Market Focus with Tom Hudson – Jan 18, 2012

TOM HUDSON: Some big stakes here are being argued over Susie, didn`t
hurt technology stocks, at least not today though, as this debate
continues. Let`s go ahead and get you updated with tonight`s “Market
Focus.” A pretty healthy day to be long U.S. stocks. They`ve caught a nice
bid today, pushing prices up for the major indices to the highest levels
we`ve seen since July. The S&P 500 saw steady buying interest throughout
the session, climbing on earnings news and stronger signs from the housing
market. With today`s 1 percent gain, the S&P 500 is back over the 1300
level as we mentioned for the first time since late July. It`s up almost 20
percent since that late October low.

Bank giant Goldman Sachs helped set the tone early. While profits were
down considerably from a year ago, the fourth quarter earnings were much
stronger than anticipated. Revenues were the second lowest since the middle
of the financial crisis. But the fact that Goldman rather beat expectations
really helped push the stock up almost 7 percent. Volume was heavier than
usual with shares tonight sitting at a six-week high.

Holding back the financial sector was trust banks. Bank of New York
disappointing earnings coming in as fee revenue fell. It called it a quote,
challenging revenue quarter, end quote. That hurt similar bank stocks.
State Street (NYSE:STT) dropped 6.5 percent. Fee revenue also weakened at
State Street (NYSE:STT) last quarter. Northern Trust (NASDAQ:NTRS) fell
almost 2 percent after its earnings came up short compared to expectations.
But it was the Goldman performance that topped the financial sector, making
it the best stock in that sector today, rising almost 2 percent overall for
the financials. Technology and consumer stocks did well, up 1.6 percent

Helping those consumer stocks was less pessimism among home builders.
In fact sentiment from that industry is now at its highest level since
2007. KB Homes and MDC Holdings, both home builders, jumping 7.5 percent
each. Pulte Group was up 6 percent. That`s the highest close for shares of
PHM since June.

While technology stocks did rise as a group, the laggard was eBay
(NASDAQ:EBAY), slipped ahead of reporting a solid fourth quarter at the
close tonight. Here are the numbers with earnings coming in $0.03 better
than estimates, driven by its Paypal and auction units, which both saw
double digit jumps in revenue. However, the first quarter outlook for eBay
(NASDAQ:EBAY) was a tad shy of estimates. You can see the small loss during
the regular session off a fraction and its shares in after hour`s action
gained almost 2 percent, putting it close to $31 per share. Some analysts
point out that eBay (NASDAQ:EBAY) though has a history of giving cautious
guidance as it did tonight.

Driving technology was semiconductor stocks. Chip maker Linear
Technology (NASDAQ:LLTC) jumping 12 percent after a strong earnings report
and a strong forecast. Some analysts think that Linear`s strength is
specific to that company. We did though see some buying of fellow chip
companies Altera (NASDAQ:ALTR) and Texas Instruments (NYSE:TXN), up 10 and
9 percent respectively.

One more from the world of high tech. Suzanne mentioned Apple
(NASDAQ:AAPL). Tomorrow, it`s expected to announce a new strategy targeting
the school textbook business. Tonight, Apple (NASDAQ:AAPL) shares were at
an all-time high. Today`s 1 percent gain was enough to put it over $429 per
share. RBC thinks that it can move even higher. It`s got a price target of

From “Occupy Wall Street” demonstrations to regulatory scrutiny, there
has been plenty of debate over student loans. There`s new speculation today
from the Obama White House that it may change how much a company`s revenue
may come from student financial aid. Right now it`s at 90 percent. It may
be reduced. For-profit schools Apollo Group (NASDAQ:APOL) and Devry fell on
the rumors, down 6 and 3 percent respectively.

And that is tonight`s “Market Focus.”

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