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Two Ways to Play: Cummins Beats the Number


Strengthen your portfolio in good times and bad.


Cummins Beats the Number

Cummins (CMI), the engineering firm that makes engines and power systems, reported results for the fourth quarter today. The company said earnings came in at $1.36 a share, blowing away consensus estimates of $0.76 per share. Revenues rose 3.4% on an annual basis to $3.4 billion versus Wall Street expectations of $2.83 billion.

The company attributed the positive results to continued strength in the emerged markets, China, India, and Brazil. Also notable was the "significant increase" in demand for on-highway truck engines and components in North America, a positive sign for the overall economy.

Cummins also issued upside guidance for fiscal year 2010. It sees revenues around $11 billion for the year while Wall Street was expecting $10.23 billion.

From the Bull Pen: Cummins is trading higher in the premarket and the action is breaking the downtrend of the January correction. Those bullish should eye the $55 level as first resistance. Consider a 2% sell stop below entry. As for another big engineering giant, Caterpillar (CAT) may also be an option. A sell stop can be set below the recent low (near $50.80).

From the Bear Cave: Bears can look to the broader markets, such as the S&P 500 depository receipts (SPY). The stock needs to surpass $110 rather quickly or it risks more downside pressure, so keep an eye on that level.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei 1.63%, India -1.18%, Hang Seng 0.14%, Shanghai -0.23%, and Taiwan -1.26%.

Across the pond, we see the FTSE 0.36%, CAC 0.76%, DAX 0.70%

As of 8:30 AM EST, S&P Futures are trading +2.25 to 1088.50. Nasdaq futures are +1.25 to 1757.00.

A Look at Commodities

Over in commodities, crude oil is +0.73 to 75.16 while gold is +7.600 to 1112.60 this morning. Silver is +0.055 to 16.710 and copper +0.0115 to 3.0950.

The dollar Index is -0.0950 to 79.3250.

On the Radar


10:00 Pending Home Sales

Click here for the full trading radar.

Good luck today!

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No positions in stocks mentioned.

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