"The Corporate Earnings Boogie"
Dow 13,029 (+.50%) S&P 1,379 (+.12%)
Stocks have gone up and down so much recently we’ve been suffering daily nosebleeds. But the Dow Jones Industrial Average finally reached its first weekly gain in April, finishing the week up 1.4% when all of the recent dips and spikes were said and done. In this early portion of the second quarter, corporate earnings have been the dominant theme over the last few trading sessions, yanking the stock index back and forth. Today’s positive corporate earnings from key blue chip companies, combined with surprisingly strong econ news out of Europe, led the Dow up a comfortable 65 points after yesterday’s 69-point loss.
Earnings from Blue Chip stocks Microsoft, General Electric and McDonald’s beat expectations
Microsoft (MSFT) led the way with the top performance in the Dow, leaping 4.6% after the software behemoth reported results on Thursday evening above Wall Street’s estimates. Bill Gates’ baby cited increased Windows and Office product sales for the performance. General Electric (GE) did see a 12% decline in earnings, but the first quarter number was still ahead of analysts’ forecasts. GE stock advanced 1.15% on the news that profit growth was triggered by production in its energy-infrastructure division. And finally, deep-fried shares of McDonald’s (MCD) bounced 0.69% after sales increased at a faster pace than expected. Each of these companies is large enough to make a splash in the trading floor kiddie pool and with positive quarterly earnings news from each, investors jumped in too.
Positive economic data from Germany and United Kingdom surprise economists
Okay – the following news was just as shocking for us to write as it is for you to read right now. For over a year, Europe’s debt crisis has pushed the continent into a recession, as gross domestic product (GDP) shrinks, and investors refuse to lend to the countries they fear cannot pay them back – the result has been months of bearish economic news. But this morning, positive headlines from two of the region’s stronger economies provided a unique moment of stability for traders to temporarily cherish. In Germany, business confidence rose in April for the sixth straight month and in the United Kingdom, retail sales increased significantly – both against economists’ expectations. While serious concerns over the financial state of the PIIGS nations of the Eurozone fundamentally remain, the news that two of the “healthier” economies are making progress was a (momentary) relief.
“Week in Review”
Like some kind of baller hotel-style breakfast buffet, the past week featured a rich variety of headlines for investors to plop spoonfuls of on their plates. And with a total mix of extreme results, markets were some of the choppiest we’ve seen all year. Strong retail sales stats for March powered the Dow up to start the week, then weekly jobless claims, regional manufacturing and previously owned homes sales econ data disappointed later. Verizon (VZ), Citi (C), Bank of America (BAC) and Morgan Stanley (MS) notably beat earnings expectations midweek, but slow growth from tech-giants IBM (IBM) and Intel (INTC) dropped markets earlier. And Spain and Italy are still keeping investors tossing and turning at noche, yet Spain did manage a strong bond auction this week despite European debt fears flaring up. Corporate earnings, US econ data and international concerns were all over the place, leaving us feeling like we just stepped out of a week-long Avicci rave.
Next Week:
- The French Presidential election over the weekend – will President Sarkozy be unseated and how will Le stock market react on Monday?
- Apple (AAPL) stock was down 2.5% today, 5.3% this week and has fallen in 8 of the last 9 trading sessions, turning the tech-heavy Nasdaq stock index negative today – are investors “correcting” (reevaluating) its market value? Does it still have further to go? Will they buy the stock back at this discount next week? Apple reports earnings next Tuesday….
- Economic data on manufacturing and housing – how will they affect the Federal Reserve‘s upcoming monetary policy decisions?
- Week #3 of earnings season, baby: US Steel (X), Boeing (BA), Xerox (XRX), Apple (AAPL)….
© 2012 MarketSnacks
Wow great summary of a phenomenal earning week. Where do you guys get all of this data from?