Stocks Discounted Ahead of Big Week For Bellwether Earnings (INTC, JPM, CRI, BARE, AEA)

Stocks took it on the chin today, which is a big disappointment after Intel (INTC) turned in just a fabulous quarter. JP Morgan’s (JPM) results were okay, but obviously it wasn’t a perfect report. Next week will bring more earnings reports from bellwethers, and it will be interesting to see how investors react to what likely will be some good reports.

The Credit Services Stocks Index was the top performing tickerspy Index on the day, led by Advance America, Cash Advance Centers (AEA) with a 2% gain.

Stocks fell on the day, with the Dow down -101 points to 10,610. The S&P lost -12 points to 1,136, while the Nasdaq erased -29 points to close at 2,288. Oil fell -$1.36 to $78.03 a barrel, while gold dipped -$12.00 to $1,131.00 an ounce.

On the economic front, the Labor Department reported that the consumer price index (CPI) rose 0.1% in December, while core CPI, which excludes food and energy, also rose 0.1%. Economists were expecting increases of 0.2% and 0.1%, respectively. Meanwhile, Reuters/University of Michigan Surveys of Consumers said its preliminary index of consumer sentiment for January was 72.8, up from 72.5 in December. Economists were expecting a reading of 73.9.

In earnings news, semiconductor giant Intel (INTC) announced Q4 net income of $2.3 billion, or 40 cents per share, a huge jump from $234 million, or 4 cents per share, a year ago. Intel paid $1.25 billion to settle antitrust charges in the quarter, while a year ago it took a $1.0 billion impairment charge. Revenue jumped 29% to $10.6 billion. The Wall Street consensus was for EPS of 30 cents on sales of $10.2 billion. Gross margins were a record 64.7%. Looking forward, the company guided for revenue of between $9.3-$10.1 billion and a gross margin of 59%-63% compared to analyst estimates of $9.3 billion and a gross margin of 59%. The stock, nonetheless, fell -3.2%. Over 300 Pro investors counted the stock among their top-15 holdings at the start of Q4, while over 2,000 tickerspy members included the stock in their portfolios.

JP Morgan (JPM) profits soared to $3.28 billion, or 74 cents a share, from only $702 million, or 6 cents per share, a year earlier. That easily topped analyst estimates of 61 cents. Total net revenue jumped 34% to $23.2 billion. Investors, however, weren’t impressed with the results, sending shares -2.3% lower. An increase to the reserve for future loan losses was one reason why. Over 500 Pro investors counted the stock among their top-15 holdings at the start of Q4, while over 1,500 tickerspy members included the stock in their portfolios.

Children’s apparel retailer Carter’s (CRI) reported a 53% surge in Q3 profits to $49.4 million, or 84 cents a share, up from $32.4 million, or 55 cents a share, a year ago. Sales jumped 11% to $481.5 million. Analysts were looking for EPS of 66 cents on revenue of $451.10 million. The company guided for Q4 profits of 56 cents, in line with estimates. Earnings had been delayed as the company had to restate results from the fist half of the year.

In M&A news, cosmetic maker Bare Escentuals (BARE) has agreed to be acquired by Japanese beauty company Shiseido in a $1.7 billion deal. Shiseido will pay $18.20 a share in cash, a 43% premium to Bare’s closing price on Thursday. The deal is expected to close by the end of Q1. The stock rose 41.8%.

Tags: AEA, BARE, CRI, INTC, JPM