STTG Market Recap January 30, 2014

Stocks continued a very volatile week, as we saw another bounce today off short term oversold levels.  The S&P 500 added 1.13% and the NASDAQ 1.77%.  Facebook’s large gain, which we discussed yesterday, helped lift many boats in the tech sector – Twitter and LinkedIn both had very large gains.    January will be a down month and some believe a bad start to the year bodes ill for the entire year but some analysis today noted: “In 12 of the 21 Januarys since 1960 in which stocks traded lower have seen the subsequent 11 months trade higher including four of the last five instances.”  In economics news:

The Commerce Department reported the U.S. economy expanded 3.2 percent in the fourth quarter, with consumer spending rising 3.3 percent.  Meanwhile, pending-home sales in December fell 8.7 percent in December.

In the indexes we had a PERFECT bounce off the lower trendline, literally to the point.  Again at some point buying blindly near this level will fail, but it has been an incredible tool for well over a year now.  Now we will see in the next few days if this bounce can hold.  If so, one has to assume we go to the top trendline at some point, as that has been the pattern.

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UnderArmour (UA) saw huge gains after the company reported profits for the quarter rose 28 percent to 59 cents a share beating estimates of 53 cents a share while revenue rose 35% from the previous year to $682.8 million, beating estimates of $505.86 million. Under Armour says the rise in revenue and profit was driven by strong sales of its ColdGear Infrared and fleece products.  The stock had been in a tight range for months, so today it was playing catch up to the rest of the market which saw a furious rally late in 2013.

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Google (GOOG) had a very busy day as it announced it sold its Motorola mobile phone business for $2.9B to Lenovo.  Then, after the close it posted earnings  which Wall Street is liking as it is up 4%.

Paid clicks on Google’s online ads jumped 31 percent during the typically busy holiday quarter, but the average cost per click that marketers paid the company slid 11 percent.  Motorola, which Google has agreed to sell to China’s top PC maker for $2.91 billion, saw operating losses of $384 million in the quarter, more than double the $152 million loss from a year earlier. Revenue in Google’s core Internet business totaled $15.7 billion in the last three months of the year, up 22 percent from the $12.91 billion in the year-ago period.

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Amazon.com (AMZN) had a strong day, up nearly 5% but is giving much of that back in after hours post earnings.

The world’s largest Internet retailer posted earnings of 51 cents a share on sales of $25.59 billion, versus expectations for 66 cents a share on sales of $26.06 billion. In addition, the company posted current-quarter sales guidance of between $18.2 billion and $19.9 billion, missing expectations for $19.67 billion.  The company said international sales gained just 13 percent, lower than Wall Street forecasts for around 14 percent to 15 percent.

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Chipotle Mexican Grill (CMG) is up some 12% in after hours to the $550s after reporting post close; same store sales are especially impressive.

Chipotle earned $79.6 million, or $2.53 per share, for the quarter. That’s a penny more than analysts expected. A year earlier, the company earned $61.4 million, or $1.95 per share.  Revenue rose to $844.1 million, topping the $826.5 million Wall Street expected.  Sales rose 9.3 percent at locations open at least a year.

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