Are Investors Confusing GE With American Express?

Based on the latest earnings reports, investors should have bought GE and sold American Express, although the opposite happened.
 
Stocks finished Friday’s trading session with mixed results as investors seemed mixed-up about which stocks to buy and which stocks to sell. General Electric’s earnings report beat analysts’ estimates because the company’s revenue was $180 million higher than expected (GE). Despite the good news, GE shares sank 2.28 percent to $26.58. Meanwhile, American Express (AXP) reported earnings which were a penny short of estimates and the stock skyrocketed 3.63 percent. At least the people who accidently bought stock in Nestor (NEST) on Tuesday had an excuse because the name was similar to that of Nest Labs, the company purchased by Google (GOOG).
 
The Dow Jones Industrial Average (DIA) picked up 41 points to finish Friday’s trading session at 16,458 for a 0.25 percent advance. The S&P 500 (SPY) fell 0.39 percent to close at 1,838.
 
The Nasdaq 100 (QQQ) dropped 0.55 percent to finish at 3,591. The Russell 2000 (IWM) declined 0.40 percent to end the day at 1,168.
 
In other major markets, oil (USO) advanced 0.12 percent to close at $33.69.
 
On London’s ICE Futures Europe Exchange, March futures for Brent crude oil advanced 57 cents (0.54 percent) to $106.32/bbl. (BNO).
 
February gold futures advanced $13.30 (1.07 percent) to $1,253.50 per ounce (GLD).
 
Transports stalled out on Friday, as the Dow Jones Transportation Average declined 0.39 percent (IYT).
 
In Japan, ongoing stock market sluggishness through January motivated a good deal of profit-taking on Friday, sending stock prices slightly lower. The exchange rate for the yen remained near 104.24 per dollar during Friday’s trading session in Tokyo. Investors have been counting on yen weakness because a weaker yen causes Japanese exports to be more competitively priced in foreign markets (FXY). The Nikkei 225 Stock Average declined 0.08 percent to 15,734 (EWJ).
 
Stocks sank in mainland China as investors demonstrated risk aversion ahead of Monday’s release of quarterly and annual GDP data from the National Bureau of Statistics. Most economists expect that the nation’s 2013 GDP will remain at a 7.7 percent rate of annual expansion – unchanged from 2012. Such a reading would be taken as bad news because it would confirm a deceleration in the growth of China’s economy. Many economists are expecting to see a slowdown to 7.6 percent. China’s GDP is expected to expand by only 7.5 percent during 2014. The Shanghai Composite Index fell 0.93 percent to 2,004 (FXI). Hong Kong’s Hang Seng Index advanced 0.64 percent to 23,133 (EWH).
 
In Europe, stocks made a modest advance as stocks from the mining sector soared in excess of one percent. The Euro STOXX 50 Index advanced 0.12 percent to 3,154 on Friday – climbing further above its 50-day moving average of 3,051. Its Relative Strength Index is 63.79 (FEZ).
 
Technical indicators revealed that the S&P 500 remained above its 50-day moving average of 1,807 after declining 0.39 percent to finish Friday’s trading session at 1,838. Its Relative Strength Index fell from 60.34 to 56.49. The MACD is now on a downward trajectory, just below the signal line, which would suggest that the S&P could continue its decline during the immediate future.
 
On Friday, all nine sectors declined. The consumer staples sector took the hardest hit, falling 0.78 percent.
 
Consumer Discretionary (XLY):  -0.44%
 
Technology:  (XLK):  -0.56%
 
Industrials (XLI):  -0.50%
 
Materials: (XLB):  -0.24%
 
Energy (XLE):  -0.16%
 
Financials: (XLF):  -0.32%
 
Utilities (XLU):  -0.03%
 
Health Care: (XLV):  -0.11%
 
Consumer Staples (XLP):  -0.78%
 
Bottom line:  Friday’s stock market activity brought mixed results as the Dow Jones Industrial Average advanced, while the other major stock indices declined.   
 
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