Feb 9 2011

For the 7th day in a row the Dow

Jones Industrial Average ended in Dow 12,233.15 +71.52 +0.59%
a positive tone on Tuesday. The
S&P 500 1,324.57 +5.52 +0.42%
index settled up 0.59%, while the
tech-laden Nasdaq Composite Nasdaq 2,797.05 +13.06 +0.47%
finished at 2,797.05, 0.47%
higher. S&P 500 index added 5.52 points to end at 1,324.57.

The highlights of the day were the monetary policy tightening by China, Disney’s quarterly
report, and McDonald’s January sales report.

People’s Bank of China on Tuesday raised one-year lending rate to 6.06% from 5.81%. The
change will take effect immediately on Wednesday. One-year deposit rate was also hiked
from 2.75% to 3.0%. The move was aimed to cool down the inflationary pressure which could
derail the Chinese economy. Markets already anticipated the rate hike, even before the
Chinese New Year holiday last week. Consumer Price Index in China climbed to 5.1% in
November, but eased to 4.6% in December. Still, the PBOC seems to aim at inflation rate
below 4%.

Corporate News
 DIS soared during the after-hours session after it reported a strong
quarter which ended December 31st. Better ad revenues at its TV
networks and strong sales coming from “Toy Story 3” led to an
impressive 54% jump in earnings. During the quarter, DIS earned $1.33 billion or $0.68
per share. A year earlier, DIS earned a profit of $844 million or $0.44 per share.
Revenue increased from $9.74 billion to $10.7 billion. The market consensus was at $0.56
per share of net profit, while sales were expected at $10.5 billion. DIS’ ESPN saw a jump
in operating profit by 42%. Meanwhile, the movie and TV studios had their earnings
jumped 54% thanks to “Toy Story 3”. Theme parks and resorts contributed significantly to
DIS’ earnings as well as their income jumped 25% while earnings coming from consumer
product reached a 28% increase. DIS reached $42.80 during after-hours session, up
3.93% from the closing price in the regular session. Meanwhile, from Europe, Euro Disney
S.C.A. also reported a jump in Q1 revenue to 316.8 million euros from 292 million euros,
up 8.5% year-on-year. DIS was up 0.59% on Tuesday, adding to its already strong MTD
performance (5.94%). YTD, DIS has accumulated 5.94% gains.
 MCD was the star performer of the day. It reported strong sales in
January. For the month, same-store sales increased 5.3%. U.S. sales
were up 3.1%, thanks to McCafe’s beverages and its newly launched
Fruit & Maple Oatmeal, MCD’s new menu for breakfast. European
sales were also good, displaying 7% increase in Germany, UK, France
and Russia. In Asia-Pacific, Middle East and Africa, sales were up
5.2%, boosted by China, Japan, and Australia’s strong sales. In total, January’s sales were
up 7.4%. MCD recently modified its menu, slashing several of its product prices, extending
hours as well as offering new products. Labor costs which have declined, also contributed
 Feb 9 2011
positively to the company. Despite its 2.6% gains on Tuesday, MCD is still losing 1.82% in
2011 but the stock has recovered a bit as shown by its 2.29% rise in February alone.
 MMM’s board announced a rise in Q1 dividend to $0.55 per share, or up 5%. The board
also authorized $7 billion stock buyback program. The dividend will be paid on March
12th with record date of February 18th. MMM was up 0.77% on Tuesday, pushing its MTD
gains to 1.76%. YTD, the company has increased by 3.67%. MMM currently 11.63%
above its year-ago level.
 IBM and Samsung Electronics Co. will share their intellectual
property to boost their capacity to provide better products
and/or services while keeping their competitiveness in check.
IBM has been a solid performer this year, gaining 13.14%
since the start of the year.
 BA anticipates purchases of defense equipment by India. The deal was expected to worth
$31 billion over the next 10 years. Meanwhile, CDI Corp and BA engage in a three-year
agreement of which CDI-Aerospace will supply engineering services for BA. BA was up
1.08% on Tuesday, and currently tops the MTD chart with gains of 6.41%. YTD, BA has
accumulated 11.42% of gains, while compared to a year ago; the stock is now 15.12%
higher.
 DD was up 0.71% on Tuesday, maintaining its lead ahead of the other Dow components in
terms of one-year performance. DD gained 59.28% in terms of 12-month performance.
 KFT will release its Q4 results next Thursday, after the market closes. The market may
want to watch whether the company will increase its food prices again after price hikes in
the Q3. Due to strong commodity prices, KFT is seen to raise its prices yet again. Consensus
on net profit is at $0.46 per share with revenue at $13.33 billion. In the same quarter a
year earlier, KFT earned $710 million or $0.48 per share with revenue at $11 billion. KFT
ended with 0.84% gains on Tuesday, setting its MTD gains at 1.83%.
 KO and CSCO are set to announce their earnings on
Wednesday. KO will report before the market opens, while
CSCO will report after the market closes. KO is seen carving a
$0.72 per share net profit for Q4 2010, beating year-ago EPS
of $0.66 per share. CSCO however, is seen to see its net profit declining to $0.35 per
share from $0.40 per share. KO posted gains of 0.56% on Tuesday while CSCO fell
0.18%. Compared to their respective levels a year earlier, KO is currently 19.25% higher,
but CSCO is 9.62% lower.
 WMT was reported to be in talks with PT Matahari Putra Prima on hypermarts
developments. The retail giant was up 0.55% on Tuesday, sending its MTD gains to 0.55%
as well. YTD, WMT has gained 4.54%.
 Feb 9 2011
Stock focus: DIS
Walt Disney, Co.
Feb 8th MTD

↑ 0.59% ↑ 6.00% Walt Disney, Co.

