Active broad-market exchange-traded funds at mid-day:
SPDR S&P 500 (
SPY
): +0.3%
PowerShares QQQ Trust, Series 1 (
QQQ
): +1.3%
iShares Russell 2000 Index (
IWM
): +0.2%
iShares MSCI Emerging Markets Index (
EEM
): +0.95%
Financial Select Sector SPDR (
XLF
): -0.5%
Broad Market Indicators
Broad-market exchange-traded funds, including SPY, IWM, IVV and
others, are firmer. Actively traded PowerShares QQQ (
QQQ
) is up 1.3%.
U.S. stocks are higher despite mostly weak economic reports
released earlier. The Labor Department reported weekly jobless
claims spiked up, while factory activity in the Philadelphia region
shrank in July. Sales of existing homes in June also fell to the
slowest pace since October; likewise, the index of leading economic
indicators fell for the month of June. Despite these, stocks are
propped up by strong domestic corporate earnings and some bargain
buying after recent strong sell offs, with tech and energy stocks
leading the rally.
Winners and Losers
Financial -
Select Financial Sector SPDRs (
XLF
) is down 0.6%. Direxion Daily Financial Bull 3X shares (FAS) is
down 2%. Its bearish counterpart, FAZ, is up 2%.
Actives in the sector are in negative territory: Bank of America
(BAC), down 3.9%; Goldman Sachs (GS), down 0.4%; Morgan Stanley
(MS), down 5.4%; and Citigroup (C), down 1.6%.
Morgan Stanley (MS) reported Q2 EPS of $0.28 on revenue of $6.95
billion. The Street was looking for EPS of $0.43 on revenue of
$7.70 billion. These figures include the positive effects of debt
valuation adjustment (DVA). Excluding DVA, net revenues for the
current quarter were $6.6 billion and income from continuing
operations was $0.16 per diluted share.
BB&T (BBT) is up 0.5% and earlier touched near year highs
after it reported Q2 earnings of $0.72 per share, above the Capital
IQ consensus of $0.70. Revenues were $2.47 bln, versus the analyst
estimate of $2.41 mln. Net charge-offs, excluding covered, totaled
1.22% of average loans for the quarter, down from 1.28%
quarter-over-quarter.
Industrial -
Vanguard Industrials (VIS) is up 0.5%; iShares Trust Dow Jones
U.S. Industrial Sector Index Fund (IYJ), up 0.6% and Select Sector
SPDR-Industrial (XLI), up 0.7%.
Georgia Gulf (GGC) is up 15% after the company announced that
PPG Industries (PPG) will separate its commodity chemicals business
and then merge it with Georgia Gulf. The transaction value of
approximately $2.1 billion consists of $900 million of cash to be
paid to PPG, approximately $95 million of assumed debt, about $87
million of minority interest, and Georgia Gulf shares to be
received by PPG shareholders valued at $1.0 billion based on
Georgia Gulf's closing stock price on July 18, 2012. In the
transaction, PPG will transfer related environmental liabilities,
pension assets and liabilities and other post-employment benefits
(OPEB) obligations to the newly merged company.
PPG shares are higher as well, up nearly 6% and hitting year
highs, also gaining support from upbeat earnings. The company
posted net income for the second quarter 2012 of $362 million, or
$2.34 per diluted share. Adjusted earnings per share was $2.36, up
11% versus previous year. The company said this is the eighth
consecutive quarter of record adjusted EPS. Net sales for the
second quarter 2012 were $4 billion. Second quarter 2011 net sales
were $4 billion, and net income was $340 million, or $2.12 per
diluted share.
Energy -
Dow Jones U.S. Energy Fund (IYE) is up 0.4% while Energy Select
Sector SPDR (XLE) is up 0.4%.
Foster Wheeler AG (FWLT) is up 4% after it announced today that
a subsidiary of its Global Engineering and Construction Group has
been awarded a contract by PDVSA Petroleo S.A. for the engineering,
procurement services and construction management for the El Palito
Refinery Expansion Project in Venezuela. The company will execute
the project in consortium with Toyo Engineering Corporation from
Japan and Y & V Ingenieria y Construccion from Venezuela.
Commodities -
Crude was trading higher for the 7th session in a row, and was
up near 3%; natural gas was also up around 0.7%. Among ETFs, United
States Oil Fund (USO) is up 3%; United States Natural Gas Fund
(UNG) is up 1%.
Gold was down around 0.1% while silver was up 1%. Among rare
metal funds, SPDR Gold Trust (GLD) is up 0.2%; iShares Silver Trust
(SLV) is up 0.04%.
Healthcare -
Health Care SPDR (XLV), down 0.1% from year highs; iShares
NASDAQ Biotechnology Index (IBB), down 0.6%; Vanguard Health Care
ETF (VHT), down 0.2% from near year highs; and iShares Dow Jones US
Healthcare (IYH), down 0.06% from near year highs.
