The Dow "flirted with 13,000," as they say, as all three major indexes moved up today:
Dow Jones Industrial Average (INDEX: ^DJI)
Nasdaq (INDEX: ^IXIC)
S&P 500 (INDEX: ^GSPC)
On the economic front, there was positive jobs news as the Labor Department reported 351,000 initial claims for state unemployment benefits for last week. That brings the four-week average down to 359,000, a figure we haven't seen since March 2008.
Meanwhile, there was one big mover up on the Dow and one big mover down.
Procter & Gamble (NYS: PG) was up 3.1% after announcing a potential $10 billion in cost cuts. It announced an additional 4,000 nonmanufacturing job cuts to supplement the 1,600 job cuts already announced for this fiscal year. That's a little more than 4% of its total workforce, or about 10% of its non-manufacturing total. This is in addition to spending cuts in areas like marketing, packaging, and supply chain. In total, it's looking to spend $3.5 billion by 2016 to effect $10 billion in annual savings. To put that in perspective, P&G had $85 billion in sales in 2011.
On the downside, Hewlett-Packard (NYS: HPQ) shares tumbled 6.5% after reporting surprisingly weak first-quarter earnings after hours yesterday. Sales fell 7% and earnings fell a whopping 44%. On a per-share basis, that resulted in EPS of $0.73 a share versus $1.17 a share last year. Aside from acquisitions, segment operating earnings were down pretty much across the board.
HP's P/E ratio is now at 9 times earnings, factoring in drops in both the numerator and denominator. The question for investors is whether those earnings are going to continue to deteriorate.
There's a lot of clamoring for new CEO Meg Whitman to make huge, sweeping changes and declarations. However, I like that she's taking her time and cautioning for a long road ahead.
I'll be monitoring the HP situation for any positive signs for its long-term prospects. But for some ideas that are less of a turnaround situation, check out our free report, "3 Stocks That Will Help You Retire Rich." Along with sharing three stock ideas, it'll help you game plan for retirement. Get access now.
At the time thisarticle was published Anand Chokkaveluholds no position in any company mentioned.Motley Fool newsletter serviceshave recommended buying shares of Procter & Gamble. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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