Stocks Shake Off Jobs Report and MercadoLibre Gains As LatAm Rushes The Net

City of Industry, CA – Equities were weak at the open on news that employers cut 85,000 jobs in December, well above economists’ expectations. But November payrolls were revised to show a small gain.
The Nasdaq climbed 0.7% to a 16-month closing high. (AMZN) rose 3%, regaining its 50-day moving average. Google (GOOG) edged up 1% to close back above 600. For the week, the NYSE composite climbed 3.3%, the S&P 500 2.7%, the Nasdaq 2.1% and the Dow 1.8%.

China Agritech (CAGC) jumped 9% to a new record high in fast trade. That puts the stock 76% from a 20.89 buy point from a cup-with-handle base. In November, the fertilizer producer reported a 67% increase in Q3 sales — its best performance in years.  China Automotive Systems (CAAS) erased early losses and ran up 7% to a new record high. The company makes power-steering systems. Analysts see its Q4 earnings surge 750% to 17 cents a share. Elsewhere,Ulta Salon (ULTA) added 4% to trade at its highest in more than two years. [Read the full article]

Argentina’s problems are severe. The president on Thursday fired central bank President Martin Redrado, essentially for not allowing the government to use $6.6 billion in reserves to pay sovereign debt due later this year. This is just the latest bit of bad news. The government took over the country’s pension funds a few months ago. The move gave Buenos Aires access to $30 billion, which will likely be lent to the government. Could Argentina default on its debt? It wouldn’t be the first time. The country’s 1999-2003 economic crisis led to a default on $90 billion worth of international bonds in 2001.

The stock retreated from a new 52-week high in the past two weeks. Volume cooled as MercadoLibre tested its 10-week moving average. What makes MercadoLibre’s virtual marketplace different from, say, eBay’s (EBAY)? Latin Americans have been a bit slow to grasp the concept of e-commerce, analysts say. [Read the full article]

Dividend cuts caused investors to lose $58 billion in income over the year, says Howard Silverblatt, senior index analyst at S&P Indices. “Worse than the lack of increases in 2009 was the devastating dividend cuts,” he said. “For the year, 804 issues cut their dividends payments.” On Thursday, S&P said 74 companies decreased their dividend payment during the fourth quarter of 2009.

Like with many economic indicators, conditions are getting less bad. While that’s not the same as improvement, it is a step in the right direction. “The fourth quarter was in no way a good period for dividends, but compared to recent history it marks a significant improvement,” Silverblatt said. “When added to the stabilization in increases, supports our belief that the worst is over for dividends.”

Silverblatt said in a statement that S&P believes the dividend recovery will be slow, and that it will take until 2012 or 2013 to return to pre-bear market levels. [Read the full article]

But despite a recession that caused businesses to cut spending on computers and a less-than-successful launch of the Vista operating system, it is.

It had three straight years of earnings growth until 2009. But analysts and the company expect the growth to continue this year and next. Last year’s launch of Windows 7, which replaces Vista, has been a success. The company is developing Windows Azure, a system that will enable cloud computing. The cloud has become the latest technology buzzword. It essentially means running applications and saving data on the Internet instead of your own computer.

One argument in favor of it is that it allows businesses to focus on their core operation and not as many IT problems. Microsoft has invested $2.5 billion in hosting applications and storing information. In the latest quarter, earnings fell 17%, the fourth straight quarterly decline. Still, that was 8 cents better than expected. [Read the full article]

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