Wednesday, April 14, 2010

Intel & JPMorgan results take stocks higher

Dow gained 53, advancers over decliners 5-2 & NAZ was up 20 on favorable earnings reports. Banks are having another great day as the Financial Index extends its 2 month run.


% Change

The Alerian MLP Index is up a fraction to the 313s & the REIT index is up pocket change after yesterday's big gain. Junk bond funds are inching higher to new 2 year highs & correspondingly lower yields with narrower spreads over the 10-year Treasury bond. The yield on the 10-year Treasury bond rose 2 basis points to 3.83%, in the higher end of its recent zone.

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index - 2 weeks

On a quiet day in trading, oil & gold managed modest rebounds after recent selling.

CLK10.NYM...Crude Oil May 10...84.33 ...Up 0.28

GCJ10.CMX...Gold Apr 10...1,154.20 ...Up 1.40

Photo: Bloomberg

JPMorgan (JPM), a Dow stock, is the first big bank to report earnings for Q1 & did well as trading gains helped offset consumer loan losses. However, JPM again added to its reserves during Q1 for failed loans, but investment banking division & other businesses enabled it to more than overcome the ongoing weakness in lending. Jamie Dimon, CEO, said, "We believe these improvements will continue and are hopeful they will gather momentum, resulting in a strong recovery." JPM earned 74¢ per share, easily topping analysts' expectations of 64¢ as revenue rose 5% to $28.2B. The stock rose 1.28 to 47.15 breaking into to new recent high territory.

JPMorgan Profit Rises 55% on Trading Revenue, Beating Analysts' Estimates

JPMorgan --- 2 years

Photo: Bloomberg

Intel (INTC), another Dow stock, said Q1 revealed a surprising & encouraging trend, companies are finally starting to upgrade their laptops. That's important because corp spending on personal computers has been one of the last parts of the technology world to thaw. However, they pointed out that many companies are buying PCs again because it's simply less expensive than hanging on to older machines that need frequent maintenance. That was key in helping Intel's net income nearly quadruple in Q1. EPS rose to 43¢, beating estimates of 38¢ & sharply ahead of 11¢ last year. Revenue jumped 44% to $10.3B. INTC now predicts a gross profit margin of 62-66% of revenue in 2010, up from previous guidance of 58-64% & they're are talking about this qtr being the best in history for INTC. The stock gained 6¢.

Intel’s Forecast Shows Rebound in Technology Spending

Intel --- 2 years

All is not well in the world of finance. Morgan Stanley (MS), which once ran the biggest property-investment arm among investment banks, expects to lose $5.4B (61% of its $8.8B global fund in 2007) in that fund. However, there are expectations that MS can recover $3.4B of the loss from improving markets. MS was up 58¢ to 31.06.

Morgan Stanley Said to Have Lost 61% of $8.8 Billion Global Property Fund

Morgan Stanley -- 2 years

Simon Property (SPG) revised its offer for General Growth Properties (GPP) by pledging to invest $2½B in a reorganization & match the terms of a bankruptcy exit plan led by Brookfield Asset. SPG said the plan is more favorable to GGP shareholders because it doesn’t include the issuance of warrants. GGP would emerge from bankruptcy as an independent company under both plans. Real estate represents hard assets, land & property, understood by many investors. SPG fell 25¢ to 87.93 & GGP was up 3¢ to 16.18

Simon Offers to Invest $2.5 Billion in General Growth

Simon Property --- 2 years

General Growth Properties - 2 years

Bulls were encouraged by the 2 earnings reports from Dow companies. They're back in charge & want to make 11K a new floor for the Dow. However more earnings are coming. And Greek debt problems drone on with no resolution.

Dow Jones Industrials --- 2 weeks

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