With a record-setting January in the books, the markets registered a strong opening-day performance for the second month of the year. Whether February can keep 2012's impressive pace going remains to be seen. Yesterday's trading session was filled with activity featuring Facebook filing for a $5 billion IPO, several prominent economic indicators released, and positivity over Greek debt deal a resolution.
But before we jump into these macro events, let's see how the three largest indices fared:
| Gain / Loss | Gain / Loss % | Ending Value | |
|---|---|---|---|
| Dow Jones Industrial Average (INDEX: ^DJI) | 83.55 | 0.66% | 12,716.46 |
| Nasdaq (INDEX: ^IXIC) | 34.43 | 1.22% | 2,848.27 |
| S&P 500 (INDEX: ^GSPC) | 11.68 | 0.89% | 1,324.09 |
Source: Yahoo! Finance
All three had solid performances, with the Dow hitting -- but not holding -- May 2008 levels, helped in a large part by strong macro data. It appears that the recent gains by manufacturing are strengthening. Auto sales were up 11% in January, its best showing in almost four years and even Chrysler -- Chrysler -- turned a profit. The ISM index had its best performance since the beginning of summer with 54.1, an increase of 1.0 sequentially (anything over 50 shows expansion), and December construction spending bested expectations.
After hours, Green Mountain Coffee Roasters (Nasdaq: GMCR) reported first-quarter results, confounding short-sellers with an almost 22% gain. The Keurig maker doubled sales to nearly $1.2 billion and blew away earnings estimates. Analysts had expected income to double from 18 cents per share to 32 cents, but Green Mountain delivered a whopping 60 cents after adjustments. Plus the company reiterated its full-year guidance so shorts hoping that the end is near, may have to wait longer.
The Dow took a breather with no components reporting yesterday, but will be right back at it with Merck (NYSE: MRK) reporting tomorrow. The pharma giants are all dealing with the patent cliff, on a GAAP basis Eli Lilly saw income get cut by a quarter and Pfizer saw it get slashed in half. Estimates are for 0.95 cents per share, up both sequentially and year over year. Shares of Merck are up about 20% since its last earnings report, when it surprised to the upside and raised guidance, and investors will be keen on whether the company can maintain momentum through 2012, with Singulair coming off patent.
However, the most important thing to watch before trading will be unemployment data. This is a major economic indicator and will likely set the tone for the trading day.
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