Total Investor

US Equities advanced, with the Dow Jones Industrial Average closing within 156 points of reaching a new high since

the commencement of the bull market almost 3 years ago. Trading volumes rebounded to the highest level of the year

thus far as market participants repositioned on supportive earnings and encouraging news on the economic front. The

Dollar declined against the Aussie and Yen, but rallied versus the Euro as Greek officials and creditors entered a third

deal of negotiations on a debt swap deal. Orange Juice futures hit a record on supply worries.

European Equities declined with the Stoxx Europe 600 falling from a 5-month high on profit taking. The benchmark

has still advanced 4.6 percent this year, marking its best yearly start since in 15 years. Greek 2-Year Yields fluctuated

near record levels at 180 percent as creditors and the Government reportedly reached an in initial agreement for a

voluntary debt swap. Financials – Barclays (222.65p, +0.6%), Crédit Agricole ( 4.96, +2.5%), Credit Suisse

(CHF 24.25, +1.5%), Société Générale ( 21.00, 4.5%) – rallied as overnight funding rates narrowed.

Treasuries fell in early European trading, with bulls briefly attempting upside, but quickly running out of steam.

The overbought nature of the complex helped push the curve past resistance levels as the 10-Year moved above

2.00% while the 30-Year broke through 3.05%. There was little reaction to housing figures that only slightly missed

estimates

IBM ($188.52, +4.4%) rallied, adding 60.5 points to the INDU after the tech bellwether said fourth-quarter profits

rose 4.4 percent due to rising software demand, while also providing guidance ahead of estimates. Microsoft

($29.71, +5.7%) also pleased the market with $6.62 billion in earnings, which was ahead of analysts’ expectations on

higher Xbox sales. Intel ($26.38, +2.9%) also posted profits and guidance that beat consensus. Google

($585.99, -8.4%), however, dropped on its results.

Major Banks – Bank of America ($7.07, +1.6%), Citi ($29.64, +1.1%), JPMorgan Chase ($37.36, +1.2%), Wells Fargo

($30.54, +1.3%) – all were well bid, extending recent upside. GE ($19.15, unch) reported profits ahead of forecast, but

revenues below. Metals & Miners – Alcoa ($10.17, -0.1%), Cliffs ($71.50, -0.7%), Freeport ($43.10, -2.9%) – fell.

US Equities held onto gains as the IMF announced its intention to raise US$500 billion to insulate the world economy from Europe’s debt crisis. Europe dominated the news as Germany cut its 2012 growth forecast and Britain’s unemployment rate rose to 8.4%, the highest since 1995. Greek creditors became more confident of reaching a deal.

European Equities closed little changed. Financials – BNP Paribas ( 32.06, -1.32%), Deutsche Bank ( 29.95, +0.27%), Unicredit ( 2.98, – 1.20%) – fluctuated around the market. Societe Generale ( 4.58, +6.02%) and Credit Agricole ( 4.38, +4.03%) were top movers after reports the French regulator would tell banks to raise write downs on Greek debt to 70% to 75%.

Treasuries came down as thirty-year yields rose the most in two days as Greece returned to talks with creditors, after talks broke down last week over the interest rate offered on new bonds. Germany sold twoyear notes at a record-low yield while Portuguese yields fell on the country’s biggest debt sale since its bailout last year.

Banks were winners with JPMorgan Chase ($36.54, +4.67%) and Bank of America ($6.80, +4.94%) both up. Goldman Sachs ($104.31, +6.79%) was another performer after it posted quarterly earnings that beat expectations, nonetheless revenue fell by 58% as investment banking revenue declined. US Bancorp ($29.08, +1.08%), edged up after the company said its net income increased 40% mainly from its core business. Other Commercial Banks – Citi ($29.03, +2.89%), Wells Fargo ($30.24, +1.39%) – mostly went with the market.

Yahoo rallied ($15.92, +3.18%) after cofounder and former CEO, Jerry Yang, left the company, as part of a reported broader boardroom shake-up. Ebay ($30.34, -0.62%) was down and will post earnings after the market closes. TransCanada ($41.41, -0.79%) fell on news that the US government would reject the Keystone XL oil pipeline.

US Equities climbed up after positive GDP results from China, forecast beating consumer sentiment in Germany, and successful bond auctions in Europe. A New York manufacturing survey also exceeded expectations, adding to the optimism that gripped Australia the day before.

European Equities closed higher, the pack predictably led by carmakers and miners, who had the most to gain from increases in demand. Financials – BNP Paribas ( 32.49, +0.57%), Deutsche Bank ( 29.87, +2.22%), Unicredit ( 3.01, +2.80%) – all performed well. Royal Bank of Scotland (2,485p, +1.76%) was up after it said it would sell its aircraft leasing business to Sumitomo Mitsui Financial Group.

Treasuries rose pushing yields down as the US began four consecutive days of purchasing debt without any new issuance for the first time since June. The push also came on the back of rising Italian and Spanish bonds as successful auctions from the prior two, Greece, and Belgium, eased sovereign default concerns. German bunds also dropped after the ZEW consumer confidence survey beat expectations.

Banks lagged the market as Citigroup ($28.25, -8.10%) slid after its quarterly earnings fell by 11% and missed expectations. Wells Fargo ($29.81, +0.68%) rose after it reported a 20% increase in fourth quarter profit, beating expectations by a mere penny. Kraft Foods ($38.13, +0.95%) said it plans to cut 1,600 positions as it works toward splitting into two separate North-American grocery and worldwide snack businesses.

