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The broad-based S&P 500 (SNPINDEX: ^GSPC ) was tugged in every direction today, as it received a boost from a potential U.S. debt ceiling resolution on one end, and had its gains "chipped" away by Intel (NASDAQ: INTC ) on the other end.
In a typical case of Congressional kick-the-can, Republican lawmakers plan to propose a bill next week that would extend the U.S. debt ceiling approximately three months, until mid-April. Theoretically, this should give Congress enough time to hash out a mixture of spending cuts and tax increases necessary to move toward a balanced budget.
Pulling in the opposite direction is chip-making giant Intel, which underwhelmed Wall Street with a 27% drop in fourth-quarter profits and a plan to boost capital expenditures by $2 billion, to $13 billion in 2013. Intel's profits are being squished by consumers' transition from PC's to mobile devices, where Intel doesn't have nearly the same presence. Intel's management feels the increase in spending is necessary to position the company for future mobile growth, but it'll come at the price of weaker bottom-line earnings for the foreseeable future.
Digesting all of this news, the S&P 500 still managed to power forward to another closing high of 1,485.98, up 5.04 points (0.34%) on the day.
Leading the charge higher today within the S&P 500 was genetic testing and products maker Life Technologies (UNKNOWN: LIFE.DL ) which rose 10.6%. In a statement released today, Life's board of directors voted to keep both Deutsche Bank and Moelis & Company onboard to "aid with its strategic annual review." Wall Street investors know this fancy phrase to mean only one thing: a buyout could be in the works. My Foolish colleague Keith Speights has already done a little reconnaissance and found, via the Financial Post, that four private-equity firms -- Blackstone, KKR, TPG Capital, and Carlyle Investment Management -- are showing interest in Life Technologies. Whether it gets ultimately purchased or not doesn't seem to matter, because I and my Foolish colleagues, Travis Hoium and Alex Planes, consider it well-positioned within a growing health-care research field.
Following a surge in net income from Goldman Sachs earlier in the week due to a very favorable low lending rate environment, Morgan did its best to try and top Goldman's results. For the quarter, the investment bank reported a profit of $573 million, reversing a year-ago loss of $222 million, as layoffs and compensation cuts were relied on to keep costs down, while its sales and trading revenue more than doubled from the year-ago period. In a conference call with analysts, Morgan Stanley CEO, James Gorman, estimates his firm could "reach a return on equity of 10% given current market conditions." Considering that Goldman delivered an ROE of 16.8%, and is trading below book value, I'd still rather own Goldman.
For oil and gas information and technology solutions provider Schlumberger, it was business as usual. Although its fourth-quarter net income actually fell 4% over the year-ago period, it edged past Wall Street's expectations by $0.01. The big boost came from Schlumberger's plans to spend $3.9 billion in capital expenditures in 2013, its announcement of a 14% boost in its quarterly dividend, and its continuing focus on growing its international presence where its revenue growth has been the strongest. I would really prefer to see a rebound in U.S. natural gas drilling before giving Schlumberger two thumbs up, but it's still, admittedly, very inexpensive, even after today's pop.
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