by labor agreement costs and acquisition costs. Revenue rose to $4.51 billion from $4.16 billion.

Retail pet pharmacy which sells pet medications online and through its 1-800-PetMeds phone line, PetMed Express Inc. (PETS: NASDAQ), reported Q3 earnings rose 17% as they benefited from stronger margins and lower operating expenses. Amid the shift in product mix to higher margin items, including generics, gross margin rose to 34.7% from 34%. Mostly on lower advertising spending, operating expenses were down nearly 10%. For Q3 which ended December 31, the firm reported a profit of $4.6 million or 23 cents a share, up from $3.9 million, or 19 cents a share, a year earlier while revenue decreased 1.8% to $49.6 million. Rising costs had pressured margins, pushing PetMed to become more aggressive in pricing as they shifted to higher-margin items and expanded its product line-up. "We were able to increase our gross margins and decrease our operating expenses to improve our bottom line results this quarter," said President and Chief Executive Menderes Akdag.

The National Association of Realtors reported Tuesday, existing homes sales in December declined 1% to a seasonally adjusted annual rate of 4.94 million however, existing-home sales for December are up 12.8% from previous year. Median existing-home price rose 11.5% from previous year to $180,800. Existing-home sales for 2012 reached struck the highest level seen since 2007 at 4.65 million. During December, inventories fell 8.5% to 1.82 million units, representing a 4.4-month supply at the current sales rate for the lowest supply ratio since 2005. November data was revised to 4.99 million from previous estimate of 5.04 million, which was the highest rate since November 2009. "Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales," said Lawrence Yun, NAR's chief economist.

On Tuesday, the Richmond Fed's index of manufacturing activity which covers a region stretching from Maryland to South Carolina and extends out to most of West Virginia, fell during January to negative 12 from 5 in December, just another sign of weak conditions in the manufacturing sector. Additional data included that the new-orders index sank 27 points to negative 17; shipments index retreated 12 points to negative 11 and the employment index slipped 2 points to negative 5.