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Adobe (ADBE), Jabil (JBL) Beat Expectations

|Includes:Adobe Systems Incorporated (ADBE), JBL
9:10am (EST)

The bulls had high hopes on starting the week off strong but ran into trouble after an early morning pop. There was a lot of M&A news before the bell and we covered much of it yesterday but a sharp rebound in the dollar shortly after the open held gains in check. Still, the bulls managed to push new highs on both the S&P 500 and the Nasdaq which bodes well for the rest of the week.

The Dow traded to a high of 11,517 but fell 14 points by the close and settled at 11,478. The index continues to battle and break through the 11,500 level but has failed to close atop this perch despite trading above it for 6 straight sessions. We are still looking for a run up to 11,600-11,700 by yearend while support remains 11,200 and then 11,000.

The S&P 500 gained 3 points to close at 1,247 but not before kissing another 2-year high of 1,250. Like a broken record, we have been harping on this region for a month and the bulls finally hit the note. The bulls will now target 1,275 with a shot at 1,300 early next year.

The Nasdaq was almost in rhythm as we said to watch for a break above 2,660. The index strummed 2,658 before finishing at 2,649, up 6 points. Tech hit our short-term zone of 2,600-2,700 on December 8, and since then we have stayed within this range. A break above 2,660-2,700 would be bullish heading into 2011.

Turning to earnings, Adobe Systems (ADBE, $29.18, up $0.39) popped 5% in after-hours last night, to $30.72, after reporting a profit of $269 million, or $0.53 a share, versus a loss of $32 million, or $0.06 a share, in the year period.  Revenue came in at $1 billion which was the number we were looking for. Wall Street was expecting earnings of $0.52 a share on $988 million in revenue. Adobe would have earned $286 million, or $0.56 a share, but took some one-time item charges.

Elsewhere, our subscribers are giving pats on the back to Jabil Circuit (JBL, $17.66, up $0.19) after the company posted earnings of $107 million, or $0.49 a share, on revenue of $4.1 billion. Last year at this time, Jabil recorded a loss of $28 million, or $0.13 a share, on sales of $3.1 billion. Just like Adobe, Jabil would have earned $132 million, or $0.61 a share, if not for one-off’s, as analysts were looking for $0.55 a share on $3.97 billion in revenue.

Jabil was also up 5% after the close to $18.47 and was within spitting distance of its 52-week high of $18.49. Shares have extended those gains and are above $19 in pre-market action.

As we head to press, Dow futures are higher by 48 points while the S&P 500 futures are up 5 points. The Nasdaq 100 futures are showing a gain of 8 points.

We have a lot of good news to cover in our Members Area and we may release one or two possible option trades today. We want to see how the open holds before we take action. Subscribers, check for the updates.
Stocks: ADBE, JBL