After negotiations to find a buyer failed, Circuit City will liquidate its U.S. stores. According to court papers filed this morning, the Richmond, Virginia-based company has appointed three companies to liquidate its inventory. The company, which filed for bankruptcy in November, had a deadline of today to find a buyer.
U.S. futures are down this morning after Bank of America (NYSE: BAC) released disappointing figures for the quarter. The country's second-largest bank said net income plunged to $1.21 billion, or 23 cents a share, from $5.26 billion, or $1.16 a share, a year ago. Analysts had been expecting earnings of 41 cents a share.
Meanwhile, Merck (NYS: MRK) said first-quarter income jumped 94% to $3.3 million, or $1.52 a share, from $1.7 million, or 78 cents a share, a year earlier. Excluding a $1.4 billion gain from the AstraZeneca partnership and restructuring charges, Merck posted income of 89 cents a share. Worldwide sales climbed 1% to $5.8 billion, aided by the weak U.S. dollar.
Halliburton (NYSE: HAL) said Q1 earnings rose to $584 million from $552 million, while revenue increased to $4.03 billion from $3.42 billion, a year earlier. Elli Lilly reported earnings of $1.06 billion, or 97 cents a share, up from $508.7 million, or 47 cents. Analysts had expected somewhat better numbers from Lilly.
Despite a week of mixed earnings reports, the Dow, Nasdaq, and S&P 500 surged Friday, each ending the week up more than 4%. This is another big week of earnings reports, with Texas Instruments reporting today after the bell.
U.S. futures are up this morning despite news of another bad quarter from Citigroup (NYSE: C). The financial services giant this morning reported a Q1 loss of $5 billion, or $1.02 per share, following $12 billion in write-downs on mortgage-related securities and leveraged buyout loans. Analysts had expected better figures but the market apparently took heart that they weren't worse.
There were some good earnings reports for the bulls this morning. Dow 30 component Caterpillar Inc. (NYSE: CAT) earned $1.45 per share on revenues of $11.8 billion in the first quarter, beating estimates of $1.33, and projected strong full-year revenues and earnings. The company did foresee continuing weakness in the U.S. economy but remains somewhat upbeat on prospects for the global economy.
Honeywell International Inc (NYSE: HON) said its Q1 earnings rose more than 22% on strong demand from the aviation and commercial construction sectors. Honeywell earned $643 million, or 85 cents per diluted share, compared with $526 million, or 66 cents a share, a year ago. Xerox is also due to report before the markets open.
Google (NASDAQ: GOOG) reported a 30% increase in Q1 profit after the close Thursday, beating expectations by more than 30 cents a share. Its revenues were up 42%, to $5.19 billion, over the same period last year. Google's shares soared 17% in an after-hours "relief rally."
Thursday markets were flat on a day of mixed earnings reports, with Merrill Lynch disappointing, but IBM beating estimates. The Dow Jones industrial average rose 1.22 points or 0.01%; the S&P 500 was up 0.85 point or 0.06%; and the Nasdaq Composite lost 8.28 points or 0.35%.
No economic data are expected today.
Futures eased slightly this morning as the market sought to catch its breath after sprinting higher Wednesday. All indices had strong gains after better-than-expected first-quarter earnings reports from JPMorgan Chase, Coca-Cola Co., and Intel Corp. The Dow industrials finished up 257 points, or 2.08%, the S&P 500 rose 30 points or 2.27% and the Nasdaq Composite closed up 64 points or 2.8%.
IBM (NYSE: IBM) reported very strong Q1 figures after the close Wednesday. The company had income from continuing operations of $2.3 billion, or $1.65 a share, up from $1.8 billion, or $1.21 a share, a year ago. IBM was aided by the weakness of the U.S. dollar, with some 65% of revenue coming from overseas. eBay also had a good quarter, with profit climbing 22%.
However, there was a disappointing earnings report from Merrill Lynch (NYSE: MER) this morning. The company lost $1.96 billion, or $2.19 a share, compared with net income of $2.16 billion, or $2.26 a share, a year ago, after billions of dollars of writedowns related to the subprime crisis. Merrill plans to cut about 4,000 jobs, or 10% of its workforce. Nokia (NYSE: NOK)'s quarterly income rose 25% to 1.22 billion euros, up from 979 million euros a year earlier, but missing analysts expectations of 1.38 billion euros, according to Bloomberg News. Pfizer (NYSE: PFE) also missed analysts' estimates for the quarter, with profit falling 18%.
