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Stocks Trade Sideways on Strong Earnings, Weak GDP


Today's financial recap and tomorrow's financial outlook.

Markets were mixed Friday as disappointing GDP data offset the good mood produced by positive reactions to tech earnings reports. (AMZN) shares surged today after the company reported a fourth-quarter profit that was well ahead of analysts' expectations. Amazon offered tepid first-quarter guidance, but its surprisingly strong profit margins excited Wall Street.

Google (GOOGL) was another major tech winner today. While its fourth-quarter earnings were a bit light relative to consensus estimates, its revenues were strong and the stock broke out of its long slump.

The first estimate of fourth-quarter GDP growth was 2.6%, missing the 3.0% expected. However, personal consumption was above estimates at +4.3% growth.

The Danish government announced that it would suspend new bond issuance in an effort to hold down its currency against the euro. This came after it cut interest rates three times in just 10 days.

Russia announced a surprise cut in its benchmark policy rate in order to fight hyperinflation and currency devaluation.

In equity markets, the Russell 2000 was a notable downside outlier today, dramatically underperforming the S&P 500, Dow Jones Industrial Average, and NASDAQ Composite.

Burger chain Shake Shack (SHAK) came public today and more than doubled its $21 IPO price.

Chevron Texaco (CVX) reported better-than-expected earnings. However, the company appeared cautious toward the future, anouncing a 13% reduction in capital expenditures and a suspension of its share repurchase program.

Elsewhere in the energy patch, the Baker Hughes (BHI) rig count was release today. In keeping with the recent trend, 90 US oil rigs were shut down last week, bringing the total down to 1543. This cut in production sent oil prices sharply higher, and energy was the best performing major sector on the day.

Tomorrow's Financial Outlook

On Monday, December Personal Income, Personal Spending, and PCE Prices will be reported at 8:30 a.m. ET, followed by the January ISM Index and December Construction Spending at 10:00 a.m.

Major names reporting earning Monday include ExxonMobil (XOM), Sysco (SYY), Anadarko Petroleum (APC), and Sprint (S).

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No positions in stocks mentioned.

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