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Dow lower on Greek bailout doubts, Hewlett-Packard in focus

22nd Feb 2012, 2:57 pm by Joyanta Acharjee
Dow lower on Greek bailout doubts, Hewlett-Packard in focus

US equity markets were lower Wednesday afternoon amid doubts over the latest bailout for Greece and concerns about global economic growth.

As at 2.23pm EDT, the Dow Jones Industrial Average was lately off 8.36 points at 12,957.33, the S&P 500 fell 1.82 points, or 0.1%, to 1,360.39 and the NASDAQ declined 7.63 points, or 0.3%, to 2,940.94.

Early Wednesday, an index of business activity in the eurozone contracted in January, which followed data on China manufacturing that showed a slow pace of growth.

In addition, Fitch ratings agency downgraded Greece further into junk status, from "CCC" to "C" following the release of details on the struggling country's debt swap deal with private creditors, which will see 107 billion euros of Greece's debt written off.

Fitch said the downgrade indicates "that default is highly likely in the near term".

In the meantime, investors remain cautious about the latest bailout for Greece, which euro-zone finance ministers approved yesterday
after weeks of negotiations. Analysts fear that though the funds will provide neccessary support to make a bond payment in March, the country will eventually need further funds.

In corporate news, Dell (NASDAQ:DELL) reported results that missed analyst expectations after the bell Tuesday.

For the quarter that ended February 3, the company saw a profit of $764 million, or 43 cents per share, compared with a profit of $927 million or 48 cents a share a year earlier.

Revenue was $16.03 billion, up from $15.69 billion. Adjusted income was 51 cents per share. Analysts were expecting a profit of 52
cents per share on revenue of $15.97 billion, according to FactSet Research.

For the current quarter, the company said it expects revenue to drop about 7 percent sequentially, which translates to a sales forecast of $14.91 billion. Analysts were expecting revenue of $15.09 billion, according to data from FactSet Research. Shares of Dell fell more than 6%.

Rival Hewlett-Packard (NYSE:HPQ) is due to report after the closing bell today, and is expected to report earnings of 86 cents per share, down from $1.36 per share a year ago.

Speciality retailer Chico's FAS (NYSE:CHS) saw its shares jump more than 17% Wednesday after announcing fourth quarter results that well beat estimates, with profits rising 25 percent year-over-year.

For the three months that ended January 28, the women's apparel and accessories retailer said net income was $25.1 million, or 15 cents per diluted share, compared to a year-prior profit of $20.7 million, or 12 cents per diluted share. Analysts, on average, were expecting the company to earn 11 cents a share, according to Thomson Reuters.

Apple (NASDAQ:AAPL) was also in focus Wednesday, as the iPad maker is involved in a courtroom battle with Chinese company Proview International, which claims Apple does not own rights to the iPad trademark in China.

Meanwhile, Netflix's (NASDAQ:NFLX) fell more than 5% after Comcast (NASDAQ:CMCSA) said that it is working on a new subscription video-on-demand competitor, named "Streampix."

On the economic front, existing-home sales rose 4.3% in January to a seasonally adjusted annual rate of 4.57 million, according to the National Association of Realtors. Economists were expecting a sales rate of 4.5 million.

National chain store sales rose 1.4% in the first three weeks of February from January, according to Redbook Research's latest indicator, released Wednesday.

The index's rise compared with a targeted 1.5% gain.

The Johnson Redbook Index also showed seasonally adjusted sales for the period were up 2.7% from last year, compared with a 2.8% targeted gain.

Commodities

In NYMEX futures trading, crude for April delivery slipped 30 cents to $105.90 a barrel while gold futures for April delivery rose $9.80 to $1,768.30 an ounce.

Europe

European markets finished lower today with shares in Germany leading the region. The DAX was down 0.93% while France's CAC 40 was
off 0.52% and Britain's FTSE 100 fell lower by 0.20%.

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