U.S. MARKET AVERAGES

Finally market focused on earnings.

Nervous market was greeted with positive earnings surprises from more than 60% of total one hundred to companies reporting today. Notably market was content with earnings from AT&T, Verizon but surprised with reports from Caterpillar, Franklin Resources, Novellus, Honeywell, Lockheed Martin, Mckeeson, Becton Dickinson and others.

Market was anticipating quarterly and annual loss from General Motors (GM: chart), but the extent of loss surprised the market. GM reported loss of $8.45 for the fourth quarter and for the year 2005 reported a loss of $15.13 per share. For the year 2005 company reported a net loss of $8.6 billion and $4.8 billion in the fourth quarter. General Motors stock fell 80 cents or 3.4% to $23.05. Revenue for the year 2005 declined slightly to $192.6 billion on decline of 3% in unit volume.

Crude oil traded near $66 but concern regarding oil supply remained. Natural gas market in Europe turned nervous as supplies of gas from Russia dropped and Ukraine, Romania and Italy expressed their concerns to Russian gas company in Moscow.

Stocks of mutual funds companies including Franklin Resources (BEN: chart), T. Rowe Price (TROW: chart), Legg Mason (LM: chart) and Alliance Capital (AC: chart) on better than expected earnings from Franklin.

Defense stocks rallied for the second day as Lockheed Martin (LMT: chart) and General Dynamics (GD: chart) reported earnings. Lockheed lifted its guidance for the year 2006 and General Dynamics posted earnings gain of 21%.

Chipotle Mexican Grill priced 7.88 million shares at $22. McDonald’s, the parent, after IPO, will retain majority control in the fast growing and profitable Mexican casual fast food restaurant chain.


MOVERS AND SHAKERS

Estee Lauder Co (EL: chart) posted Q4 earnings drop of 40.9% to $81.7 million or 38 cents a share, citing charges. Net earnings from continuing operations grew 7.7% to $150.4 million or 70 cents a share. Revenue climbed 2.7% at $1.78 billion. Analysts expected earnings of 56 cents a share on revenue of $1.8 billion. The company projected revenue in 2006 to grow around 3% and earnings to be in the range of $1.61 to $1.68 a share. The stock gained 4.17%.

Hartmarx Corp. (HMX: chart) reported Q4 net earnings of $7.3 million or 20 cents a share, up from the prior year''s profit of $5.8 million, or 16 cents, exceeding estimates of 16 cents a share. Revenue rose to $156.8 million from $152.2 million. Operating earnings increased to $13.9 million from $11 million. Hartmarx projected 2006 earnings-per-share growth in a range of 12% to 20%. The company’s shares rose 8%.

Juniper Networks (JNPR: chart) posted 60% profit growth in Q4. The company earned $105.5 million, or 17 cents a share, compared to $66 million, or 11 cents a share, during the year-ago period. Excluding charges and one-time items, Juniper earned $119.6 million, or 20 cents a share, meeting estimates. Revenue rose 34% to $575.5 million, but below the $579 million expected by analysts. The company released a weaker-than-expected first-quarter forecast. The stock dropped 21%.

ECONOMIC NEWS

The Department of Labor released its report on initial jobless claims in the week ended January 21 on Thursday, showing that jobless claims rose much less than economists had been expecting.

The report showed that jobless claims rose to 283,000 from the previous week''s revised figure of 272,000. Economists had expected a more significant increase to about 305,000 from the 271,000 originally reported for the previous week.

The Labor Dept. also said that the less volatile 4-week moving average fell to 288,750 from the previous week''s revised average of 299,500. This marks the fourth consecutive decline for the 4-week moving average, which has fallen to its lowest level since July of 2000.

The report also showed that continuing claims rose to 2.581 million in the week ended January 14 from the preceding week''s revised level of 2.528 million.

Thursday morning, the Department of Commerce released its report on new orders for durable goods in the month of December. The report showed that orders for durable goods rose 1.3 percent in December following an upwardly revised increase of 5.4 percent in November. Economists had been expecting orders to increase by 1.5 percent compared to the 4.4 percent increase originally reported for November.

The increase in December was partly due to a significant increase in orders for machinery, which rose 6.5 percent in December after rising by 3.1 percent in November. Orders for transportation equipment also saw some further upside after moving sharply higher in the two previous months.

The report also showed that shipments of durable goods rose 3.5 percent in December, reaching the highest level since the series began. At the same time, inventories of durable goods increased only modestly after rising 0.6 percent in November.