April 25th 2011

Upbeat Earnings Lifted the Street

Thursday saw the Dow 30 climbed 52.45 points or 0.42% to finish at 12,505.99 while the S&P 500
index ended at 1,337.38, 7.02 points higher or up 0.53%. NASDAQ Composite also gained, settling
at 2,820.16, up 17.65 points or 0.63% higher.

Top gainers from Thursday market action were TRV with 3.70% gains, IBM which climbed 2.14%, and
AA which advanced 1.98%. Among losers, PFE was at the rock bottom, accompanied by VZ (-2.33%)
and GE (-2.21%).

Wrap-up of the week showed INTC as the super stock with gains of 8.66% after an impressive
earnings report, while JNJ was next with 5.8% gains and UTX as the third best with 4.37% gains. At
the opposite side, BAC led the losers with 3.98% of losses; PFE was next with a 3.6% decline and
third from the bottom VZ ended the week 2.48% lower.

Closing in to the end of the month, JNJ led on MTD basis with gains of 8.14%, followed by KFT
(+6.44%) and INTC (+6.34%). BAC has been down 7.65% so far this month, while VZ lost 4.23%
and AA ended down 3.91% so far.

Earnings Review
DD beat estimates of $1.36 per share as it recorded net profit of $1.52 per share. The company
raised its FY11 outlook to $3.65-$3.85 from its previous estimate of $3.45-$3.75 per share
(excluding Danisco), roughly within the consensus of $3.71. Danisco, the firm being targeted by DD
will reduce FY11 EPS by 30c-45c if the deal materializes. Agriculture & Nutrition segment sales were
up 18%, Electronics & Communications segment sales were up 29%, Performance Chemicals segment
sales were up 27%, Performance Coatings segment sales advanced 10%, Performance Materials
segment sales rose 11%, and Safety & Protection sales were also up 22%. Pharmaceuticals segment
was the only one posting losses of 77% from $221M to $50M. DD also beat revenue expectations as
it reported revenues were up from $8.48B to $10.03B whereas the market had anticipated revenues
to be at $9.19B.

MCD also beat forecast but by a narrow margin of 1c. The fast food giant reported Q1 EPS at
$1.15, better than the consensus of $1.14 and $1.00 EPS booked a year earlier. Revenue also beat
expectations of $6.00B as it posted $6.11B of revenue. A year earlier, MCD booked $5.61B of
revenue. Global comparable sales were up 4.2%, with U.S. saw a growth of 2.9%, Europe grew
5.7%, and AsPac ME & Africa grew 3.2%. MCD also returned $2B to shareholders via share
repurchases and dividends. Despite the report, MCD shares were down by almost 2% at $76.91.
Commodity cost increases which are expected within the next two quarters were the prime suspects
behind the fall. As a result, MCD has considered small price increases this fiscal year to offset the
rising commodity costs. In addition, MCD sees EPS to be positively influenced by 6c-7c per share due

1 .DJI 12,505.99 (+52.45 ● +0.42%) .SPX 1,337.38 (+7.02 ● +0.53%) .IXIC 2,820.16 (+17.65 ● +0.63%)
 April 25th 2011

to USD weakness while full year EPS is seen positively influenced by 15c-17c. As for its Japan
operation, the quake was seen as having minor impact.

GE’s Q1 EPS trumped Wall Street’s forecast as the conglomerate posted net profit of 33c (excluding
one-time items) and 31c (including special items). The Street had anticipated a rise in Q1 EPS at 28c
from a year earlier EPS of 21c. Revenue which was anticipated at $34.64B was reported at
$38.45B. The figure is better than the prior year’s revenue of $36.20B. Quarterly dividend was also
raised by 1c to 15c from 14c, but Jeff Immelt – GE’s CEO – warned that GE is not planning to keep
on raising its dividend. According to GE, GE Capital was the best performing division while despite
underperforming; energy division was seen as having positive trends in the future. GE settled the day
at $19.95, down 2.21% and further 0.3% to $19.89 after the market closed.

