Strong earnings by JP Morgan, Goldman Sachs, and other companies
are keeping stocks positive ahead of testimony by Federal Reserve
Chair Janet Yellen later today.
S&P 500 futures are up 0.1 percent after rising for the last
hour. Europe is down slightly, with the higher-risk countries of
Italy and Spain once again leading the declines. Asia was strong
overnight, as Japan, Hong Kong, Seoul, and Mumbai all gained at
least 0.5 percent.
The S&P 500 continued its uptrend yesterday as investors
reacted to strong earnings from Citigroup and prepare for more
quarterly results today. Transportation stocks led the gains and
broke out to new highs, which gives the bulls reason to expect more
upside from the broader market.
Today's big event is Yellen's appearance on Capitol Hill at 10 a.m.
ET. Retail sales and the New York Fed's Empire manufacturing index
also come out at 8:30 a.m. ET. Other potentially important economic
headlines follow tonight when China reports gross domestic product
and industrial production.
But the real focus today is on earnings, with JP Morgan and Goldman
Sachs climbing at least 2 percent on better-than-expected results.
Dallas-based lender Comerica also surged 8 percent after beating
estimates, while footwear maker Wolverine Worldwide gained 6
percent on strong sales and profit. Other important companies
including Intel, Yahoo, and CSX follow after the closing bell
today. Bank of America and U.S. Bancorp are on deck for tomorrow
Mergers and acquisitions are in the news as well as cigarette
company Reynolds American buys Lorillard for $27.4 billion and
chemical maker Albemarle gobbles up Rockwood for $6.2 billion. LO,
which had already been climbing on deal speculation, is down 5
percent, but ROC is poised for a gain of at least 13 percent on the
Gains have been spread across most sectors in recent months, but
the biggest trend has been strength in technology as investors look
for increased spending on computers and semiconductors. Our
market scanner also shows strength recently in Latin American
banks, basic metals and coal-mining stocks. Housing and utilities
Foreign-exchange markets are painting a modestly bullish picture as
the safe-haven Japanese yen retreats. Oil fell about 1 percent and
copper declined 0.25 percent. Gold and silver are bouncing about
half a percent, while agricultural products are lower.
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