Intel Posts Huge Profits

Intel Posts Huge Profits

Intel Corporation reported fourth-quarter revenue of $10.6 billion this week, up $2.3 billion and 28% over last year. Profits for the quarter totaled $2.3 billion, up $2 billion and 875% over the prior year.

"Intel's strong 2009 results reflect our investment in industry-leading manufacturing and product innovation," said Paul Otellini, Intel President and CEO. Otellini said that this strategy has enabled Intel to generate operational efficiencies and grow even in a difficult economic environment.

Intel benefited from strong holiday sales with notebook computers as one of the most popular gift items for 2009. Server sales were also higher this quarter, suggesting that business IT spending is returning.

Analysts say that Intel's ability to weather this business cycle demonstrates its strength in the microprocessor field. Intel estimates revenues of $9.7 billion for quarter one of 2010. Looking forward to the future, the company says that it plans to expand the reach of its computing to new products, markets and customers.

Intel (INTC) ended the week down at $20.80.

JP Morgan Chase Optimistic on Profits

JP Morgan Chase & Co. gave an optimistic report this week reporting fourth-quarter profits of $3.3 billion, compared to profits of $702 million in the fourth-quarter of 2008. For the full year of 2009, company profit rose to $11.7 billion from $5.6 billion in 2008.

Analysts point out that the company's credit costs remain high as it continues to absorb consumer loan loss. Jamie Dimon, Chairman and Chief Executive Officer, commented on the results: "Though these results showed improvement, we acknowledge that they fell short . . .While we are seeing some stability in delinquencies, consumer credit costs remain high, and weak employment and home prices persist. Accordingly, we remain cautious."

Commenting on the balance sheet, Dimon added that the company strengthened its credit reserves to nearly $33 billion, or 5.5% of total loans in the quarter. JP Morgan Chase remains confident that this capital and reserve strength will allow it to meet market uncertainties while continuing to invest in growing its banking business.

JP Morgan Chase says it is also working to help homeowners meet the challenges of declining home prices and rising unemployment. The company is taking action to prevent foreclosures through a new loan modification program. By the end of March, it plans to have opened 51 Chase Homeownership Centers across the country with more than 14,000 employees dedicated to mortgage loss mitigation.

J.P. Morgan Chase & Co. (JPM) ended the week down at $43.63.

Facebook Partners with McAfee for Internet Security

McAfee, Inc. and Facebook announced a partnership this week to provide added security to Facebook users. McAfee says it will make its security software available to Facebook as part of an effort to reduce global cyber crime.

Facebook users will be eligible for a free six-month subscription of the McAfee Internet Security Suite software and special discount subscription pricing. McAfee says that its Internet Security Suite software protects users' PCs from online threats, viruses, spy ware, hackers, online scammers, identity thieves and other cyber criminals.

"Facebook is very serious about security and has made significant efforts to protect its users and service by investing in dedicated teams and sophisticated systems and this partnership with McAfee furthers that mission," said Todd Gebhart, McAfee Executive Vice President and General Manager. If a Facebook account is compromised, Facebook requires users to take steps to re-secure their account. This process will now also include custom McAfee technology to clean users' computers.

Facebook selected McAfee after a competitive review process among the leading security vendors. McAfee is rated the number one vendor in threat detection. Research has shown that up to 78% of consumers do not have updated anti-virus, an enabled firewall and anti-spy ware, and 48% of them have expired anti-virus, the most fundamental protection. The companies say that their partnership is designed to address this problem.

McAfee (MFE) ended the week down at $40.98

The Dow started the week at 10,618 and ended at.10,610. The S&P 500 started the week at 1,145 and ended at 1,136. The NASDAQ started the week at 2,317 and finished at 2,288.

Treasuries Up on Low Inflation

Treasuries Up on Low Inflation

Treasuries rose this week with 10-year notes climbing above their 2009 lows after the Bureau of Labor and Statistics reported the Consumer Price Index (CPI) rose only 0.1% in December. The low inflation indicator confirms the Federal Reserve's recent assertions that inflation is not currently an economic threat.

The Reuters/University of Michigan consumer confidence index rose to 72.8 in January from 72.5 in December, suggesting that consumers also see improvement in the economy. While December retail sale fell by 0.3%, overall the market indicators point towards recovery.

Economists say that the decline in retail sales was attributable to bad weather that kept shoppers indoors over the holidays. However, online and catalog sales rose by 1.4%, suggesting that more shoppers are making purchases from home. Also, economists noted that the weak labor market continues to make consumers cautious.

The largest rise in jobless claims in five-weeks also impacted the markets. Initial unemployment claims rose by 11,000 to 444,000 for the week ended January 9 according to the Labor Department. Nevertheless, market analysts say that the trend in jobless claims remains positive, since claims filed over four-weeks are at a low.

The 10-year Treasury note yield began at 3.81% and ended at 3.68%. The 30-year Treasury note yield began at 4.70% and finished at 4.58%.

Fixed Rates Down Slightly; ARMs Mixed

Fixed Rates Down Slightly; ARMs Mixed

Freddie Mac reported fixed-rate mortgages down slightly this week, while the rates for ARMs were mixed. The 30-year fixed-rate mortgage (FRM) averaged 5.06%, down from last week when it averaged 5.09%. Last year at this time, the 30-year FRM averaged 4.96%.

The 15-year FRM averaged 4.45%, down from last week when it averaged 4.50%. One year ago at this time, the 15-year FRM averaged 4.65%.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.32% this week, down from last week when it averaged 4.44%. One year ago, the 5-year ARM averaged 5.25%. The 1-year Treasury-indexed ARM averaged 4.39% this week, up from last week when it averaged 4.31%. At this time last year, the 1-year ARM averaged 4.89%.

"Interest rates for fixed-rate mortgages eased a little further this week, while ARM rates were mixed," said Frank Nothaft, Freddie Mac Vice President and Chief Economist. "With fixed mortgage rates staying near a record low, many homeowners are taking the opportunity to refinance."

Mortgage applications for refinancing continue at high levels -- 75% of total applications for the last three months according the Mortgage Bankers Association. The Federal Reserve's January 13 report also suggested positive improvement in the housing market. Lower-priced home sales increased due to the homebuyer tax credit, despite little change in housing prices over the prior month.

The money market fund finished this week at 0.89%. The 1-year CD finished at 1.38%.

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