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The Dow Now: Hewlett-Packard Continues Rise in Spite of Autonomy Troubles


Intel led all decliners on the day.

MINYANVILLE ORIGINAL The stock market registered modest gains in early Thursday trading, powered by increasing optimism that the White House and Congress will be able to reach a deal to avert the fiscal cliff before the year's end. However, by midday, stocks were struggling to hold on to gains.

"I'm still expecting a deal. On the tax side, 98% of Americans will get to keep their Bush tax cuts on a permanent basis. Both sides of the partisan divide agree that this should happen. That's actually a very big deal, and very good for the economy," said Ed Yardeni, chief investment strategist at Yardeni Research, in a note, according to MarketWatch.

The Dow Jones Industrial Average (INDEXDJX:.DJI) was up 0.01% to 12,983.19 points as of 12:02 p.m. EST.

In spite of some bad news from Moody's Investors Service last night, Hewlett-Packard (NYSE:HPQ) advanced 1.37% to $12.91, topping all Dow gainers once again. Moody's downgraded HP's long-term credit ratings by one notch to Baa1 from A3, three levels above junk status.

"Although HP will maintain strong to leading positions in a number of product areas, the company's credit profile will remain weaker than previously expected over the intermediate term," explained Richard Lane, a Moody's senior vice president, in a statement.

Despite the controversies surrounding its Autonomy acquisition-related $8.8 billion writeoff, shares of HP have performed strongly in the past few days, with investors perhaps not considering the Autonomy write-off a valuation issue. Yesterday, the stock also jumped 3%.

UnitedHealth Group (NYSE:UNH) also improved 1.50% to $53.54 on an overall bullish day for healthcare companies. Aetna (NYSE:AET) (+0.99%), Cigna (NYSE:CI) (+1.19%), Humana (NYSE:HUM) (+0.49%), Coventry Health Care (NYSE:CVH) (+0.51%), and WellPoint (NYSE:WLP) (+1.06%) were all up on the day.

Caterpillar (NYSE:CAT) was also up on the day, lifting 0.86% to $85.67. As a economic bellwether, optimism about the fiscal cliff and an improving US economy certainly bodes well for the stock. Caterpillar gained 1.1% yesterday as well.

Intel (NASDAQ:INTC) was by far the leading decliner, sliding 2.23% to $19.64. According to Wall St. Cheat Sheet, analysts at Goldman Sachs cut their estimates on Intel because of increased margin risk from oversupply. Goldman, in reiterating its Sell rating on the stock, stated that inventory at Intel and AMD (NYSE:AMD) are at record levels and Intel's new capacity is not yet available.

Intel is also in talks, along with Dell (NASDAQ:DELL) and Qualcomm (NASDAQ:QCOM), to invest in Japanese electronics giant, Sharp.

Twitter: @sterlingwong
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