Futures Gain As January Employment Data Eases Inflation Fears

by: SA Editors
SA Editors
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Wall St. Breakfast's Pre-Market Snapshot:

U.S. Futures As of 8:47 AM EST

S&P 500: +3.70; 1,454.50
NASDAQ 100: +5.25; 1,808.50
Dow: +22.00; 12,733.00

International Indexes

Asia
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Commodity Futures (Reuters/Jefferies CRB)

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Natural Gas: +1.02%; $7.61 (+$0.08)
Silver: -0.40%; $13.67 (-$0.055)

U.S. Breaking Newssee today's Wall Street Breakfast for earlier news

U.S. Payrolls, Wages Increased Less Than Expected in January

U.S. employers hired 111,000 workers in January, lower than the 170,000 economists forecast, and unemployment unexpectedly rose 0.1% to 4.6%. It is the first time in three months unemployment rose. Average hourly wages gained only 0.2%, also less than expected, adding evidence to the Fed's view that U.S. economic growth is slowing but continuing at a moderate pace. Modest job and wage gains generally mean a lessening of the threat of inflation, an indication the Fed would be more likely to hold rates steady or even lower them in the future.
• Sources: Bloomberg, MarketWatch
• Commentary: Too Early To Worry About Employment Being Too Strong, Maybe Employment Really Does Push the Economy, Economic Report Roundup: Labor Numbers Surprise
• Stocks and ETFs to watch: S&P 500 Index - "Spiders" (NYSEARCA:SPY), iShares S&P 500 Index (NYSEARCA:IVV)

Chevron Posts In Line Earnings

Chevron, the #2 U.S. oil company, announced this morning Q4 2006 earnings of $1.74/share ($3.77b), down 9% from $1.86 ($4.14b) in Q4 2005, but slightly beating analyst consensus estimates of $1.73/share. Revenues were $47.75b vs. $53.79b last year. CEO David O'Reily failed to Chevron 02 02 2007 Chartmeet his 2006 production target of 2.7-2.8b barrels. Chevron's report comes a day after the world's two biggest oil companies, Exxon and Royal Dutch Shell, posted strong Q4 numbers that exceeded analyst estimates. Chevron shares, which closed at $74.47, were down $-0.31 to $74.16 (-0.42%) in pre-market trading.
Sources: Press Release, MarketWatch, Bloomberg
Commentary: Chevron, ConocoPhillips & Anadarko Enjoying Positive MomentumEye on ChevronChevron Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: Chevron Corp. (NYSE:CVX). Competitors: ExxonMobil Corp. (NYSE:XOM), Royal Dutch Shell (NYSE:RDS.A). ETFs: Oil Service HOLDRs Trust (NYSEARCA:OIH), United States Oil Fund LP (NYSEARCA:USO), PowerShares DB Oil (NYSEARCA:DBO), iShares Dow Jones U.S. Oil & Gas Exploration Index (NYSEARCA:IEO)

Gannett Beats by $0.02; USA TODAY Ad Rev Up 13%

Gannett reports Q4 net income rose 3% to $353.3 million -- diluted EPS from continuing operations grew 4.9% to $1.51/share -- on revenue growth of 7.5% to $2.21b. According to EarningsWhispers.com the consensus estimate is $1.49/share. Gannet credits the increase in revenue to having an extra week in the quarter, in addition to higher advertising demand at its newspaper and broadcasting segments, and from its TV station acquisitions. Gannett-GCI-1yr-chart-02-01-07Newspaper segment revenues increased 4.9% to $1.94b, with paper advertising revenues up 3.7% to $1.45b. USA TODAY ad revenue climbed 13%, but only 3.1% for the calendar year. Revenue at its broadcasting segment jumped 30% to $270.6m. Gannett's shares closed 0.35% lower to $57.94 in normal trading yesterday.
Sources: Earnings release
Commentary: Nation's Big-Three Newspapers to Join Forces?Fewer Newspapers With Lower Circulation Is the Way of the FutureGannett Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: Gannett (NYSE:GCI). Competitors: Belo (NYSE:BLC), Dow Jones (DJ), E.W. Scripps (NYSE:SSP), McClatchy (NYSE:MNI), Media General (NYSE:MEG), The New York Times (NYSE:NYT), The Washington Post (WPO), Tribune (TRB)

