More than anything else, consumers drive the U.S. economy. So when the Conference Board announced this morning that its Consumer Confidence Index dropped to lows not seen since late 2011, many investors likely feared that it could spell further declines for a stock market that has been hitting successive five-year highs for a while now. Yet despite the impact of higher payroll taxes amid stagnant wage growth, the upticks in housing and durable-goods sales that we've seen lately suggest that consumers' worries aren't keeping them from spending. Accordingly, the Dow Jones Industrials (^DJI -1.21%) managed to hold on to their early gains and are up about 35 points as of 10:45 a.m. EST.
Pfizer (PFE -3.41%) was the big winner among Dow stocks, rising 2.7% after beating earnings estimates. The sale of its nutrition business to Nestle generated a big one-time gain, but even excluding the impact of the sale, Pfizer topped analysts' guesses by $0.03 per share. Despite falling revenue owing to generic competition against its blockbuster Lipitor drug, Pfizer managed to bring in $15.1 billion in sales, well above the $14.35 billion that had been expected. Now, Pfizer's focus will turn to bringing new drugs like clotting medication Eliquis to market, as well as its Zoetis animal-health IPO.
Also moving higher was Hess (HES 1.25%), which soared 9.8%, adding to yesterday's 6% gain. Yesterday's news involved Hess selling off its network of oil storage terminals and getting out of oil-refining. But today, hedge fund Elliott Management said it was considering nominating board members to discuss spinning off Hess's Bakken assets and selling off its retail gas station network as well. Elliott said it believes the value of the broken-up company could be double where the shares closed yesterday.
Finally, Peabody Energy (BTU) climbed 5.8% despite reporting a loss of more than $1 billion in its fourth-quarter results. The beleaguered coal company has suffered from low prices for a long time, but guidance from Peabody suggests that it sees signs of recovering coal prices, which could help it reverse revenue declines and turn losses into profits. Still, Peabody expects adjusted losses through the current quarter as well, suggesting that any turnaround could be slow in coming.
