USA – Oil prices and geopolitical concerns continued to perform their tug-o-war on stock prices this month. At the end of the trading session on 13th February 2015, however, oil prices halted their swoon and as a result markets stabilized, with the S&P 500 closing at a record, and the NASDAQ at a 15-year high.
The Commerce Department said that the economy grew at a rate of 2.6% in the final quarter of the year, bogged down as it was by weak business investment, and trade and government purchasing. This figure was down on the 5% rate attained in the previous quarter. The department also reported that builders had begun construction on over 1 million new homes and apartments in 2014, which represented an 8.8% rise on 2013, and the first time that construction has hit the one million mark since the height of the housing boom in 2005.
Single-family housing starts jumped by 7.2% in December, to match the highest pace since March 2008. The University of Michigan’s consumer sentiment index fell to 93.6 in early February, from a 98.1 in January; surprising, since no change was expected. Despite this setback, the reading was the second highest since January 2007.
“The economic data is coming in OK, and when you delve into the big picture of the earnings reports, they’re not bad,” declared Robert Pavlik, chief investment strategist at Boston Private Wealth. “People want to be in the market when it starts to go back up.”
The HVACR Business Stock Index enjoyed a strong month, and raced ahead by 93.17 points, or 7.52%, to set a record at its closing of 1331.90. Advancing issues easily outweighed declining issues on a 29-to-4 count.
Rockwell Automation jumped by 13.10 points, or 12.50%. Profits rose by 8 percent, and ROK reported a net income of $214.2 million from continuing operations, equivalent to $1.56 per share, compared to $198.1 million, or $1.56 per share over the same quarter last year.
Taking into account one-time items, Rockwell earned $1.64 per share. Revenue was down 1 percent, to $1.57. ROK’s profit was stimulated by a 4.4% drop in cost of sales. Rockwell closed the session at 117.90, and was the top dollar gainer.
Echelon fell by 0.26 points, or 18.31%. ELON posted a loss of $2.6 million, representing $0.06 per share, against a loss of $4 million, or $0.09 per share last year. Revenue was $9.6 million, down from $12.5 million one year ago.
Credit Suisse analysts continued to maintain their “neutral” rating on ELON, but lowered their price target to $2.50, from $3. ELON ended the session at 1.16, which made ELON the top percentage loser.
Manitowoc gained 4.17 points, or 23.57%, this is despite falling short of their fourth quarter forecasts. MTW earned net income of $33.6 million, equivalent to $0.25 per share, compared to net income of $20.9 million, or $0.15 per share in 2014. Their revenue amounted to $1.04 billion. Adjusting for one-time items, Manitowoc earned $0.27 per share; while analysts polled by Zacks had expected to see earnings of $0.33 per share and revenue of $1.07 billion.
MTW said it plans to spin off its food service arm from its crane business – a move pushed by the activist investor Carl Icahn. The company’s board has approved the spin-off and it is expected to be completed in the first quarter of 2016. MTW closed the session at 21.86, and thus was the top percentage gainer.