The Dow Jones Industrial Average (DJIA) has bounced back from heavy losses on the open, as Wall Street comes to grips with a slower U.S. economic recovery. While the Dow's current gain of about 13 points is nothing to write home about, it's considerably better than the triple-digit loss the DJIA suffered earlier in the session. Helping to bolster sentiment on Wall Street, manufacturing in the Chicago region improved more than expected, while consumer confidence slipped less than economists were expecting. The DJIA is currently battling with resistance at the 10,500 level, which is also home to the blue-chip barometer's 20-week moving average. The Dow has not closed a week above both these technical hurdles since mid-May. Turning to the S&P 500 Index (SPX), bullish investors might consider a second weekly close above 1,100 since mid-June a victory.
Taking a closer look at today's economic news, U.S. second-quarter GDP rose at a 2.4% annualized rate, well below the average 4.4% increase during the prior six months. Despite the deceleration, it was almost in line with economists' predictions for a 2.5% rate. First-quarter GDP was revised higher, to an annualized rate of 3.7%, from the prior estimate of a 2.7% increase.
Elsewhere, the Chicago purchasing managers index rose to 62.3 from 59.1 in June. The rise was unexpected, as economists were expecting manufacturing activity in the region to decline. Readings above 50 indicate overall business expansion.
The University of Michigan/Reuters consumer sentiment index fell to 67.8 in late July from 76 in late June. The July reading was revised higher from a preliminary reading of 66.5. Economists had expected a final July index reading of 67.
Finally, in case you missed this morning's editions of Opening View, or Early Edge, below is a quick wrap-up of what you missed:
Merck & Co. Inc. (MRK) reported second-quarter earnings of 86 cents per share, excluding items and one-time charges, as revenue jumped 92% to $11.35 billion. Wall Street was looking for a profit of 83 cents per share and revenue of $11.45 billion. Merck said it expects adjusted 2010 earnings of $3.29 per share to $3.39 per share, which falls short of the current consensus estimate for a fiscal 2010 profit of $3.37 per share.
Potash Corp. of Saskatchewan (POT) attracted a trio of price-target adjustments this morning, one day after the fertilizer firm hiked its 2010 earnings outlook. UBS raised its price target from $112 to $120 and reiterated its "buy" rating, while Soleil Securities upped its target from $89 to $100. Meanwhile, National Bank took the road less traveled by cutting POT's price target from $127 to $120.
Coventry Health Care Inc. (CVH) reported second-quarter earnings of $1.10, excluding one-time items and a $278 million litigation charge. Revenue for the quarter fell 18% to $2.87 billion. Analysts were expecting earnings of 55 cents per share on revenue of $2.83 billion. For 2010, Coventry sees earnings of $1.72 to $1.87 per share.
Discuss this article:
Post your own comment
More articles:
Athletic apparel issue Lululemon Athletica inc. (LULU) was in the spotlight this morning, as the company reported on its second-quarter numbers. For the quarter, net revenue increased 56% to $152.2 million, while earnings arrived at 30 cents per share. Analysts had predicted a slimmer profit of just 24 cents per share. Meanwhile, LULU also raised its fiscal year guidance to earnings between $1.18 and $1.22 per share -- topping the current consensus estimate for earnings of $1.15 per share. read more...
Electronics retailer Best Buy Co., Inc. (BBY), information technology issue Computer Sciences Corporation (CSC), and homebuilding hotshot Ryland Group Inc. (RYL) were all on analysts' radar this morning. However, to put today's fresh brokerage attention into perspective, we have to consider each stock's technical and sentiment backdrops. read more...
The Dow Jones Industrial Average (DJIA) has pulled back from a quick trip above resistance in the 10,450 region, and is currently sitting on a marginal gain for the session. Stocks rallied early in the session following a round of positive economic data from the Commerce Department, which reported that wholesale inventories rose 1.3% in July - the fastest pace since July 2008. However, Wall Street grew cautious during President Obama's comments at a White House press conference. In remarks, Obama urged Congress to pass a bill that would set up a $30 billion fund to help community banks offer loans to small businesses. "Small businesses are putting off hiring because this bill is stalled," Obama said. read more...
Texas Instruments Inc. (TXN) narrowed its third-quarter guidance after the close on Thursday. The company now forecasts per-share earnings between 66 cents and 72 cents, narrower than the previously predicted range of 64 cents to 74 cents per share. The company sees revenue of $3.62 billion to $3.78 billion, compared with its earlier view of $3.55 billion to $3.85 billion. read more...
With the advent of smartphones, iPads, and e-readers, consumers can hook themselves up to entertainment and information outlets 24/7. Today, we're going to look at three investor opportunities within the media sector. read more...
Today's column looks at the growing preference for puts on Cree (CREE), as well as accelerated call activity on Visa Inc. (V) and XL Group (XL). Each day, 3 Stocks to Watch focuses on stocks seeing heavy options trading and gives you a unique insight into each stock's sentiment backdrop. read more...
Biotechnology behemoth Biogen Idec Inc. (BIIB), commodities concern Kinross Gold Corporation (KGC), and gambling guru Las Vegas Sands Corp. (LVS) were all on analysts' radar this morning. However, to put today's fresh brokerage attention into perspective, we have to consider each stock's technical and sentiment backdrops. read more...
Goldman Sachs Group, Inc. (GS) was hit from across the pond this morning, as the Financial Services Authority (FSA) -- the U.K.'s financial services "watchdog" -- said that it has fined the investment firm 17.5 million pounds, or roughly $27 million dollars on charges related to its fraud investigation in the U.S. This new fine comes on the heels of July's $550 million fine from the Securities and Exchange Commission (SEC). read more...
U.S. stocks are blazing a steady path higher today, fueled by a surprise drop in weekly jobless claims. Specifically, the Labor Department reported this morning that initial unemployment benefit claims fell by 27,000 to 451,000 last week, the second drop in a row, and bringing figures well below the psychologically significant 500,000 level reached two weeks ago. As a result, the Dow Jones Industrial Average (DJIA -- 10,460.19) has climbed 73.18 points, or 0.70%, putting the blue-chip barometer back in the black for 2010. Today's positive momentum has also catapulted the Dow above short-term resistance at the 10,450 level. read more...
Teva Pharmaceutical Industries Ltd. (TEVA) was the focus of some positive brokerage comments this morning when Oppenheimer upgraded the company from "perform" to "outperform." read more...
working... 
