U.S. MARKET AVERAGES

Market climbs back and pares down losses of the day, especially in tech stocks.

Earnings from Aon (AOC: chart) and Met Life (MET: chart) pleased market but cautious guidance from Oracle and Pfizer kept broader averages under pressure till mid-day. Falling energy prices across all varieties of energy such as crude oil, gasoline, distillate and natural gas provided a much needed comfort to the traders that energy price induced inflation will finally be in check. Market turned on the back of falling prices of energy and tech stocks rebounded on the strength of Apple Computer (AAPL: chart) and Dell (DELL: chart) stocks. Apple registered 3.71% gain for the day.

Semiconductor stocks fell after Analogic Devices (ADI: chart) reported strong rise in earnings but failed to meet market estimate. The stock fell 1.8%. However, near close semis rallied as Intel and Advanced Micro Devices rose by a fraction.

With the decline in oil precious metals fell too. Gold and silver fell during the day.

General Motors (GM: chart) fell 27 cents for the day and closed below $21 and fell for the tenth day in a row. AIG (AIG: chart) rose for the second day in a row on the news of the settlements with SEC and New York.


MOVERS AND SHAKERS

Pfizer Inc (PFE: chart), drug company, projected earnings of $1.52 to $1.56 a share for 2006, and adjusted earnings, excluding special items of about $2 a share. The Dow component anticipates revenue for 2006 will be comparable to its 2005 total of $51.3 billion. The current average estimate of analysts is for a profit of $2.04 a share for 2006 on revenue of $51.58 billion. The company’s shares fell 3.3%.

Atari Inc (ATAR: chart), video game company, reported Q3 net loss of $4.76 million, or 4 cents a share vs. net earnings of $19.6 million, or 16 cents a share a year ago, missing estimates of 17 cents a share. Revenue fell 36% to $100.8 million from $156.4 million last year. The stock dropped 19%.

Phelps Dodge (PD: chart) dropped 5% after it was downgraded at Prudential Equity Group to neutral weight from overweight.

Cisco Systems (CSCO: chart), networking company, plans to sell $5.5 billion of senior unsecured notes, the proceeds of which the company will use to fund its proposed acquisition of Scientific-Atlanta and other general corporate purposes. Cisco’s share gained 1%.

Aon Corp (AON: chart), insurance company, posted Q4 net income of $224 million, or 65 cents a share, compared with $81 million, or 24 cents a share last year. Quarterly revenue was $2.53 billion, compared with $2.6 billion last year, missing expectations of $2.61 billion. The company expects cumulative pretax charges of $262 million in connection with its previously announced 3-year restructuring plan. The stock rose 7.3%.

ECONOMIC NEWS

Friday morning, the Department of Commerce released its report on the U.S. trade deficit in the month of December. The report showed that the trade deficit widened more than economists had been expecting and reached a record high for the full year.

The Commerce Dept. said that the trade deficit widened to $65.7 billion in December from an upwardly revised $64.7 billion in November. Economists had been expecting the deficit to widen to $65.0 billion from the $64.2 billion originally reported for the previous month.

The wider trade deficit came as the value of both imports and exports increased in December. The report showed that imports rose 1.9 percent to $177.2 billion while exports rose 2.1 percent to $111.5 billion.

With the increase in December, the trade deficit for 2005 reached an all-time high of $725.8 billion, up 17.5 percent from the previous record of $617.6 billion set in 2004. The increase came as a 12.9 percent increase in imports outpaced a 5.7 percent increase in exports.

The Commerce Dept. noted that the trade deficit as a percentage of U.S. gross domestic product rose to 5.8 percent in 2005 from 5.3 percent in 2004.

INTERNATIONAL MARKETS NEWS