Market Recap: Stocks Roar into Expiration Friday
Corporate earnings wowed investors.
The markets felt a sigh of relief with earnings from the financial sector as Citigroup (C) reported first quarter results this morning. The largest U.S. bank by assets posted a second consecutive quarterly loss of -$1.02 per share; however, figures were better than consensus estimates. Banking shares surged even as the bank revealed at least $15 billion in writedowns, according to Bloomberg.
Mr. Practical; however, offered a different perspective on the Buzz:
"Citigroup's earnings report this morning is a confusing mess. Although the bulls love it, any accountant looking through the numbers would notice right away how much the company's financial condition continues to deteriorate and how many tricks it can use to hide that fact. Moody's put them on negative watch and Fitch actually downgraded them."
Nonetheless, Citigroup shares closed +4.49% to 25.11. Other notables included Lehman Brothers (LEH) +4.26% to $45.50, Wachovia (WB) +5.3% to $27.24, Goldman Sachs (GS) +4.5% to $179.93, and Morgan Stanley (MS) added +2.9% to $47.77.
Elsewhere, Caterpillar (CAT) helped move stocks higher. Shares of the global industrial giant jumped after soundly beating estimates for 1Q. Although in the conference call the company said North American sales were weaker than expected, CEO Jim Owens reassured the bulls that the company could weather a "recessionary storm" in the U.S. According to Briefing.com, the company said it could hit earnings targets for the next quarter due in part to a declining dollar and continued investment in infrastructure around the world. CAT shares added +8.5% to $85.28.
Other stocks in the sector moved higher as well. Deere (DE) hit a new 52 week high to close +3.5% to $92.68, as well as Joy Global (JOYG) +5% to $76.71, and Paccar (PCAR) gained +2.6% to $48.67. Check out Toddo's Freaky Friday Potpourri.
The tech sector was boosted by Google (GOOG). Yesterday the company beat estimates by $0.32 per share with 1Q earnings coming in at $4.84. Revenues minus traffic and acquisition costs rose 45.7% on a year-over-year basis to $3.7 bln. GOOG shares surged +20% to $540.87. Other tech notables included Apple (AAPL) +4.48% to $161.40. Research in Motion (RIMM) +4.07% to $123.30, and Baidu (BIDU) gained +10% to $341.50. See Professor Jeff Macke's Lessons From Google's Pop.
Commodities took a steep dive early this morning, but crude oil recovered sharply to hit a new record high. Professor Adam Michael gave his thoughts after the close in commodities:
"The COT reports are out and commercials actually reduced their net short position in crude despite crude closing at near $114 on Tuesday (last day of data in the current report).
The net short position by commercials is about equal to what it was with crude at $90 in December...this is bullish for crude."
Crude oil closed +1.90 to 116.76. Gold fell -22.30 to 917.50. Silver dropped -0.465 to 17.840, and copper lost -2.25 to 391.95.
The dollar index gained +0.277 to 71.958.
Also have a look at Minyanville Editor Andrew Jeffery's column Natural Gas Prices Newest Consumer Headache.
For more Buzz insight, check out Minyanville's Buzz Bits.
Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.
Some bullish trade or investment ideas: SPX, GDX, HUI, XAU, SPY, MTL, MA, MTL, POT, DOX, GOOG, C, WMT, INTC, MER, ATVI, PMCC, XLE, OIH, XLB, LSI, DOX, PMCS, SNDK
Some bearish trade or investment ideas: COF, C, FMCN, WYNN, LVS, VIX, WEN, MTL, AEM, DUG (inverse), gold, dollar
TGIF! Enjoy the weekend!
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