April 21st 2011

INTC : Super Stock of the Day

Gold’s rally past $1,500, impressive earnings from INTC and also UTX, has propelled the DJIA index
higher on Wednesday. Thursday will be the end of this week as the markets will be shutdown to
observe the Good Friday.

The DJIA ended at 12,453.54, up 186.79 points or 1.52% higher, while S&P 500 index settled the
day at 1,330.36, up 17.74 points or 1.35% higher. The tech sector was buoyed by INTC’s earnings
report and later AAPL’s blowout quarter, hence the NASDAQ rose 57.54 points or up 2.1% to end
the day at 2,802.51. INTC itself skyrocketed by over 7% after delivering a report which
dumbfounded most analysts.

Crude oil also continues to creep up. US light crude finished $3.17 higher at $111.45 a barrel while
the ICE Brent crude for June delivery settled at $123.85, up $2.52 a barrel. Both are nearing the
peak hit a week earlier at $113 and $127, respectively. Decline in US crude inventory by 2.32M
barrels last week has dumbfounded the market expectation of the addition of 1.1M barrels of the
inventory.

Spot gold ended at $1,500.50 an ounce after hitting the intraday of $1,505.70 an ounce. Gold
futures for June delivery went up $3.80 or 0.3% to settle at $1,498.90 an ounce, retreating from its
intraday peak of $1,506.20 an ounce.

On to the earnings announcement, AXP and UTX beat estimates, while T got a mixed result as
revenues missed the consensus. EPS though, was bang on target (see table).

EPS Revenues
Date Company Period F/C Prv Actual F/C Prv Actual
20-Apr AXP Q1 $0.92 $0.73 $0.97 $6.98B $6.56B $7.03B
20-Apr T Q1 $0.57 $0.59 $0.57 $31.26B $30.53B $31.25B
20-Apr UTX Q1 $1.07 $0.93 $1.11 $12.83B $12.04B $13.34B

Despite beating estimates, AXP fell 1.28% to $46.40 during the after-hours session after the stock
rose 0.77% in the regular session. UTX responded the strong quarter with a solid 4.3% gains while T
however, declined 0.59% or 18c by the end of the day.

1 .DJI 12,453.54 (+186.79 ● +1.52%) .SPX 1,330.36 (+17.74 ● +1.35%) .IXIC 2,802.51 (+57.54 ● +2.10%)
 April 21st 2011

Day Ahead
Three Dow components will report their earnings today: DD, GE, and MCD.

EPS Revenues
Date Company Period F/C Prv F/C Prv
21-Apr DD Q1 $1.36 $1.24 $9.19B $8.48B
21-Apr GE Q1 $0.28 $0.21 $34.64B $36.26B
21-Apr MCD Q1 $1.14 $0.21 $6.00B $5.61B

MCD is set to report BMO with analysts expecting EPS at $1.14 on revenue of $6B. Pricing strategies
will be in focus as rising raw material costs have the potential to erode profitability. A few notes on
MCD are the rising global sales of 3.9% in February, declining Japan sales by 7.3% in March, and
the recent aggressive hiring plan of 50K new crew. According to First Call, consensus range on EPS is
between $1.05 and $1.16 while consensus range on revenue comes at $5.82B-$6.09B.

The conglomerate GE will also report BMO on Thursday. First Call’s consensus on EPS ranges between
27c and 30c with the median of 28c. Revenue is seen within the range of $31.74B and $37.50B with
median lies at $34.64B. Recent weakness in GE shares came from the negative impact of Japan’s
quake where GE was the designer of the Fukushima’s nuclear plant. This however, should not be a big
dent to GE as a whole. True, the banning of nuclear plants on several countries may hurt future
earnings, but in time, given that GE has been very adaptive to technological progress, a loss of
nuclear business may be no more than a scratch.

Elsewhere, DD is seen scoring Q1 EPS at $1.36, better than $1.24 recorded in Q1 2010.

2 .DJI 12,453.54 (+186.79 ● +1.52%) .SPX 1,330.36 (+17.74 ● +1.35%) .IXIC 2,802.51 (+57.54 ● +2.10%)
 April 21st 2011

Stock Focus: United Technologies Corp.

UTX
Last Apr 20th Resistances 86.85 87.41 90.14 95.67 102.57
$85.90 4.30% Supports 85.50 84.70 84.00 83.35 82.55
WTD MTD Outlook
2.94% 1.48% POSITIVE
YTD 12-Month Price Tgt
9.12% 14.61% $87.41

UTX surged past $86.00 resistance after the company released its earnings on Wednesday. The big
question is whether it was a false break or a genuine one. EMAs are rising; MACD is trying to flip to
the positive side, while volume was increasing. RSI itself is far from being overbought, indicating a
vast room to rally. Pullbacks may be seen as an opportunity to enter LONG, and this could be done
starting at $85.50 and subsequent supports. Key support lies at $81.19, below this will turn the
outlook back into NEUTRAL.

