Daily Wrap
DJIA +80.71 (+0.60%) to 13,471.22; S&P 500 +11.10 (+0.76%) to 1,472.12; NASDAQ +15.95 (+0.51%) to 3,121.76
Today’s session started like yesterday’s with early strength that started to wane as the morning went on. Today differed in that around the 11-11:30 AM EST time we bottomed and then moved higher the remainder of the day. Before the market opened we got slightly worse than expected jobs numbers but for many traders those were offset by strong export data out of China. With earnings season still a week away the market looks like it is happy to continue higher.
The big stock of today was Nokia (NOK) which gained nearly 20% on better-than-expected result in the fourth quarter which was attributed to better than expected Lumia sales and lower operating expenses. NOK has nearly doubles since mid December. While I think NOK could rally to $5, there is a clear negative MACD divergence in place and this last move looks like it could be an ending move that lays way for a more prolonged correction. Not bear trend but a multi week/month consolidation/correction.
Also on the upside today was a favorite of mine, Ford (F) which gained over 2.5% after the company announced it doubled its quarterly dividend to 10 cents. My only concern would be similar to NOK where it feels like this last pop could be at or approaching a more significant point where a greater consolidation/correction is needed.
Closing up just over 4.6% was Urban Outfitters (URBN) after reporting holiday sales which were 15% higher than the same period last year. Piggy backing on the news, Piper Jaffray raised their price target on URBN to $51 from $41 while maintaining their Outperform rating. URBN is not on the list as I cannot always list all the initiations as well but you can see that and other analyst notes at the Upgrades/Downgrades section.
On the downside today and in a big way was Molycorp (MCP). Closing down over 22% after reporting a disappointing forecast for 2013 in both revenue and cash flow. MCP has been a very beaten name and even with today’s drop it has not taken out the recent lows which could mean that MCP is carving out a bottom and the lows are in. The MACD is still positive and will be looking to see if MCP can firm up over the next day or two.
As always you can visit the Event’s Calendar for the release of economic data, scheduled meetings and other news that could move the market.
According to Briefing.com, the following noteworthy companies are scheduled to report earnings before tomorrow’s open: WFC
As I noted above, the market seems happy to keep trudging higher. I am slightly concerned what the earnings reports will start to look like and I want to stop seeing EPS beats on lower revenues. I will be paying the most attention to forecasts and guidance as ultimately it always seems like that is what drives the move after a report. The market is not at lows going into earnings so I definitely feel the margin for error is less. We have taken out recent closing highs and are now targeting the intraday highs of $1474.20. I would personally be scaling back trades as I am not calling a top but the air is starting to feel thin and I don’t want to give back any hard fought gains and I never trade an individual name into earnings, not my style.
