by Sam Collins 04/25/08
More than 200 stocks reported earnings yesterday and investors liked what they saw -- especially in the financial sector.
American International Group (AIG), Citigroup (C) and Travelers (TRV) led the group, up 3.11%, 1.13% and 5.0% respectively. An assurance from Merrill Lynch (MER), up 7.08%, that it had no plans to cut its dividend also helped the sector.
The Nasdaq (NASD) continued to lead the exchange's recovery, with Apple (AAPL), up 3.71%, and Qualcomm (QCOM), up 3.03%, helping propel it to a 1.0% advance.
Even the old-line automakers had a big day as a result of Ford's (F) surprising bounce to profitability. Surprising it was, since analysts predicted that Ford would lose 11 cents. The company attributed its turnaround to successes in foreign markets, chiefly Europe and South America, and the CEO reiterated the company's goal of returning to full annual profitability in 2009. Ford's stock gained almost 12% on the news and it dragged General Motors (GM) along with it for a GM gain of almost 6%.
There were, however, some disappointments, like Starbucks (SBUX), off 10.42%, whose management said that not only would the current quarter not meet its goals but that its fiscal year ending in September would not meet estimates, either.
The market was helped by the Labor Department's report that unemployment benefits fell 33,000 to 342,000, its lowest level in two months. But new home sales continue to plunge to a 17-year low. The Commerce Department estimates that sales in March were down by 8.5%.
At the close Thursday, the Dow Jones Industrial Average (DJI) was up 86 points at 12,849, the S&P 500 (SPX) gained nine points to 1,389 and the Nasdaq (NASD) jumped 24 points to close at 2,429.
Volume on the New York Stock Exchange totaled 1.45 billion shares, with breadth at a positive 3-to-2, and on the Nasdaq (NASD), just over 1 billion shares traded with a positive breadth of 9-to-5.
Crude oil prices (June contract) settled at $116.06 a barrel, off $2.24, and the Amex Energy SPDR (XLE) had its worst day in weeks, down $2.20 to $81.72.
Gold prices (June contract) had an equally bad day, falling $19.60 to end the day at $889.40 per troy ounce. The PHLX Gold/Silver Index (XAU) fell $6.77, landing almost exactly on its 200-day moving average and major support line at $172.61. The XAU must hold there or face the possibility of a major trend break to the downside with the next support at the December low just under $160.
What the Markets Are Saying
All of the major indices have established a channel trend up from the March lows with the strong possibility that they will break above the necklines of the patterns and move higher. But only the Nasdaq (NASD), with yesterday's 24-point move up through 2,413, has actually broken out.
With that, the index has given a strong buy signal with a trading target of 2,670. But in order to achieve that target, the NASD must negotiate the major bearish resistance line at just below 2,500 and the 200-day moving average currently at 2,530.
But volume has been lacking and even yesterday's impressive follow-through pulled just 1.45 billion shares on the New York Stock Exchange and 1 billion shares on the Nasdaq (NASD). Wednesday night's release of the American Association of Individual Investors' sentiment numbers didn't help, either, since the public moved to a bullish 46.67% and bearish 27.5% from last week's more positive reading of 30.37% bullish and 48.69% bearish.
Well, as they say, "It ain't over till it's over" -- and from the looks of it, it's going to be a long time before we see new market highs and the signal that it is over.
Today's Trading Landscape
Earnings to be reported today include:
Advantest (ATE), AMAG Pharmaceuticals (AMAG), American Axle & Manufacturing Holdings (AXL), Brookfield Properties (BPO), Ceradyne (CRDN), Chartered Semiconductor Manufacturing (CHRT), City Holding (CHCO), CNA Surety (SUR), Companhia Vale do Rio Doce (RIO), Concurrent Computer (CCUR), Coventry Health Care (COV), CV Therapeutics (CVTX), Delta Apparel (DLA), Ennis (EBF), Entergy (ETR), Goodyear Tire & Rubber (GT), Grupo Aeroportuario del Pacifico S.A. (PAC), Honda Motor Co. (HMC), Horizon Lines (HRZ), Idexx Laboratories (IDXX), IPC Holdings (IPCR), ITT Corp. (ITT), Johnson Outdoors (JOUT), Lakeland Financial (LKFN), Lance (LNCE), MB Financial (MBFI), Shire PLC (SHPGY), Southwest Gas (SWX), Standard Register (SR), State Bancorp (STBC), TransCanada Corp. (TRP), Viad Corp. (VVI) and Zoom Technologies (ZOOM).
Only one economic report is due, the April University of Michigan Confidence (the consensus expects 63.3).
Goodyear Tire (GT) beat Q1 estimates, reporting 67 cents versus expectations of 47 cents. Microsoft (MSFT) reported a drop in net income for fiscal Q3, but it slightly beat analysts' forecast of 44 cents by reporting one penny higher.
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