Novartis AG (NVS) is higher, up 1.45% after it today reported Q2
earnings of $1.38 per share, versus the Capital IQ consensus of
$1.33. Revenues were $14.3 bln, versus the analyst estimate of
$14.24 bln. The company also said that it is on track to match its
2011 sales performance this year.
Baxter International (BAX) is up 0.4% after it reported Q2
earnings of $1.12 per share, ex one-time items, versus the Capital
IQ consensus of $1.11. Revenues were $3.57 bln, versus the analyst
estimate of $3.53 bln. The company expects Q3 sales growth,
excluding the impact of foreign currency, of 5% to 6%, and EPS of
$1.12 - $1.14, below the Street view of $1.16 EPS. or FY12, BAX
still expects sales growth, excluding the impact of foreign
exchange, of 4% to 5% , versus the revenue growth consensus 2.2%.
The company expects FY12 EPS of $4.50 - $4.56, in line with the
analyst estimate of $4.52 EPS.
Consumer -
ETFs in the space are mixed: Consumer Staples Select Sector SPDR
(XLP), down 0.3% after reaching a new year high of $35.38; iShares
Dow Jones US Consumer Goods (IYK), up 0.5%; and Vanguard Consumer
Staples ETF (VDC), down 0.1%, after also reaching a new year
high.
SPDR S&P Retail (XRT) is up 0.8%; PowerShares Dynamic Retail
(PMR) is flat; and Market Vectors Retail ETF (RTH), up 0.42%, but
off a new year high of $42.87 hit earlier
CVS (CVS) is lower, down 5% after Express Scripts (ESRX) and
Walgreens (WAG) ended their impasse and signed a multi-year
pharmacy network agreement that includes rates and terms under
which Walgreens will participate in the broadest Express Scripts
retail pharmacy network available to new and existing clients. The
companies are not disclosing the terms of the new contract. ESRX is
up 1.3% and has hit year highs, while WAG is up 10.2%.
Pool Corp (POOL) is down 7.7% after it reported Q2 EPS of $1.34,
missing the Street view by a penny. Revenue for the quarter came in
at $757.2 million, which fell short of the $770.09 million
consensus. The company says it is cautious about the outlook for
the second half of the year given the early peak of the 2012 season
coupled with uncertainty in the economic environment, and is
tightening its FY EPS guidance to $1.75 to $1.82 per diluted share
from its most recent guidance of $1.75 to $1.85 per diluted share.
The Street is looking for FY EPS of $1.85.
Power Play -
Technology -
Tech actives are in the green: Apple (AAPL), up 1.13%; Microsoft
(MSFT), up 0.5%; Intel (INTC), down 0.4%; Google (GOOG), up 2.7%;
Cisco (CSCO), down 0.3%; and Yahoo (YHOO), up 0.6%.
Nokia (NOK) is up more than 4%, trimming earlier gains of more
than 13% after it reported a Q2 GAAP loss of EUR 0.38 or $0.47 per
share, almost triple the loss from the same period last year, which
was EUR 0.10 or $0.12 per share. On a non-IFRS basis, Q2 loss was
EUR 0.08 or $0.10 per share, versus the $0.07 earnings per share in
the comparable quarter last year. Despite the steep loss, this was
narrower than the expected $0.09 per share, according to Capital
IQ. Revenues were EUR 7.54 bln or $9.25 bln, down 19%
year-over-year, but still above the analyst estimate of EUR 7.23
bln or $8.87 bln.
IBM (IBM) is up 4% after it reported in yesterday's after-hours
session Q2 non-GAAP diluted EPS of $3.51 per share on revenue of
$25.8 billion. The Capital IQ consensus estimate anticipated EPS of
$3.43 on revenue of $26.277 billion. The company raised full-year
2012 operating non-GAAP EPS expectations to at least $15.10 from at
least $15.00. The Street is at $15.05 per share.
Verizon Communications (VZ) is down 2.7% after it reported Q2
EPS of $0.64, in-line with expectations. Revenue for the quarter
came in at $28.55 billion, about in-line with the $28.56 billion
consensus.
ETFs in the space are also firmer: iShares Dow Jones US
Technology ETF (IYW), up 1.61%; iShares S&P North American
Technology ETF (IGM), up 1.42%; iShares S&P North American
Technology-Software Index (IGV), up 1.65%; and Technology Select
Sector SPDR ETF (XLK), up 1.18%.
SPDR S&P Semiconductor (XSD) is up 2.53% and Semiconductor
Sector Index Fund (SOXX) is up 2.83%
SPDR S&P International Technology Sector ETF (IPK) is
flat.