Look to Large Cap Tech For Ideas In a Continued Slide

Stocks faded as the day wore on, showing that despite Friday’s big reversal, the sentiment is still on the bearish side. The S&P is now -8.1% off its high, nearing closer to the top end of the -10% to -15% correction we previous called for. If the dip continues, we believe big-cap tech is a good place to start looking for new ideas.

The Toys and Game Stocks Index was the top performing tickerspy Index on the day, led by Hasbro (HAS) with a 13% gain.

Stocks fell on the day, with the Dow off -104 points to 9,908. The S&P fell -9 points to 1,057, while the Nasdaq dropped -15 points to 2,126. Oil rose 50 cents to $71.69 a barrel, while gold jumped $13.20 to $1,066.00 an ounce.

In earnings news, drug store operator CVS Caremark (CVS) posted a Q4 profit of $1.05 billion, or 74 cents per share, up 11% from $949 million, or 65 cents per share, last year. Adjusted EPS climbed to 79 cents from 70 cents. Revenue rose 7% to $25.8 billion, as same-store sales grew 4.9%. Analysts were looking for EPS of 78 cents on sales of $26.22 billion. For 2010, the company forecast adjusted EPS of between $2.74-$2.84 versus analyst estimates of $2.78. The stock rose 5.3%. Over 150 Pro investors counted the stock among their top-15 holdings at the start of Q4, while 431 tickerspy members included the stock in their portfolios.

Nasdaq OMX Group (NDAQ) saw its Q4 profit rise 23% to $43 million, or 20 cents a share, up from $35 million, or 17 cents, a year ago. Adjusted EPS fell to 46 cents for 52 cents, besting analyst estimates by a penny. Revenue fell -8% to $369 million, just ahead of the $365 million consensus. The stock market exchange said its share of U.S. equities fell to 24% from 29%, while its options share rose to 22% from 19%. The stock fell -4.0%.

Shares of Hasbro jumped 12.3% after the toymaker’s Q4 earnings easily surpassed analyst estimates. For the quarter ended December 27th, the company recorded net income of $165.6 million, or $1.09 per share, up 77% from $93.6 million, or 62 cents per share, a year earlier. Sales jumped 12% to $1.38 billion. The Wall Street consensus was for EPS of 81 cents on revenue of $1.34 billion. Looking forward, the company said it expects revenue and EPS to rise over 2009 levels despite a light year of movie tie-ins.

Conglomerate Loews (L) reported Q4 income from continuing operations of $403 million, or 94 cents a share, versus a year-ago loss of -$958 million, or -$2.20 a share. Excluding investment gains, adjusted EPS was 83 cents, below the 95-cent consensus. Revenue rose 39% to $3.82 billion. The stock fell -1.7%. Thirty-three Pro investors counted the stock among their top-15 holdings at the start of Q4, while 146 tickerspy members

Tags: CVS, HAS, L, NDAQ