U.S. MARKET AVERAGES

Near unchanged –closing averages defy the underlying volatility in the stock market especially in tech stocks.

Of the thirty stocks in Dow Jones Industrial Average, nine gained more than 1%, eight lost better than 1% and rest were near unchanged, all in a day when weekly energy report and December month housing reports led the market talk.

A slow cooling in the housing market was indicated by the National Association Realtor December report on existing home sales. December sales declined 5.7% but for the year 2005 sales rose 4.2% and median home price rose 12% in the year. Housing stocks took a dive despite better than expected earnings from Centex (CTX: chart). KB Homes, Centex, Toll Bros. and Lennar declined between 1% and 2%.

Weekly energy report released today suggested that crude oil inventory of crude oil declined and that of distillate and gasoline rose. However, crude oil still declined close to 2% on top of yesterday’s 1.5% decline.

It appears that Boston Scientific (BSX: chart) has won merger deal with Guidant (GDT: chart) after bidding for it at $27 billion. Johnson & Johnson (JNJ: chart) stock rose on the news.

In overseas markets Brazil added 1.5% gain on top of yesterday’s close to 2% gain and India added 1.3% gain and main index in Germany rose 2%.

MOVERS AND SHAKERS

Netflix (NFLX: chart), online DVD-rental firm, announced Q4 profit six times higher than a year ago on increased subscriber revenue. The company said that it earned $38.1 million, or 57 cents a share, compared with a profit of $5.6 million or 9 cents a share in the year-ago period. On a pro forma basis, Netflix said it earned $41.4 million, or 62 cents a share. Revenue rose 36% to $195 million from $144 million. Subscribers rose 60% from the year-ago period to 4.2 million. The stock jumped 15.3%.

Afilliated Managers Group (AMG: chart) reported Q4 net income rose 67% to $38.8 million, or 90 cents a share from $23.3 million, or 58 cents a share in the year-ago period. Revenue climbed 48% to $272.5 million. Cash earnings were $1.42 a share, up from $1.08 a share. A survey of analysts by Thomson First Call forecast earnings of $1.29 a share and revenue of $256.8 million. The company’s shares rose 6.1%.

CNF (CNF: chart), trucking company, reported Q4 earnings and Q1 outlook fell short of expectations. The company said that it earned $51.2 million, or 92 cents a share, up from $32.2 million, or 58 cents a share a year ago. Excluding discontinued operations, earnings would have been 97 cents a share, missing the average analyst estimate of $1. Revenue rose to $1.09 billion from $967.5 million. For the first quarter, the company expects ongoing earnings of 71 to 77 cents a share, below analyst forecasts of 79 cents. The stock was downgraded to equal weight from overweight. Company’s shares dropped 11.8%.

ECONOMIC NEWS

Crude oil inventories showed a decline in the latest week, according to government statistics released Wednesday. Stocks of gasoline and distillate fuel oil advanced during the period.

The Department of Energy''s Energy Information Administration revealed that crude oil inventories dropped by 2.3 million barrels for the week ended January 20, falling to 319.1 million barrels from the prior week''s level of 321.4 million barrels. Oil inventories were 11% higher than their levels of the same time last year.

Gasoline inventories posted a week-over-week increase of 3.2 million barrels. Gasoline stocks were just 1.6% below their levels of last year. Inventories of distillate fuel oil rose by 1.8 million barrels in the most recent week.

The National Association of Realtors released its report on existing home sales in the month of December on Wednesday, showing a much bigger than expected decrease. NAR noted that existing home sales still hit a new record for the full year.

The report showed that existing home sales fell 5.7 percent to a seasonally adjusted annual rate of 6.60 million units in December from an upwardly revised rate of 7.00 million units in November. Economists had expected existing home sales to fall to a 6.90 million unit rate.

Despite the decrease in December, existing home sales for all of 2005 came in at 7.072 million, up 4.2 percent from 6.784 million in 2004. With the increase, existing home sales reached their fifth consecutive annual record.

The report also showed that total housing inventory levels fell 4.4 percent in December to 2.80 million existing homes available for sale. NAR said that this represents a 5.1-month supply at the current sales pace.

INTERNATIONAL MARKETS NEWS