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On the Sidelines
The market ended cautiously higher on Wednesday, with the DJIA finished at 12,426.75, up 32.85
points or 0.27% higher, S&P 500 finished at 1,335.54, or up 2.91 points or 0.22% higher, while the
tech-heavy NASDAQ Composite ended 0.31% higher or added 8.63 points to end at 2,799.82.
CSCO soared 4.94% to $18.07, leading the Dow 30 by a wide margin. JPM was at the second
place with 2.28% increase, while HPQ followed next at the third place as it gained 2.21%. On the
other side, VZ was the worst performer as it declined 1.38%. Second from the bottom was CAT which
lost 1.17%. Next was a tie between T & PFE which dropped 0.75% and 0.78%, respectively.
As the payrolls had past and earnings are just around the corner with AA to report first, the market
seems to prefer staying on the sidelines. This can be seen from how the market shrugged off the other
news coming from Europe regarding Portugal asking for bailout and that the oil prices stay in the sky.
European Central Bank’s potential tightening on Thursday did not seem to be a concern for the market
either.
Thursday will feature the regular cast: jobless claims data which is expected to be at 285K, slightly
lower than prior week’s 388K. Consumer credit for February is also expected on Thursday; with the
market expectation is set at $4.6B.
Fed chatter on Wednesday featured Federal Reserve of Atlanta President Dennis Lockhart said that it
is too early to end the QE2 because the US economy is still too fragile at the moment. The comment
boosted the expectation that the end of QE2 may be in June, but the start of Fed’s tightening cycle
may still have to wait for a while longer.
Corporate News
BA got another contract modification from the government. This time it got a $271.21M cost-plus-
award-fee contract modification for sight terminals. In addition, BA and Qatar Airways confirmed
orders for three 777 Freighters and two 777-300ERs at the value of $1.4B.
FDA declined MRK’s bid to widen Gardasil application on women above 26 y.o.
MSFT and Toyota agreed to work together on next-gen telematics. MSFT’s international President
Jean-Philippe Courtois said that the company plans to use 90% of its research budget ($9.6
billion) on cloud technology.
PFE and Zacharon Pharmaceuticals agreed to join hands to focus on medications of rare diseases.
The deal worth up to $210M.
VZ and Starz agreed for a deal that will enable VZ to offer 23 channels from STARZ and
ENCORE.
1 .DJI 12,426.75 (+32.85 ● +0.27%) .SPX 1,335.54 (+2.91 ● +0.22%) .IXIC 2,799.82 (+8.63 ● +0.31%)
April 7th 2011
About a month ago, we pointed out that HPQ may fall towards $38.63. HPQ plunged to as low as
$37.60 before rebounded swiftly. Currently the stock lies at $41.18 and poised to move higher
towards $43.50. Once there, weakness may set in and send the stock back down. Look to short on
weakness towards $43.50 with risk set above $45.06 and PT set at $36.61.
2 .DJI 12,426.75 (+32.85 ● +0.27%) .SPX 1,335.54 (+2.91 ● +0.22%) .IXIC 2,799.82 (+8.63 ● +0.31%)
April 7th 2011
3 .DJI 12,426.75 (+32.85 ● +0.27%) .SPX 1,335.54 (+2.91 ● +0.22%) .IXIC 2,799.82 (+8.63 ● +0.31%)
April 7th 2011
Disclaimer: This report is provided for information purposes only. It is not an offer to sell or to buy any securities. This
report has been prepared based on sources believed to be reliable, but there is no assurance or guarantee regarding its
completeness and accuracy. The author accepts no responsibility or liability arising from any use of the report.
4 .DJI 12,426.75 (+32.85 ● +0.27%) .SPX 1,335.54 (+2.91 ● +0.22%) .IXIC 2,799.82 (+8.63 ● +0.31%)