Apple Unveils Much Awaited iPad

Apple Unveils Much Awaited iPad

Apple Inc. released the much anticipated iPad this week. Apple CEO Steve Jobs unveiled the new iPad with a price tag starting at $499. The technology company's stock soared prior to the announcement and then fell immediately after the unveiling.

The new iPad has a touchpad keyboard similar to an iPhone and may be purchased with three memory options. It's a lighter device than the notebook at only 0.5" thick and 1.5 pounds. The iPad's 10-hour battery life also is longer than the typical notebook computer, permitting users to take it out of the office or on a long flight without needing to recharge.

Jobs says that the new iPad has better Internet browsing capabilities than a computer. It permits the user to download and read books (similar to Amazon's Kindle), listen to music and includes calendar and contact applications similar to those available on the iPhone. Users may download applications, music, videos and more from the Apple iStore. Books may be purchased from Apple's new online iBookstore.

Analysts are wondering if Jobs has managed to create a third category of essential technology with the iPad. Skeptics say that the iPad provides nothing new - just more of the same applications on a lighter device with a larger screen. Still, Jobs has managed to create a loyal following for Apple technology (including the iPod, iPhone and MacBook). Apple users are lining-up to order the new iPad and try it for themselves.

Apple (AAPL) ended the week at $192.12.

Verizon Reports Loss from Workforce Reductions

Verizon reported a fourth-quarter loss this week of 23 cents per share, compared with earnings of 43 cents per share in the fourth-quarter of 2008. The company attributed the loss to $3 billion in costs related to its recent workforce reductions as part of the prior year's restructuring efforts.

"In last year's turbulent economy, we took significant steps to strengthen Verizon going forward," said Chairman and CEO Ivan Seidenberg. Verizon said that it took a number of steps to expand its wireless data in 2009 and set the stage to deploy a nationwide 4G network later this year. It also expanded the scale of FiOS and its global IP network, where it anticipates continued growth in 2010.

In the fourth quarter, Verizon continued streamlining its wireline operations. The company also incurred costs in preparation for the spin-off of wireline access lines to Frontier Communications, a transaction that is on track to close in the second quarter of 2010.

Verizon says that the company made it through a successful transformation in 2009 that will prepare it for a better 2010. Verizon re-sized and simplified its wireline business over the year to increase productivity. With a customer base moving more toward data-centric devices and services, Verizon is working to integrate its operations and create new synergies among company components.

Verizon (VZ) ended the week at $29.42.

Boeing Posts Strong Earnings and Solid Performance

The Boeing Company reported a strong fourth quarter this week with improved earnings and cash flow. The aerospace company's profits rose by 42% to $17.9 billion during the quarter. Boeing said that its performance represented a significant improvement over the prior year when the company faced a labor strike and additional charges.

Boeing's revenue for the full year reached a record $68.3 billion due to higher commercial deliveries and growth in defense, space and security. "We put a strong finish on 2009 by getting the 787 in the air and generating solid core operating performance across the company," said Jim McNerney, Boeing Chairman, President and Chief Executive Officer.

Despite the strong quarter, Boeing was cautious about future earnings. It announced that earnings for 2010 would be less, reflecting a reduction in 777 production rates due to the economy and reduced aerospace spending. Boeing also said that it will be impacted by the federal government's reduction in the scope of its Army modernization plan and missile defense programs.

In 2010, Boeing will focus on continuing to improve its operational performance, certifying and delivering the 787 and 747-8 and repositioning its defense, space and security businesses. While analysts say that the challenges Boeing faces are significant, Boeing believes it has the resources to remain successful despite the reduced defense and aerospace industry spending.

Boeing (BA) ended the week at $60.60.

The Dow started the week at 10,173 and ended at 10,067. The S&P 500 started the week at 1,092 and ended at 1,074. The NASDAQ started the week at 2,205 and finished at 2,147.

Treasury Yields Rise on Signs of Recovery

Treasury Yields Rise on Signs of Recovery

Treasury yields rose to their highest levels this week on signs that the economy is in recovery. The stock market climbed and then fell Thursday following President Obama's State of the Union Address. The President called for job-creation measures, tax cuts to promote small-business hiring and use of bailout funds for loans to small businesses made through community banks.

The Federal Reserve (Fed) voted 9-1 to keep the target federal-funds rate in the range of zero to 0.25% this week. While the Fed maintained that rates would remain lower for an "extended period" it changed its general statement on the economy from "likely to remain weak for a time" to "the pace of economic recovery is likely to be moderate for some time." Stocks rose with Treasury prices reaching a session low following the announcement.

Durable goods orders for manufactured goods rose by 0.3% in December the Commerce Department reported this week. Orders for planes, cars, appliances and other items rose to $167.9 billion. Analysts said that the postive report suggested improvement in the industrial sector following the 0.4% decrease in November orders.

While there were signs of economic improvement this week, the employment situation continues to weigh on the markets. Claims for state unemployment benefits fell, but not by as much as economists anticipated, to 470,000 this week. First-time claims fell by 8,000 for the week ending January 23. The Labor Department revised its claims number for the prior week, increasing it by 34,000 to 478,000, marking the highest level for unemployment claims since November 2008.

The 10-year Treasury note yield began at 3.60% and ended at 3.58%. The 30-year Treasury note yield began at 4.52% and finished at 4.49%.

Mortgage Rates Remain Flat

Mortgage Rates Remain Flat

Freddie Mac reported mortgage rates remaining flat this week. The 30-year fixed-rate mortgage (FRM) averaged 4.98%, down slightly from last week when it averaged 4.99%. Last year at this time, the 30-year FRM averaged 5.10%. The 15-year FRM averaged 4.39%, down slightly from last week when it averaged 4.40%. One year ago at this time, the 15-year FRM averaged 4.80%.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.25% this week, down from last week when it averaged 4.27%. One year ago, the 5-year ARM averaged 5.27%. The 1-year Treasury-indexed ARM averaged 4.29%, down from last week when it averaged 4.32%. At this time last year, the 1-year ARM averaged 4.90%.

"Mortgage rates held steady this week ahead of the Federal Reserve's (Fed) policy committee meeting," said Frank Nothaft, Freddie Mac Vice President and Chief Economist. "The Fed announced on January 27 that economic activity has continued to strengthen. It also noted that with substantial resource slack continuing to restrain cost pressures and with longer-term inflation expectations stable, inflation is likely to be subdued for some time."

Nothaft went on to say that last year was a difficult year for the housing market. New housing starts fell while home sales fell below 400,000, which was an all-time record low. However, total existing home sales rose to almost five million marking the first annual increase in four years.

The money market fund finished this week at 0.88%. The 1-year CD finished at 1.35%.

Stocks - eBay Reports Rising Revenues
Bonds - Treasuries Fall on Economic Data Reports
Interest Rates - Long-term Rates Down for Third Week

Stocks - Intel Posts Huge Profits
Bonds - Treasuries Up on Low Inflation
Interest Rates - Fixed Rates Down Slightly; ARMs Mixed

Stocks - Best Buy Reports Record Revenue Growth
Bonds - Shorter Maturity Notes Rise on Job Losses
Interest Rates - Rates Slightly Lower in the New Year

Stocks - Oil and Natural Gas up at Year's End
Bonds - Treasuries to End Worst Year in Three Decades
Interest Rates - Slightly Higher Rates Remain Affordable

Stocks - Walgreen Earnings Soar
Bonds - Treasuries Fall on Improving Economy
Interest Rates - Rates Still at Incredibly Low Levels