Feb 11 2011

Dow Jones Industrial Average’s

Dow 12,233.15 +71.52 +0.59%
relentless winning streak has finally
come to an end on Thursday. Singed S&P 500 1,324.57 +5.52 +0.42%
by the CSCO’s poor earnings, the Nasdaq 2,797.05 +13.06 +0.47%
DJIA finished down 10.60 points or
0.09% at 12,229.29. On the contrary, S&P 500 and Nasdaq indexes finished up 0.07% and
0.05%, respectively. The Dow surged from the red to positive area just before the session
ended thanks to Egyptian president’s speech which stated that he would step down when his
terms ends in September. While this was viewed as positive, but the Egyptians were outraged
by it as they want Mubarak to step down immediately.

Despite a better-than-expected jobless claims data, the Dow had been under pressure since
the session started, weighed by CSCO’s weakness. CSCO fell 14.16% to $18.92 following its
earnings report which missed the market’s consensus. Various houses slashed and downgraded
their ratings on CSCO although some saw the current weakness could be used to exploit
CSCO’s long-term potential.

Corporate News
 Following up CSCO’s plunge on Thursday, the stock has lost 10.54% so far this month. YTD,
CSCO lost 6.48%, while compared to its level 12 months ago, the stock is now 22.24%
lower.
 AXP led the Dow 30 with 1.86% gains. The company had its EPS estimates upgraded by
FBR Capital, with FY11 and FY12 estimates now seen at $3.80 and $3.95, respectively.
AXP was also reiterated at Market Perform with PT at $50. AXP has been a decent
performer so far, already gaining 7.35% MTD and 8.50% YTD. Currently, AXP is 21.94%
above last year’s level.
 KFT reported its quarterly earnings on Thursday. Q4 EPS was reported at $0.46, in line
with the consensus of $0.46 as well. Revenue was reported at $13.77 billion, better than
the consensus of $13.47 billion. The company reported operating EPS growth in 2011 at
around 11% to 13%, with organic net revenue to grow at around 5%. KFT saw the input
costs to remain high throughout 2011, however. KFT fell 1.96% after the regular session
ended. MTD, KFT has gained 1.77%.
 MSFT fell 1.68% on Thursday’s session. The software giant and Nokia was confirmed to
have agreed to work on a broad strategic partnership aimed to build a new global
ecosystem. Meanwhile, MSFT chairman Bill Gates sold 90 million shares of MSFT in 2010.
The sum were 13% of Gates total shares in MSFT and after the divestment, Gates still the
largest stockholder with 7% ownership. Analysts speculated that the divestment was done
due to disappointing returns. Also, according to ComScore Inc., MSFT’s Bing edged up in
market share in January. Bing’s share was up from 12% to 13.1%, while Google slipped
to 65.6%. Yahoo’s search engine however, inched higher in market share as well, going up
from 16% to 16.1%. MSFT has been disappointing so far, having slipped 0.83% this
February alone, while declining 1.47% since the beginning of January.
 Feb 11 2011

Upgrades & Downgrades

Rating PT
Code House Date
Prv Current Prv Current
AXP FBR Capital 10-Feb Market Perform Market Perform - $50
CSCO Auriga 10-Feb Buy Buy - $25
CSCO Avondale 10-Feb Outperform Market Perform - -
CSCO Citigroup 10-Feb Buy Hold $25 $22
CSCO Cowen 10-Feb Outperform Outperform - -
CSCO Goldman Sachs 10-Feb - Neutral - $21
CSCO Oppenheimer 10-Feb Outperform Outperform - -
CSCO Piper Jaffray 10-Feb Overweight Neutral $25 $21
CSCO Stifel Nicolaus 10-Feb Buy Hold - -
KO Gabelli 10-Feb Buy Buy - -
KO Goldman Sachs 10-Feb - Buy - $72
WMT UBS AG 10-Feb Buy Neutral $61 $60

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 383K 410K 419K
10-Feb 10:00 AM Wholesale inventories Dec 1.0% 0.7% 0.0%
10-Feb 2:00 PM Federal budget Jan -$49.8 bln -$56.2 bln -$42.6 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
 Feb 11 2011
Stock focus: CAT