The U.S. dollar hit another all-time low against the euro, while oil prices hit an all-time high of more than $115 a barrel. According to the U.S. Energy Department, inventories of gasoline fell 5.5 million barrels last week. Related to the ongoing increase in oil prices, Continental Airlines reported a loss for the first quarter, while Southwest Airlines earnings declined. However, American Airlines yesterday posted a smaller-than-expected loss.
In the news today, Yahoo! moves closer to deal with Google on outsourcing search advertising, according to the Wall Street Journal. Google (NASDAQ: GOOG) is expected to release earnings this afternoon.
In economic data, unemployment claims for the week ending April 5 will be released at 8:30 a.m. EST; the Philadelphia Fed report will be out at 10:00 a.m.
U.S. futures are up this morning, buoyed by upbeat news from technology bellwether Intel (NASDAQ: INTC). After the close Tuesday, the world's largest semiconductor company announced higher-than-expected first-quarter revenue of $9.7 billion, up 9% from a year ago. Intel Chief Financial Officer Stacy Smith said the company saw sales increase in all geographic regions, including the United States and Europe.
This morning, JPMorgan Chase & Co (NYSE: JPM) also reported better-than-expected figures. The third largest U.S. bank said Q1 profit fell to $2.37 billion, or 68 cents per share, from $4.79 billion, or $1.34 per share, a year ago. Analysts had expected 64 cents per share.
Stocks closed slightly higher yesterday after a day of mixed economic data and earnings, including the best quarter ever from Schwab (NASDAQ: SCHW), better-than expected-earnings from Johnson & Johnson (NYSE: JNJ), but losses of more than $1 billion from Washington Mutual Inc. (NYSE: WM).The Dow industrials rose 60 points, or 0.49%, the Nasdaq Composite was up 10 points, or 0.45%, and the S&P 500 gained 6 points, or 0.46%.
Oil hit a new record overnight of $114.48, and the dollar plunged to an all-time low against the euro.
Economic data today includes: March consumer price index and housing starts at 8:30 a.m. EST; crude inventories for the week of April 12 are due in at 10:30 a.m.; and the Fed's Beige Book will be released at 2:00 p.m.
In addition to JP Morgan Chase, earnings are due in today from Coca-Cola, Wells Fargo and, after the close, eBay and IBM.
U.S. stock futures were down slightly this morning, reflecting nervousness about economic data and earnings reports due out today.
Stocks fell Tuesday for the second session in a row after disappointing earnings from Wachovia surprised the market. The Dow industrials ended the day down 23 points, the S&P 500 lost 5 points, and the Nasdaq Composite fell by 14 points.
In the news, Delta Air Lines (NYSE: DAL) and Northwest Airlines (NYSE: NWA) announced yesterday that they will combine to form the world's largest airline, with a market value of $17.7 billion. The new airline will be called Delta. United and Continental may be next in line to tie the knot.
In another blow to the ailing airline sector, oil prices rose to an intraday record of more than $112 a barrel Tuesday as the U.S. dollar continued to weaken against other major currencies.
There was evidence of continuing deterioration in the housing market -- according to a report by RealtyTrac for March, U.S. foreclosure filings rose 57% and bank repossessions more than doubled from last year. However, there was some good news from Detroit as Ford announces plans to step up production of the compact Focus by 30% to meet strong demand.
Economic data due out today includes the Producer Price Index, a measure of wholesale inflation, at 8:30 a.m. EST, the Empire State Manufacturing Survey at 8:30 a.m. EST, and the Housing Market Index at 1:00 p.m. EST.
Stock futures were down this morning as Wachovia Corp (NYSE: WB) posted its first quarterly loss since 2001 and cut its dividend. One of the biggest banks in the country, Wachovia reported a loss of $393 million, or 20 cents a share, compared with earnings of $2.3 billion, or $1.20 a year ago. The Wall Street Journal reported that Wachovia is to receive a capital infusion of about $7 billion.
Stocks tumbled on Friday after disappointing Q1 earnings from General Electric (NYSE: GE) and a 26-year low in U.S. consumer sentiment, among other economic bad news. The Dow Jones Industrial Average fell 256.56 points, or 2.04%, the S&P 500 lost 27.72 points, or 2.04%, and the Nasdaq Composite lost 61.46 points, or 2.6%. The Group of 7, who began meetings on Friday, "downgraded their outlook" for the global economy, saying that it may continue to slow.
In the news today, Blockbuster (NYSE: BBI) made an unsolicited bid of
Futures turned lower this morning after a weaker-than-expected earnings report from General Electric (NYSE: GE). The company said first-quarter earnings fell 8% to 44 cents a share, well below analysts' expectations of 51 cents. CEO Jeffrey Immelt blamed the disappointing results on declines in financial services earnings, saying extraordinary disruption in the capital markets in March resulted in an inability to complete asset shares.
