Transcript for Dow Up 3.3 Percent In 2012
Dow futures were down this morning ahead of the bell joining me now to discuss all the business headlines this Friday as Alan steel from thestreet.com. Alex happy Friday to you happy Friday so going into today's trading the Dow is already up 3.3 percent for the year did you do you see this trend continuing. I think it's going to be very choppy and he righted the open -- -- the NASDAQ actually go into the Green. We're hitting above some resistance levels right now in the S&P which means we might see traders take some money off the table or at least -- around that level. Also currently about 70%. Of New York Stock Exchange stocks are trading above their ten week moving average which means -- little overbought right now we're trending into that territory. But I do say that Credit Suisse actually upgraded its earnings estimates. For -- 2012. To about 97 dollars and fifty cents also said the S&P could target of 14100. But an -- in the near term so there are some sort of bullish indicators down the road that this school they've -- does have -- more momentum. And of course its earnings season right now in GE is out with earnings this morning how do and still consider that company have Bellwether for the entire economy. I mean maybe but not as much perhaps but they do have a lot of fingers lot of pots. I spoke to one portfolio manager who says that he thinks financials and industrials are gonna do well and that's actually pretty -- for GE the real issue for GE though is going to be European exposure at that they made about 39 cents a share that was slightly above analyst estimates. But revenue fell to 38 billion that was 8% fall I was mainly due to get it sold its stake in an NBC and networks it also had lower profits -- GE capital banking at home and business solutions. The negative. But how -- -- this isn't really did for later on in 2012. Energy infrastructure was up 19%. Transportation segment was up 43%. Aviation up 2%. What that means is that orders for big ticket items like planes are still rolling -- they have a record order backlog right out 200 billion dollars which means that demand from Europe is it necessary at least slowing as much as we thought they had big European -- there -- holding up. Act could be good news. -- Google also came out with its earnings yesterday Alex and they -- what's the problem. -- this is a gross quarter. I think the best -- it's got its threat they made nine dollars to be cents a share well below estimates. Revenue came in just over eight billion also well below estimates think it mostly on currency fluctuations -- the stronger dollar also was really about margins. -- so they had lots of mobile ads but those are cheaper so don't actually make a lot of money -- of those but the cost per click for at -- -- 8%. Analysts were actually expecting that to be up over 3%. So that was the really big issue I spoke to portfolio manager this morning said that that was hit that worrisome problem for him going forward. Part of it he -- was due to -- -- management in the ad business perhaps slowing -- down the road for 2012. But also -- more increased competition. From social media outlets so we saw over the holiday season you can -- -- Twitter you get a group on FaceBook have a -- sales at bear some maybe you don't need to pay -- lot of money to place -- on Google I mean that's who we might be seeing the beginning of a trend there. They did have a great -- season at quarterly sales surpassed ten billion for the first time at -- that was really great. But overall it was a -- brutal -- for Google. And that -- taking a beating rate -- told it's down 8% in the last few minutes of trading OK also reporting within the past 24 hours tech companies including Intel. Microsoft and IBM -- I was looking for headlines out of those what do we see. The standouts here first up IBM is really the bullish outlook for 2012. With the clincher here. They're expecting to make fourteen dollars 82 cents a share and in 2012 that's huge -- on target for prefer making twenty cents at twenty dollars a share I should say actually by 2015. Also the emerging market growth -- IBM is huge it accounted for 22%. Total annual revenue 7% of its growth in the fourth quarter that was really great. Moving to Intel got this really interesting because Intel lowering guidance last month that was basically due to the Thailand floods is -- -- that supply chain for the debts but the -- -- But Acer pat they -- to their own and lowered forecast which means -- -- issues. I -- to get out of the way here which means tech companies could -- kind of boost in the first quarter. Also adding that we got a downgrade from Intel this morning -- on margin growth. Which -- -- problem but a portfolio manager also spoke to said he cares more about revenues overall pretty -- stuck there for these companies. Of course we're also talking about Microsoft which built its fortune on PCs is now perceived as a as an -- company yeah absolutely simulate it -- -- PC with a big drag here