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Midday Market Update

Stocks Mixed After Data, Earnings

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U.S. Market
Stocks were mixed at midday as investors eyed housing data as well as earnings reports from blue-chip stocks before and after the bell Tuesday. 

Existing-home sales in the United States fell by 1%, seasonally adjusted, in December from November, countering the expected 2% increase in such sales. November sales also had a downward revision. Total sales for 2012 were 9.2% higher than in 2011, marking the best annual sales performance since 2007. However, the housing market still has room for improvement as the lending environment remains difficult and potential buyers and sellers remain cautious. 

Separately, the Federal Reserve Bank of Richmond's manufacturing index fell to a reading of negative 12 this month from January's positive reading of 5 in December. The subindexes all showed weakness as the negative overall reading indicates that activity is contracting. 

Meanwhile the Organization of Economic Cooperation and Development released a report today stating that aggregate employment in developed markets is still lower than it was before the financial collapse in 2008. 

At midday, the Dow was up 0.1%, while the Nasdaq had fallen by 0.3%. The S&P 500 was flat. 

Stocks on the Move
 Johnson & Johnson (JNJ) posted a large jump in fourth-quarter profit, which came in at $2.57 billion compared with $218 million reported the same time last year, though the latter reading included significant one-time charges. Minus the charges both this past quarter and the year-over-year quarter, earnings per share improved by 6 cents to $1.19. Revenue increased by 8% to $17.56 billion, slightly missing Wall Street estimates. The health-care firm's EPS forecast for 2013 is also lower than Street expectations. J&J's acquisition of Synthes augmented overall sales, and the company is focused on improving its consumer business in the coming year after product recalls in previous years.  Morningstar analysts also expect J&J return to stronger growth this year. Shares, however, were 0.8% lower at midday. 

 Verizon Communications (VZ) reported a loss of $4.23 billion for the fourth quarter, mainly as a result of steep charges related to debt, storm damage, and the firm's pension plan. This compares with a loss of $2.02 billion the same time last year. Revenue exceeded Street expectations, though adjusted EPS fell short. The company saw its best growth in new wireless contract customers during the quarter, but smartphone subsidies hindered overall results. Shares were up by 1% at midday. 

Capping off a comparatively weak year on the operational front,  Freeport-McMoRan Copper & Gold (FCX) reported slightly stronger-than-anticipated fourth-quarter results Tuesday. Copper volume and unit costs both came in better than management had anticipated, but nonetheless marked the weakest full-year figures since the 2007 acquisition of Phelps-Dodge.  Morningstar analysts continue to expect stronger results in 2013 and expect the firm's recent acquisitions to be value-accretive. Shares had jumped by nearly 5% at midday. 

Foreign Markets
The DAX fell by 0.7% Tuesday despite an improvement in German investor sentiment. The Paris CAC fell 0.6%, and the FTSE 100 was flat. 

Asian stocks were mixed, with the Shanghai Composite and the Nikkei 225 losing 0.6% and 0.4%, but the Hang Seng rising by 0.3%.

Kevin O'Shaughnessy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.