Stocks rallied yesterday for the first time in three days, spurred by a drop in weekly unemployment claims and some good news from discount retailers Costco Wholesale (NASDAQ: COST) and Wal-Mart (NYSE: WMT). The Dow Jones industrial average rose 54.72 points or 0.44%; the S&P 500 was up 6.06 points or 0.45%; and the Nasdaq Composite, boosted by Takeda Pharmaceuticals' deal to acquire Millennium Pharmaceuticals, rose 29.58 points or 1.27%.
Stock futures were lower this morning amid fears of weak earnings reports and jitters about oil prices, which continue to rise today.
Stocks fell Wednesday after a lowered outlook from UPS, seen as an economic bellwether, and oil briefly topping $112 a barrel, bringing the Dow industrials down 49 points or 0.4%, the Nasdaq Composite down 26 points or 1.1%; and the S&P 11 points or 0.8% lower.
On the economic calendar today, the weekly jobless claims data for the week ending April 5 is due out this morning at 8:30 a.m. EDT. According to Bloomberg, claims are expected to be around 386,000, and anything above 400,000 will fuel concerns about the weakening of the job market. Investors will also be watching March chain store sales reports. The day began with an upbeat report from Costco (NASDAQ: COST), whose sales rose 7%. Wal-Mart (NYSE: WMT) then reported its same-store sales rose 0.7%, which was below analysts' estimates of 1%, but said it expects better April figures. The company said its inventory in US stores is well managed.
Stock futures are higher this morning as investors await the Federal Reserve decision on interest rates today and some data on housing and inflation. As of 7:50 Dow futures were up 130 and NASDAQ futures were up 18.
The Federal Open Market Committee is scheduled to announce its decision at 2:15 EST. Investors are expecting a cut of as much as a full percentage point -- to 2%.
Housing starts and building permits, due out at 8:30, have likely dipped in February compared to January.
The Producer Price Index, inflation at the wholesale level, is expected to increase, but after the unexpected flat CPI from Friday, we may be in for a surprise.
Goldman Sachs (NYSE: GS) and Lehman Bros. (NYSE: LEH) are also scheduled to report results today and investors will be anxiously looking to gauge the condition of the financial sector generally following the collapse of Bear Stearns. Lehman's shares fell almost 20% Monday amid fears it will be the next casualty of turmoil in the credit markets.
Meanwhile, the Bush administration has been working on two new initiatives aimed at creating more funding for mortgages by relaxing constraints on Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE) and the Federal Housing Administration, according to the Wall Street Journal. The Office of Federal Housing Enterprise Oversight is reportedly close to reducing an excess-capital requirement for Fannie and Freddie, thereby giving them more latitude to buy and securitize loans. There are also moves to allow more people to qualify for mortgages insured by the FHA.
Analysis provided by Eric Buscemi of Theflyonthewall.com.
Here is one metric to consider when trying to assess what the sell-off yesterday meant from a technical perspective. After running a scan of relatively liquid stocks trading on both the NYSE and the NASDAQ exchanges (nearly 6,000 issues), one ratio in particular stood out sharply. A whopping 12:1 stocks (out of 1,760 issues) broke down through their ten-day moving averages yesterday, as opposed to breaking out above them.
While this measure can easily reverse on a major rally, it is one more warning that the technical picture has deteriorated even further than the general averages suggest. All this could change on a positive interpretation of Federal Reserve news, of course, but it would appear to require positive news for a major correction to be avoided at this stage.
Analysis provided by Eric Buscemi of Theflyonthewall.com.
Palm, Inc. (NASDAQ:PALM) warned last night that it would have a big revenue and earnings miss for the quarter. Palm expects to report revenue of $390 million to $395 million, down from its previous forecast of $430 million to $450 million.
During the summer, Motorola, Inc. (NYSE:MOT) was beaming about the prospects of Q, its wireless data device. Motorola said it was going to ramp production of Q going into the holiday season. Verizon Communications, Inc. (NYSE:VZ) appears to be the force behind Q while Cingular Wireless -- a joint venture between AT&T, Inc. (NYSE:T) and BellSouth Corp. (NYSE:BLS) -- has been pounding the airwaves with BlackJack from Samsung Electronics. Palm blamed the miss on the new Treo 750 smartphone, which supposedly had certification problems in the U.S. market.
Motorola has been having great success the last few years increasing its presence with U.S. wireless carriers. Why should Verizon and Cingular carry Treo when they can get a whole host of products from suppliers like Motorola and Samsung?
Palm investors better do their homework and make sure this was a temporary miss due to the certification process, as Palm management says, and not something more.