TRV was the biggest jumper on Thursday with 3.7% of gains. The jump was attributed to the better-
than-expected earnings report which showed that Q1 operating EPS soared to $1.89 per share from
$1.22 per share. Revenue on the other hand, was reported at $6.28B, up from $6.12B and beating
expectations of $5.46B. TRV also said that it repurchased 18.9M of common shares worth $1.1B
while the Board of Directors approves a raise in quarterly dividend to 41c, a 14% increase. TRV’s
solid quarter owed to the sharply declining catastrophe losses, fewer outstanding shares and
favorable resolution of prior tax issues.

VZ added 906K subscribers in Q1, according to the company’s Q1 earnings report. The net additions
were better than the expected 888K. EPS was reported at 51c per share, up from 16c a year
earlier, but just slightly beating the 50c consensus. Revenue however, was reported at $26.99B,
higher than the analysts’ estimates of $26.89B and also beating the year-ago revenue of $26.86B.
Capex during Q1 were at $4.4B and cash flow from operations was at $5B. For FY2011, the
company forecast growth in EPS of 8% and sees cash flow to rebound in Q2 and throughout
subsequent quarters. ARPU is also seen accelerating through 2011 after Q1 saw retail postpaid
ARPU at $53.52 and retail postpaid data ARPU at $20.51. In addition, VZ reported strong demand
for Apple products such as iPad 2 which it quickly sold out early March, as well as HTC Thunderbolt
smartphones. In Q1, 60% phones sold were smartphones. On the other hand, VZ remains undecided
whether it would carry RIMM’s new tablet, the PlayBook. Total wireless customers were 104M in Q1
while retail customers were 88.4M. Despite up by 5c in after-hours session, VZ dived 2.33% during
the regular session, settling at $36.91. The fall might have been attributed by marginal positive
surprise factor on the earnings.

Week Ahead
While no earnings are scheduled on Monday, KO and MMM are set to release their earnings on
Tuesday. On Wednesday, it will be BA’s turn. XOM, MSFT and PG are scheduled to release theirs on
Thursday, followed by CVX, MRK, and CAT on Friday.

Another key event next week is the FOMC meeting which could hold the hint on the course of US
monetary policy.
2 .DJI 12,505.99 (+52.45 ● +0.42%) .SPX 1,337.38 (+7.02 ● +0.53%) .IXIC 2,820.16 (+17.65 ● +0.63%)
 April 25th 2011

3 .DJI 12,505.99 (+52.45 ● +0.42%) .SPX 1,337.38 (+7.02 ● +0.53%) .IXIC 2,820.16 (+17.65 ● +0.63%)
 April 25th 2011

Stock Focus: Travelers Companies, Inc.

TRV
Last Mar 21st Resistances 61.41 62.62 63.71 65.78 68.83
$61.32 3.70% Supports 60.58 60.10 59.71 59.33 58.85
WTD MTD Outlook
2.54% 3.09% POSITIVE
YTD 12-Month Price Tgt
10.07% 20.85% $63.71

Last week, TRV have made its way past the resistance at $60.85-$61.15 and finished the week
higher at $61.32. The earnings-driven jump has skewed the EMAs upwards, with MACD also started
to flip upwards. It is now on its way to hit its S/T target at $61.41 and later on, to its medium-term
objective at $63.71. Watch out for pullback because last Thursday’s intraday peak was just
meagerly close to the short-term objective. Pullbacks could be used as re-entry point for longs.

4 .DJI 12,505.99 (+52.45 ● +0.42%) .SPX 1,337.38 (+7.02 ● +0.53%) .IXIC 2,820.16 (+17.65 ● +0.63%)
 April 25th 2011