revenue was down 6% for PCs. -- means consumers were not that great there. That's why revenue came in a little bit light earn about 78 cents a share detritus but it -- spin on it saying that. They're still -- a -- -- cycles old PCs are out there have to buy a whole new series of new PCs and again cited emerging them market growth. Facility is a little bit -- sent what was interesting is Intel again makes the chips has the guts. Said that its PC claim group which includes notebooks and -- -- desktop services grew 17%. So anything wonder what is actually Microsoft issue before they just servicing two ends of the market it but in the same sort of sub sector so -- I'm -- McGee tells -- -- that's an interesting story I know a lot quieter in Europe lately it seems that there wasn't and -- thing -- tell us about that whether it's. Worried about the heroes -- yeah absolutely hands down here's thing here's the deal. Greece is still negotiating with a European Union IMF and European central bank for -- next 130 billion Euro -- it really needs by march. The reason might need to I'm -- it has fourteen point five billion euros worth of debt maturing in need to have to shell out all that cats so really needs the money. Isn't here though it's working with private creditors private bond holders over what kind of haircut they're gonna tape. So basically we could -- private bond holders turning their existing bonds and new ones but there's going be -- lost between the two how much that loss is is what's up for debate we're looking at anywhere from 50% to 70%. It's a really big deal. The issue is that most of these private -- bond holders are actually bank's European banks so they take a big haircut they're losing a lot of money and where they gonna go to get the financing they're -- -- the European Central Bank is going to be keep pushing money into the system through banks. And that's where the real issue -- here for Greece is in its third day of negotiations with credit bond -- but we really -- a resolution to. -- Yesterday Alex we got. That 2000 Allen was the worst year on record for housing starts spasm when it came to single family homes. Today at ten we get existing home sales what -- we expect in this report. -- housing -- all the headline numbers always seemed to be back. When you look at them off the -- that's the difficulty here we're expecting sales to grind out for a half million last month that's up from November. But pretty here we're looking -- four point two million that that's a pretty weak -- six million new home -- in order to create healthy market exceeding existing home sales -- to create -- -- market. How ever wanna dig a little deeper for you and tell you where the bright spots are first of all initial jobless claims are now at the lowest level since the beginning of the crisis more people have more jobs. The Wells Fargo housing index which predicted the downturn in housing in 2006. Is now at its lowest level. That's really impressive it's so hot I think that's lowest level in nearly four years. Also we're seeing declining excess inventory to second lowest level since February 2007. So basically that means -- summoned up for a closer house. I kind of get knocked the market here Credit Suisse as estimates that now it's gonna take just over year to clean out excess supply that's much better than -- here is which was what Credit -- was normally expect. -- that that's exactly why understanding yesterday's -- for housing starts wasn't as bad as has received because there is all this excess inventory so in the end it could be at that thing. Yes I think as -- -- through the inventory and you get to have new sales come on Miami -- get that inventory that we -- a construction jobs at 6171000. Jobs last month we're also seeing new orders and backlogs at home builders told Brothers. There is hope they had been talking to a lot of portfolio managers and traders who think this is. The beginning of the turn it's called the trop and very -- Wall Street speak -- starts to turn up. It's science certainly doesn't have income of good news these days okay the -- -- -- looking at next. -- -- big big Big Apple reports on Tuesday really big deal here analysts seemed very confused as to what iPhone sales really will be -- in the fourth quarter. That's going to be a big deal out of Yahoo! is well what they're doing about their management shake up there and -- -- FO -- C fed rate decision coming out as well. I don't think we're gonna hear anything particular about more quantitative easing more bond purchases by the that. Economist I talked to are expecting that to happen say between may and June but we could hear some precursors to back. And we -- mean and and money here what -- -- -- on employment and inflation is well -- we'll give clues. I have isn't me yeah. At least eleven state long hard look at that average out first nine minutes of trading -- very flat market. We're gonna leave you -- -- -- have a great weekend Alex Sink the next.
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