Materials fluctuated as Major Miners – Alcoa ($9.76, -0.41%), Peabody ($35.30, -1.07%), United States Steel ($27.33, -0.36%) – all took hits. Newmont (60.94, -3.86%) declined on its guidance of lower copper production and higher costs in 2012. Freeport ($43.05, +2,50%) tracked the market thanks to Dr Copper. Energy and health care were the standouts of the day.

US Equities dipped, ending a four-session advance after speculation circled the market that Standard & Poor’s would downgrade European government credit ratings, offsetting more improved data on the health of the economy. After the closing bell, the rating agency France lost its AAA rating, while eight other states were also downgraded. Hence, the Euro fell within reach of making a new 16-month low against the  Dollar, sending February Gold modestly lower to $1630/oz. Volume improved, but was still below average. Participants will begin returning this week.

European Equities mostly fell given the speculation that S&P would cut regional credit ratings as several press reports suggested France would loose its AAA rating. Hence, French Bonds dipped sharply, with 10-Year Yields climbing as much as 13 basis points from session lows. Financials – Barclays (201.20p, +4.0%), BNP Paribas ( 31.79, +2.5%), Deutsche Bank (28.95, +1.5%), Unicredit ( 2.92, +0.5%) – were still bid as the EURIBOR OIS spread narrowed 2 basis points to a 3-month low. BHP Billiton (2045p, -0.5%) & Rio Tinto (3561p, +0.4%) fluctuated.

Treasuries pushed into positive territory in Europe as Italian auctions failed to live up to the strength of Thursday’s Spanish sale. Another push higher came after the trade deficit worsened, although the real bullish impetus came when rumours began circulating that Eurozone downgrades were imminent. The 10-30 Year sectors led the advance.

JPMorgan Chase ($35.92, -2.5%) declined after its quarterly earnings fell by 23 percent on lower investment-banking fess and revenue from trading stocks and bonds. Jamie Dimon said the investment-banking business is ‘naturally volatile’ and would eventually bounce back. For the year, the company’s net income rose to a record $19 billion. Fellow Commercial Banks – Bank of America ($6.61, -2.7%), Citi ($30.74, – 2.7%), Wells Fargo ($29.61, unch) – mostly fell ahead of their results.

Materials turned south as Metals & Miners – Alcoa ($9.80, -1.3%), Cliffs Resources ($70.25, -1.6%), Freeport ($42.00, -1.1%), Newmont ($63.39, -1.0%) – tracked commodity prices lower. Patriot Coal ($7.87, -12.7%) tipped as the coal miner said it will idle production on reduced demand. Chevron ($106.09, +1.1%) and Exxon 84.88, +0.2%) climbed.

US stocks dropped after three days of sharp gains as Warren Buffett’s $5 billion investment in Bank of America failed to stoke investors’ appetite for risk ahead of Federal Reserve Chairman Ben Bernanke’s speech on Friday.

The Dow Jones Industrial Average dropped 170.89 points, or 1.51%, to 11149.82, in a broad decline. All but two of the Dow components dropped. Bank of America bucked the trend, rising 66 cents, or 9.4%, to $7.65 after Buffett’s disclosure, although at one point it gained as much as 26%.

The Standard & Poor’s 500-stock index lost 18.33 points, or 1.56%, to 1159.27. All 10 of the S&P 500′s sectors finished in the red, led lower by energy and consumer discretionary stocks.

The Nasdaq Composite fell 48.06 points, or 1.95%, to 2419.63, as the resignation of Apple Chief Executive Steve Jobs weighed on the technology sector.

Shares of Apple fell $2.46, or 0.7%, to $373.72 after Jobs said he was resigning as CEO. The stock dropped as much as 3% before paring losses.

Stocks opened higher, with the Dow rising as much as 86 points. But the market quickly lost its early gains and turned sharply lower following big declines in European equities.

Investors also worried about the condition of Harrisburg, Pa. The financially strapped state capital will likely miss a bond payment next month if a deal to secure a US$7.5 million loan falls through, a spokesman for the mayor said.

Copper closed above $9,000 a metric tonne for the first time in almost three weeks on the London Metal Exchange as the complex moved higher amid tentative economic confidence and thin trading conditions.

Gold snapped its two-day sell-off, rising as traders viewed the market’s steep declines as an opportunity to buy and as falling equities markets renewed investor demand for refuge assets.

Oil prices settled modestly higher, pulled up by gasoline futures, which soared 3.1% on fears that Hurricane Irene could disrupt supplies along the East Coast.

Australian Stock Prices Overnight

In New York, News Corp fell by US$0.30 to US$16.71, equivalent to A$16.03, A$0.21 below its last close on the ASX.

ResMed fell by US$0.70 to US$29.00, equivalent to A$2.78, A$0.02 below its last close on the ASX.

In London, Rio Tinto fell 5.5 pence to £35.00, A$0.09 lower in Australian currency terms.

BHP-Billiton rose 11.5 pence to £19.44, A$0.18 higher in Australian currency terms.

Henderson Group Plc rose 1.9 pence to £1.27, A$0.03 higher in Australian currency terms.