The Dow "flirted with 13,000," as they say, as all three major indexes moved up today:
|Dow Jones Industrial Average (INDEX: ^DJI )||+46.02 [+0.36%]||12,984.69|
|Nasdaq (INDEX: ^IXIC )||+23.81 [+0.81%]||2,956.98|
|S&P 500 (INDEX: ^GSPC )||+5.80 [+0.43%]||1,363.46|
On the economic front, there was positive jobs news as the Labor Department reported 351,000 initial claims for state unemployment benefits for last week. That brings the four-week average down to 359,000, a figure we haven't seen since March 2008.
Meanwhile, there was one big mover up on the Dow and one big mover down.
Procter & Gamble (NYSE: PG ) was up 3.1% after announcing a potential $10 billion in cost cuts. It announced an additional 4,000 nonmanufacturing job cuts to supplement the 1,600 job cuts already announced for this fiscal year. That's a little more than 4% of its total workforce, or about 10% of its non-manufacturing total. This is in addition to spending cuts in areas like marketing, packaging, and supply chain. In total, it's looking to spend $3.5 billion by 2016 to effect $10 billion in annual savings. To put that in perspective, P&G had $85 billion in sales in 2011.
On the downside, Hewlett-Packard (NYSE: HPQ ) shares tumbled 6.5% after reporting surprisingly weak first-quarter earnings after hours yesterday. Sales fell 7% and earnings fell a whopping 44%. On a per-share basis, that resulted in EPS of $0.73 a share versus $1.17 a share last year. Aside from acquisitions, segment operating earnings were down pretty much across the board.
HP's P/E ratio is now at 9 times earnings, factoring in drops in both the numerator and denominator. The question for investors is whether those earnings are going to continue to deteriorate.
There's a lot of clamoring for new CEO Meg Whitman to make huge, sweeping changes and declarations. However, I like that she's taking her time and cautioning for a long road ahead.
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