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US stock market daily report (January 23, 2013, Wednesday)

Contributed by Millennium Traders

Netflix Inc. (NFLX: NASDAQ) shares soared higher in aftermarket trading on Wednesday, up 26% after reporting Q4 profit of $8 million or 13 cents a share, on $945 million in revenue. Reports from the company indicate they added 2.05 million new U.S. video-streaming subscribers, to end 2012 with 27.15 million U.S. video-streaming subscribers.

A day after the LED lighting technology company gave a better-than-expected Q2 report and outlook, Cree Inc. (CREE: NASDAQ) shares were higher by 22%, into late afternoon trading on Wednesday. Cree reported earnings of $20.4 million or 18 cents a share, on revenue or $346.3 million for Q2. Cree reported expectations for Q3 profits of 30 cents to 35 cents a share as well as revenue between $325 million and $345 million.

Intuitive Surgical Inc. (ISRG: NASDAQ) shares rose by 9% into late afternoon trading on Wednesday after reporting strong Q4 earnings with profit rising 16%, boosted by growing use of its da Vinci robotic surgical systems despite further declines in prostate procedures and a slumping economy in Europe. Revenue for Q4 rose 23% to $609 million.

A move which will allow the U.S. government to continue paying its bills which would temporarily put off a bigger fight over taxes and spending, the U.S. House on Wednesday approved a suspension of the debt ceiling until May 19. Largely along partisan lines, the Republican-controlled chamber passed the bill by a 285-144 margin. Senate Majority Leader Harry Reid, D-Nev. said the upper chamber will pass the House measure as quickly as possible without any changes. The Obama administration has already said it will sign the temporary extension.

Citing a delayed return to recovery in the euro-area on Wednesday, the International Monetary Fund trimmed its growth forecast for 2013. The IMF cut the growth forecasts for almost all countries in 2013 from the prior estimates released in October, in an update to its world economic outlook. Compared with a prior forecast of a slight 0.2% increase, the IMF now expects the euro-area economy to contract by 0.2% this year, which means two straight years of contraction. The IMF added that uncertainty remains high about the ultimate resolution of the European debt crisis despite recent progress. The IMF report said that activity in the euro area periphery has been softer than expected and is spilling over to the euro area core of Germany and France. For 2013, German economy is expected to slow to a 0.6% growth rate, down from prior estimate of a 0.9% rate. Global economy is expected to grow 3.4% this year, down slightly from the prior forecast of 3.5%. Expectations for 2014 are for a strengthening to a 4.1% growth rate, assuming a recovery takes a firm hold in the euro area economy. Growth forecast for the U.S. has been trimmed to 2.0%, from 2.1%, by the IMF. The IMF said Japan’s sizable fiscal stimulus and further easing will give growth at least a near-term boost, with support from a pickup in the external sector and a weaker yen. “A supportive financial market environment and the turnaround in the housing market have helped to improve household balance sheets and should underpin firmer consumption growth in 2013,” the IMF said. The IMF said that the economic policy of new Prime Minister Shinzo Abe was risky. Urging the Abe government to consider a medium-term fiscal consolidation plan, the IMF said, “The stimulus-induced recovery could prove short-lived, and the debt outlook significantly worse.” Including renewed setbacks from the euro area and possible “excessive” near-term budget cutting in the U.S. the IMF said that downside risks to the global outlook remain significant.