CAT
Feb 10th MTD Resistances 102.20 103.63 103.86 104.68 107.15

↑ 0.81% ↑ 3.70% Supports 94.34 95.55 96.56 97.57 98.69

YTD 12-Month Outlook

↑ 7.41% ↑ 76.34%
POSITIVE
Last

$100.60 Strategy Buy dips to $98.69, risk < $95.55, PT $103.86

 Feb 11 2011

Dow 30 - Feb 10th 2011

AXP 1.86% 1 HD 0.38% 11 IBM -0.34% 21
INTC 1.58% 2 PG 0.30% 12 MMM -0.35% 22
T 0.97% 3 JNJ 0.08% 13 KFT -0.42% 23
JPM 0.93% 4 BA 0.04% 14 TRV -0.60% 24
DD 0.93% 5 PFE -0.10% 15 VZ -0.71% 25
UTX 0.92% 6 DIS -0.12% 16 HPQ -0.82% 26
CAT 0.81% 7 MRK -0.15% 17 BAC -1.02% 27
XOM 0.79% 8 GE -0.19% 18 MSFT -1.68% 28
KO 0.62% 9 MCD -0.22% 19 WMT -2.01% 29
CVX 0.48% 10 AA -0.23% 20 CSCO -14.16% 30

Dow 30 - Month-to-Date - Feb 10th 2011

DIS 11.42% 1 CAT 3.70% 11 KFT 1.77% 21
AXP 7.35% 2 AA 3.32% 12 INTC 1.58% 22
DD 7.20% 3 XOM 3.12% 13 HD 1.47% 23
HPQ 6.24% 4 MMM 2.89% 14 JPM 1.31% 24
GE 5.61% 5 MCD 2.84% 15 IBM 1.29% 25
BA 5.54% 6 T 2.62% 16 KO 1.10% 26
BAC 4.58% 7 PG 2.30% 17 MRK -0.39% 27
PFE 4.45% 8 VZ 2.25% 18 MSFT -0.83% 28
UTX 4.24% 9 JNJ 1.94% 19 WMT -0.86% 29
TRV 3.91% 10 CVX 1.86% 20 CSCO -10.54% 30

Dow 30 - YTD Feb 10th 2011

GE 16.29% 1 AXP 8.50% 11 VZ 1.79% 21
DIS 15.46% 2 UTX 7.66% 12 PG 0.39% 22
HPQ 15.30% 3 CAT 7.41% 13 KFT -1.27% 23
XOM 13.79% 4 JPM 7.33% 14 MCD -1.30% 24
IBM 11.81% 5 HD 6.42% 15 MSFT -1.47% 25
BA 11.34% 6 CVX 5.97% 16 JNJ -1.49% 26
AA 11.24% 7 TRV 4.94% 17 KO -3.39% 27
DD 8.92% 8 MMM 4.82% 18 T -3.88% 28
PFE 8.68% 9 INTC 3.66% 19 CSCO -6.48% 29
BAC 8.62% 10 WMT 3.08% 20 MRK -8.32% 30
 Feb 11 2011

Dow 30 - Trailing Twelve Months (TTM) - Feb 10th 2011

CAT 76.34% 1 AXP 21.94% 11 PFE 8.43% 21
DD 61.12% 2 KO 20.52% 12 INTC 6.19% 22
DIS 38.64% 3 HD 19.58% 13 WMT 2.81% 23
CVX 33.75% 4 MCD 18.65% 14 PG 2.05% 24
GE 32.44% 5 BA 15.04% 15 JNJ -3.29% 25
IBM 29.04% 6 T 13.83% 16 MSFT -4.08% 26
AA 28.72% 7 MMM 12.86% 17 HPQ -4.43% 27
XOM 28.00% 8 TRV 11.16% 18 MRK -10.41% 28
VZ 25.89% 9 KFT 9.43% 19 BAC -13.03% 29
UTX 23.45% 10 JPM 8.48% 20 CSCO -22.24% 30

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.