Eddie Murphy and his lady friends are very content with the day’s positive earnings reports
Dow: 13,552, +128 (+0.95%) S&P 500: 1,455, +15 (+1.03%)
Whoa – way back to QE3? The Dow hasn’t jumped triple-digits since the Federal Reserve announced its stimulus decision last month? Today’s markets were sprinkled with sweet corporate earnings & served a dash of the hard stuff – high profile resignations on Wall Street. While financial bloggers (um, this is an esteemed “website,” thank you very much) speculated about the personal clashes on the Citigroup board of directors that led to CEO’s Vikram Pandit’s exit today, stock pickers bought the market as American corporate earnings keep on beating expectations. Two straight days of positive markets were further boosted by a poll on homebuilders’ confidence that reached its highest level in 6 years (the housing market’s alive, baby). The Dow climbed 127 points today, the biggest gain since the market response to the Fed’s mid-September announcement.
Vikram Pandit abruptly resigns as CEO of Citigroup
The CEO of Citigroup (C), the 3rd largest US Bank by assets, resigned today. Vikram Pandit took over in December 2007 and the stock price has been vaporized by over 89% – but the business environment wasn’t rosy during his time (Lehman collapse, financial crisis, Brett Favre retirement limbo…). Pandit’s credited though for cutting costs & selling off unwanted assets, and he turned big profits in 2010 and 2011.
But the Indian-born and Columbia-educated boss was utterly embarrassed this year when US regulators (the Fed) denied his attempt to return more of the company’s cash to shareholders and they failed the Fed’s stress test in March…then Citigroup’s shareholders voted down his executive compensation proposal. When the CEO tried to write himself a $15-million dollar bonus and got stopped by angry shareholders, the Board wanted to put him in a cardboard box and leave him on a random front stoop – straight up Benjamin Button style. $15 mill two years after a bailout, when the stock’s down 90%? Citi’s image and stock were slammed. He quit today because of internal squabbling and drama with the board of directors. Stockholders welcomed the exit, and the stock was up over 1%.
Earnings roll with some big gains by J&J, Goldman, and Domino’s
Put on the big boy pants, earnings season is kicking it up a notch. Earth’s largest healthcare product creator Johnson & Johnson (JNJ) rose over 1% after its earnings beat analyst forecasts thanks to rising demand for medical tools. Goldman Sachs (GS) shares fell slightly even though the 5th biggest US bank’s earnings & revenues topped expectations and they increased their quarterly dividend to shareholders. Coca-Cola (KO) earnings matched forecasts, but the stock fell because sales are slowing in the huge market of China. As for the fun stuff, Domino’s Pizza (DPZ) popped 8% (must be all those fancy new ingredients) and toy-maker Mattel (MAT) added 5% after both earnings reports topped estimates. These types of earnings performances ain’t too shabby and the fact that analysts’ expectations are super low this quarter is partially why markets rocketed up today.
Tomorrow:
- Apple sent out invitations for a product release scheduled for two weeks from now. The invitations were actually printed on tiny fortune cookie paper…very clever Tim Cook. Analysts expect the debut of the smaller iPad, the mini.
- More earnings…Bank of America, eBay, American Express, Pepsi Co
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