Price Performance - as of Apr 21st 2011

Code Last Dy WTD MTD YTD 12-Mos
AA 16.97 1.98% 2.72% -3.91% 10.27% 26.36%
AXP 47.11 0.23% 1.86% 4.23% 9.76% 2.15%
BA 75.44 0.49% 3.91% 2.04% 15.60% 4.16%
BAC 12.31 0.33% -3.98% -7.65% -7.72% -30.96%
CAT 109.42 1.05% 2.06% -1.73% 16.83% 60.70%
CSCO 16.94 0.06% -0.53% -1.22% -16.26% -37.10%
CVX 108.13 0.30% 1.78% 0.60% 18.50% 32.77%
DD 55.91 0.98% 1.86% 1.71% 12.09% 40.34%
DIS 42.27 0.55% 1.81% -1.90% 12.69% 14.74%
GE 19.95 -2.21% -0.45% -0.50% 9.08% 5.78%
HD 37.80 -0.37% -0.97% 2.00% 7.82% 7.29%
HPQ 40.99 0.24% 1.81% 0.05% -2.64% -21.13%
IBM 168.28 2.14% 1.25% 3.19% 14.66% 30.45%
INTC 21.46 0.23% 8.66% 6.34% 2.04% -6.04%
JNJ 64.07 -0.50% 5.80% 8.14% 3.59% -0.36%
JPM 44.68 0.27% -0.47% -3.08% 5.33% 4.93%
KFT 33.38 -0.54% 0.06% 6.44% 5.93% 12.77%
KO 67.88 0.04% -0.19% 2.32% 3.21% 27.00%
MCD 76.91 -1.90% -0.61% 1.08% 0.20% 8.95%
MMM 93.92 0.17% 1.19% 0.45% 8.83% 5.92%
MRK 34.04 0.00% -1.36% 3.12% -5.55% -2.85%
MSFT 25.52 -0.93% 0.59% 0.51% -8.56% -16.44%
PFE 19.79 -2.94% -3.60% -2.56% 13.02% 18.36%
PG 63.27 -0.71% -1.42% 2.71% -1.65% 1.79%
T 30.68 1.83% 0.10% 0.23% 4.42% 17.73%
TRV 61.32 3.70% 2.54% 3.09% 10.07% 20.85%
UTX 87.10 1.40% 4.37% 2.89% 10.65% 16.21%
VZ 36.91 -2.33% -2.48% -4.23% 3.16% 27.72%
WMT 53.58 -0.20% 0.06% 2.94% -0.65% -0.11%
XOM 86.36 0.83% 2.46% 2.65% 18.11% 27.43%

5 .DJI 12,505.99 (+52.45 ● +0.42%) .SPX 1,337.38 (+7.02 ● +0.53%) .IXIC 2,820.16 (+17.65 ● +0.63%)
 April 25th 2011

Analysts' Upgrades & Downgrades

Code House Ratings PT
AXP Nomura Securities Neutral -
AXP FBR Capital Market Perform $50.00
UTX FBR Capital Market Perform $83 $90
UTX JP Morgan Chase Overweight $87 $95
UTX Citigroup Hold $89 $91
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 403K 390K 416K
21-Apr 10:00 AM Leading indicators Mar 0.4% 0.2% 1.0%
21-Apr 10:00 AM Philly Fed Apr 18.5 35.5 43.4

US Economic Calendar
Date Time Report Period Actual Forecast Previous
25-Apr 10:00 AM New home sales Mar 290K 250K
26-Apr 9:00 AM Case-Shiller home prices Feb -1.0%
26-Apr 10:00 AM Consumer confidence Apr 65.0 63.4
27-Apr 8:30 AM Durable goods orders Mar 3.0% -0.6%
27-Apr 8:30 AM Core equipment orders Mar -0.7%
27-Apr 10:00 AM Housing vacancies Q1 14.1%
27-Apr 12:30 PM FOMC statement
28-Apr 8:30 AM Jobless claims 23-Apr 395K 402K
28-Apr 8:30 AM GDP Q1 1.7% 3.1%
28-Apr 10:00 AM Pending home sales Mar 2.1%
29-Apr 8:30 AM Personal income Mar 0.3% 0.3%
29-Apr 8:30 AM Consumer spending Mar 0.5% -0.7%
29-Apr 8:30 AM Core PCE Price Index Mar 0.1% 0.2%
29-Apr 8:30 AM Employment cost index Q1 0.5% 0.4%
29-Apr 9:45 AM Chicago PMI Apr 68.0% 70.6%
29-Apr 9:55 AM Consumer sentiment Apr 70.0 67.5

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.

6 .DJI 12,505.99 (+52.45 ● +0.42%) .SPX 1,337.38 (+7.02 ● +0.53%) .IXIC 2,820.16 (+17.65 ● +0.63%)