3 .DJI 12,453.54 (+186.79 ● +1.52%) .SPX 1,330.36 (+17.74 ● +1.35%) .IXIC 2,802.51 (+57.54 ● +2.10%)
 April 21st 2011

Price Performance - as of Apr 20th 2011

Code Last Dy WTD MTD YTD 12-Mos
AA 16.64 1.22% 0.73% -5.78% 8.12% 23.90%
AXP 47.00 0.77% 1.62% 3.98% 9.51% 1.91%
BA 75.07 2.62% 3.40% 1.54% 15.03% 3.64%
BAC 12.27 -0.57% -4.29% -7.95% -8.02% -31.18%
CAT 108.28 2.05% 1.00% -2.76% 15.61% 59.02%
CSCO 16.93 1.93% -0.59% -1.28% -16.31% -37.13%
CVX 107.81 2.29% 1.48% 0.30% 18.15% 32.38%
DD 55.37 1.28% 0.87% 0.73% 11.01% 38.98%
DIS 42.04 1.67% 1.25% -2.44% 12.08% 14.12%
GE 20.40 0.64% 1.80% 1.75% 11.54% 8.17%
HD 37.94 0.45% -0.60% 2.37% 8.21% 7.69%
HPQ 40.89 2.25% 1.56% -0.20% -2.87% -21.32%
IBM 164.75 -0.39% -0.88% 1.03% 12.26% 27.71%
INTC 21.41 7.80% 8.41% 6.10% 1.81% -6.26%
JNJ 64.39 2.71% 6.32% 8.68% 4.11% 0.14%
JPM 44.56 -0.20% -0.74% -3.34% 5.04% 4.65%
KFT 33.56 0.48% 0.60% 7.02% 6.51% 13.38%
KO 67.85 1.13% -0.24% 2.28% 3.16% 26.94%
MCD 78.40 2.35% 1.32% 3.04% 2.14% 11.06%
MMM 93.76 2.07% 1.01% 0.28% 8.64% 5.74%
MRK 34.04 0.86% -1.36% 3.12% -5.55% -2.85%
MSFT 25.76 2.43% 1.54% 1.46% -7.70% -15.65%
PFE 20.39 -0.68% -0.68% 0.39% 16.45% 21.95%
PG 63.72 -0.22% -0.72% 3.44% -0.95% 2.51%
T 30.13 -0.59% -1.70% -1.57% 2.55% 15.62%
TRV 59.13 1.63% -1.12% -0.59% 6.14% 16.54%
UTX 85.90 4.30% 2.94% 1.48% 9.12% 14.61%
VZ 37.79 1.48% -0.16% -1.95% 5.62% 30.76%
WMT 53.69 0.64% 0.26% 3.15% -0.45% 0.09%
XOM 85.65 2.21% 1.61% 1.81% 17.14% 26.38%

4 .DJI 12,453.54 (+186.79 ● +1.52%) .SPX 1,330.36 (+17.74 ● +1.35%) .IXIC 2,802.51 (+57.54 ● +2.10%)
 April 21st 2011

Analysts' Upgrades & Downgrades

Code House Ratings PT
GE Deutsche Bank Hold $22 $23
IBM Barclays Capital Equal Weight $167 $176
IBM RBC Capital Sector Perform $176 $180
IBM Stifel Nicolaus Buy $185 $187
INTC UBS Buy $27 $28.50
INTC Longbow Buy $27 $30
INTC JP Morgan Chase Neutral OVERWEIGHT $20.50 $25.00
INTC FBR Capital Market Perform OVERWEIGHT $25.00 $27.00
n Reiterate n Upgrade n Downgrade n Initiation

US Economic Calendar
Date Time Report Period Actual Forecast Previous
18-Apr 10:00 AM Home builders' index Apr 16 17 17
19-Apr 8:30 AM Housing starts Mar 549K 529K 512K
19-Apr 8:30 AM Single-family permits Mar 405K n/a 382K
20-Apr 10:00 AM Existing home sales Mar 5.10M 5.05M 4.88M
21-Apr 8:30 AM Jobless claims 16-Apr 390K 412K
21-Apr 10:00 AM Leading indicators Mar 0.2% 0.8%
21-Apr 10:00 AM Philly Fed Apr 38.0 43.4

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.

5 .DJI 12,453.54 (+186.79 ● +1.52%) .SPX 1,330.36 (+17.74 ● +1.35%) .IXIC 2,802.51 (+57.54 ● +2.10%)