VerySmartInvesting: Markets shoot up on strong earnings

Wednesday, April 20, 2011

Markets shoot up on strong earnings

Dow jumped 163, advancers ahead of decliners 8-1 & NAZ gained 43. While higher, banks stocks are having only muted gains.

S&P 500 FINANCIALS INDEX

Value 215.67

Change 0.57 (0.3%)

The MLP index was up only pennies in the 279s & the REIT index was up a small fraction in the 237s. Junk bond funds were little changed & the Treasury market was quiet. Oil rose for a 2nd day ahead of the weekly gov report on supply levels, amid signs that recovery in the world’s biggest economy is supporting fuel consumption. Gold rose above $1,500 to another record as a weaker dollar & concern about debt & faster inflation spurred demand for an alternative investment.

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month 0.06%

U.S. 2-year     0.66%

U.S. 10-year    3.38%

CLM11.NYM ...Crude Oil Jun 11 ...109.39 ...1.11 (1.0%)
GCJ11.CMX .....Gold Apr 11 ........1,503.00 ...8.50 (0.6%)

Abbott (ABT), a Dividend Aristocrat, Q1 income fell 14% on restructuring & acquisition costs among other expenses.  EPS was 55¢, but excluding one-time items it earned 91¢ (ahead of forecasts of 90¢). Last year ago EPS was 64¢, or 81¢ excluding one-time costs. Revenue grew 17% to $9.04B.   Revenue was led by higher sales of the company's best-selling product Humira, which increased 18% to $1.65B. ABT backed up its previous 2011 profit outlook. Excluding 84¢ in one-time costs, the company expects to earn $4.54-4.64 in 2011 & analysts are forecasting $4.60. The stock was up 26¢ after a nice run in the last 3 months.

Abbott 1Q profit falls 14 percent on chargesAP

Abbott Laboratories (ABT)

United Technologies (UTX), a Dow stock, said Q1 profit jumped 17% as revenue rose & orders climbed for the industrial elevator, aerospace & heating & cooling businesses. EPS rose to $1.11 from 93¢ last year, ahead of expected EPS of $1.07. Revenue rose 11% to $13.3B. Guidance for 2011 was raised to $5.25-5.40 (analysts are expecting $5.36). CEO Louis Chenevert credited the stronger global economy for strength in UTX markets. The company expects 2011 revenue to be $57B, the high end of its previous guidance in Dec (analysts expect revenue of $57.2B). The stock rose $4 to the 86s, a big plus for the Dow.

United Tech's 1Q profit up on stronger revenueAP

United Technologies Corporation (UTX)

The bulls are excited & having a good day as the sun enters Taurus. After trading flat for a few months, Dow is at a new 2½ year high, very bullish. But problems are lurking. Gas at the pump rose to $3.84 yesterday & somewhat related, fighting continues in Libya. Also, banks, traditional market leaders, are not leading. Most important, gold is at new record levels. But bigger picture, bulls have taken control of the markets again.

Dow Industrials (INDU)