Amazon's Profit Falls 51% Despite 34% Rise in Revenue; Shares Trading Lower

After yesterday's close, Amazon.com announced its fourth-quarter profit fell 51% sending shares lower by $1.00, or 2.58%, to $37.70 in pre-market action.amzn By the numbers, earnings fell to $98 million, good for EPS of $0.23, versus earnings of $199 million (EPS of $0.47) a year earlier. The drop in profit occurred despite a 34% increase in sales to $3.99 billion. Part of the reason for the decline in net earnings stemmed from the loss of a $38 million tax benefit in the prior-year period. Gross margin fell to 21.3% from 22.4% a year earlier. Analysts were expecting EPS of $0.21 on sales of $3.76 billion. Looking ahead, Amazon forecast first-quarter revenue of between $2.85-$3 billion, exceeding consensus estimates of $2.74 billion; full-year sales are projected at $13-$13.7 billion, ahead of the $12.6 billion analysts were projecting.
Sources: Amazon.com Q4 2006 Earnings Call Transcript, Press Release, Wall Street Journal, N.Y. Times, MarketWatch, Bloomberg
Commentary: Color On Amazon's QuarterNotable Nuggets From Amazon's ReportCramer's Take On AMZN
Stocks/ETFs to watch: Amazon.com (NASDAQ:AMZN). Competitors: Amazon.com (AMZN), eBay (NASDAQ:EBAY), Overstock.com (NASDAQ:OSTK), Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Best Buy (NYSE:BBY), Circuit City (NYSE:CC). ETFs: First Tr DJ Internet Index Fd (NYSEARCA:FDN), Internet HOLDRS (NYSE:HHH), Retail HOLDRS (NYSEARCA:RTH)

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Asian Headlines (via Bloomberg.com)

Asian Stocks Climb to Nine-Month High as Sony, Samsung Electronics Advance Asian stocks advanced to the highest in nine months as U.S. consumer spending climbed. Sony Corp. (NYSE:SNE) and Samsung Electronics Co. led gains by exporters.

Mitsubishi Chemical to Acquire Drugmaker Tanabe in $4.6 Billion Takeover Mitsubishi Chemical Holdings Corp., Japan's largest chemicals company, agreed to buy Tanabe Seiyaku Co. for 560 billion yen ($4.6 billion) to almost double sales at its drug unit.

Nippon Oil Profit Plunges 81 Percent on Lower Inventory Value, Fuel Demand Nippon Oil Corp., Japan's biggest refiner, said third-quarter profit plunged 81 percent after crude's decline from its July record price reduced the value of oil inventories and a warmer-than-average winter cut fuel demand.

China's Stocks Fall, Capping Index's Biggest Weekly Decline in Five Years China's stocks fell, rounding off the Shanghai Composite Index's biggest weekly drop in five years.

European Headlines (via Bloomberg.com)

Blackstone, KKR and CVC Evaluate Sainsbury for Possible Takeover Offer Blackstone Group LP, Kohlberg Kravis Roberts & Co. and CVC Capital Partners Ltd. said they're considering an offer for U.K. supermarket company J Sainsbury Plc in what would be Europe's biggest leveraged buyout.

European Stocks Rise, Led by Sainsbury's on Possible Bid; Morrison Jumps European stocks rose for a second day after buyout firms said they're considering an offer for U.K. supermarket chain J Sainsbury Plc in what would be the region's biggest private-equity takeover.

E.ON Shares Surge as Gas Natural Drops $32.3 Billion Rival Bid for Endesa Shares of E.ON AG (EON) climbed after Gas Natural SGD SA dropped its takeover offer for Spain's Endesa SA (ELE), leaving the German utility the sole bidder with a 36.5 billion-euro ($47.5 billion) offer.