YTD 12-Month
Resistances 41.33 41.51 42.33 43.61 45.67
↑ 9.78% ↑ 31.82% Supports 40.78 40.26 39.97 39.22 38.62
Last Outlook Positive
$41.18 Strategy Buy +/- $40.78, PT $45.67, risk < $38.62
 Feb 9 2011

Dow 30 - Feb 8th 2011

MCD 2.60% 1 IBM 0.75% 11 PG 0.14% 21
AXP 2.37% 2 DD 0.71% 12 CAT 0.14% 22
GE 1.96% 3 PFE 0.63% 13 JNJ 0.11% 23
HD 1.53% 4 DIS 0.59% 14 CVX 0.08% 24
TRV 1.22% 5 KO 0.56% 15 HPQ 0.00% 25
BA 1.08% 6 WMT 0.55% 16 T -0.18% 26
VZ 0.89% 7 JPM 0.53% 17 CSCO -0.18% 27
KFT 0.84% 8 AA 0.46% 18 INTC -0.23% 28
MRK 0.82% 9 MSFT 0.28% 19 BAC -0.41% 29
MMM 0.77% 10 UTX 0.26% 20 XOM -1.13% 30

Dow 30 - Month-to-Date - Feb 8th 2011

BA 6.41% 1 CAT 3.71% 11 JNJ 1.96% 21
DD 5.98% 2 UTX 3.17% 12 KFT 1.83% 22
DIS 5.94% 3 CVX 2.96% 13 JPM 1.78% 23
AXP 5.76% 4 TRV 2.88% 14 MMM 1.76% 24
GE 5.66% 5 XOM 2.85% 15 T 1.42% 25
HPQ 5.36% 6 IBM 2.50% 16 HD 1.06% 26
PFE 5.16% 7 PG 2.39% 17 INTC 0.84% 27
AA 5.01% 8 MCD 2.29% 18 WMT 0.55% 28
BAC 4.65% 9 VZ 2.02% 19 MRK 0.30% 29
CSCO 3.97% 10 MSFT 1.98% 20 KO 0.03% 30

Dow 30 - YTD Feb 8th 2011

GE 16.35% 1 JPM 7.83% 11 INTC 2.90% 21
HPQ 14.35% 2 DD 7.68% 12 VZ 1.57% 22
XOM 13.48% 3 CAT 7.42% 13 MSFT 1.33% 23
IBM 13.14% 4 CVX 7.11% 14 PG 0.48% 24
AA 13.06% 5 AXP 6.90% 15 KFT -1.21% 25
BA 11.42% 6 UTX 6.55% 16 JNJ -1.47% 26
DIS 9.78% 7 HD 5.99% 17 MCD -1.82% 27
BAC 9.52% 8 WMT 4.54% 18 KO -4.41% 28
PFE 9.42% 9 TRV 3.90% 19 T -5.00% 29
CSCO 8.70% 10 MMM 3.67% 20 MRK -7.69% 30
 Feb 9 2011

Dow 30 - Trailing Twelve Months (TTM) - Feb 8th 2011

CAT 76.35% 1 AXP 20.14% 11 JPM 8.98% 21
DD 59.28% 2 KO 19.25% 12 INTC 5.41% 22
CVX 35.19% 3 HD 19.10% 13 WMT 4.27% 23
GE 32.50% 4 MCD 18.03% 14 PG 2.15% 24
DIS 31.82% 5 BA 15.12% 15 MSFT -1.36% 25
AA 30.83% 6 T 12.49% 16 JNJ -3.27% 26
IBM 30.58% 7 MMM 11.63% 17 HPQ -5.22% 27
XOM 27.66% 8 TRV 10.06% 18 CSCO -9.62% 28
VZ 25.61% 9 KFT 9.50% 19 MRK -9.79% 29
UTX 22.18% 10 PFE 9.17% 20 BAC -12.30% 30

US Economic Calendar
Date Time Report Period Actual Forecast Previous
7-Feb 3:00 PM Consumer credit Dec $6.1 bln - $2.0 bln
8-Feb 7:30 AM NFIB small business Jan 94.1 - 92.6
8-Feb 10:00 AM Job openings Dec 3.06 mln - 3.25 mln
10-Feb 8:30 AM Jobless claims 5-Feb - 420K 415K
10-Feb 10:00 AM Wholesale inventories Dec - - -0.2%
10-Feb 2:00 PM Federal budget Jan - - -$43 bln
11-Feb 8:30 AM Trade balance Dec - -$42 bln -$38.3 bln
11-Feb 9:55 AM Consumer sentiment Feb - 75.5 74.2

Earnings Calendar
Date Code Company Period Est Prv Time
9-Feb CSCO Cisco Systems, Inc. Q2 2011 0.35 0.40 AMC
9-Feb KO Coca-Cola Co. Q4 2010 0.72 0.66 BMO
10-Feb KFT Kraft Foods Inc. Q4 2010 0.46 0.48 4:00 PM

Disclaimer: This report is provided for information purposes only. It is not an offer to sell or to buy any
securities. This report has been prepared based on sources believed to be reliable, but there is no
assurance or guarantee regarding its completeness & and accuracy. The author accepts no responsibility or
liability arising from any use of the report.