Opening View: DJIA Set for Triple-Digit Surge as Street Applauds Tech Earnings

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The blue chips gained ground on Tuesday, thanks to a solid earnings showing from Johnson & Johnson (JNJ) . Today, however, it's the tech sector's turn to blaze the trail higher, with Intel Corp. (INTC) and Yahoo! (YHOO) among the few industry bigwigs basking in the early earnings spotlight. In addition, telecom titan AT&T (T) is set to explore the black after narrowly surpassing analysts' per-share profit projections, though fellow Dow diva IBM Corp. (IBM) has given up last night's after-hours lead as traders digest its revised full-year guidance. Nevertheless, the Dow Jones Industrial Average (DJIA ) is trading about 154 points above fair value, while the broader S&P 500 Index (SPX ) is set to open with a healthy 17.5-point advance.

Dow, S&P and Nasdaq futures

In equities news, Intel Corp. (INTC - 19.86) said it earned 59 cents per share, excluding items, in the first quarter, surpassing analysts' estimates for a profit of 46 cents per share. Meanwhile, revenue jumped 25% to a record $12.85 billion, blowing past INTC's own guidance for sales of $10.8 billion to $11.6 billion. The company also forecast current-quarter revenue of $12.3 billion to $13.3 billion, compared to the Street's predictions for revenue of $11.87 billion. President and CEO Paul Otellini attributed the solid earnings showing to "double-digit annual growth in every major product segment and across all geographies." At last check, INTC is set to open more than 6% higher.


Elsewhere, fellow blue chip IBM Corp. (IBM - 165.40) reported a first-quarter profit, excluding items, of $2.41 per share, surpassing the Street's estimates for earnings of $2.30 per share. In the same vein, revenue jumped a year-over-year 8% to $24.6 billion, edging past analysts' forecast for sales of $24 billion. Furthermore, IBM said it now expects to record full-year earnings, excluding items, of no less than $13.15 per share, compared to its previous per-share target of at least $13. Nevertheless, the shares of IBM are poised to open about 1.1% lower, with some analysts attributing the pre-market dip to disappointment that the firm didn't up its guidance even more.

Meanwhile, Yahoo! Inc. (YHOO - 16.12) reported a first-quarter profit of $223 million, or 17 cents per share, down from its year-ago earnings of $310 million, or 22 cents per share. Excluding items, YHOO banked a profit of 19 cents per share, surpassing analysts' consensus estimate of 16 cents per share. Net revenue of $1.064 billion also came in stronger than expected, topping Wall Street's forecast of $1.055 billion. Ahead of the bell, YHOO is positioned for a 3.6% jump right out of the gate.

Finally, AT&T (T - 30.31) unveiled a first-quarter profit of $3.41 billion, or 57 cents per share -- up 39% from the year-ago period. Excluding items, T earned 58 cents per share, narrowly surpassing analysts' expectations for 57 cents per share. However, Ma Bell's quarterly revenue of $31.25 billion fell just short of the consensus estimate for $31.26 billion. The telecom titan added a record 2 million wireless subscribers during the first quarter, and -- despite new competition from fellow Dow component Verizon -- iPhone activations climbed to 3.6 million. At last check, T is set to open with a 1.5% gain.

Earnings Preview

Today's earnings docket will feature reports from Apple Inc. ( AAPL ), American Express ( AXP ), EMC Corp. ( EMC ), United Technologies (UTX), E*TRADE Financial ( ETFC ), and Freeport-McMoRan Copper & Gold ( FCX ), just to name a few. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Today we'll see March's existing-home sales report, as well as the Energy Department's weekly crude inventories report. The holiday-shortened week will end tomorrow, with weekly jobless data, the Conference Board's index of leading economic indicators, and reports on Philadelphia-area manufacturing on the docket.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,199,211 call contracts traded on Tuesday, compared to 779,755 put contracts. The resultant single-session put/call ratio docked at 0.65, while the 21-day moving average jumped to 0.59.

NYSE and Nasdaq summary

Volatility indices

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Overseas Trading

Asian stocks ended in the black today, with Japanese equities rising in spite of data showing the first decline in exports in 16 months in March. Toshiba Corp. led the advancers, after a newspaper reported that Apple Inc. ( AAPL ) has selected the firm as its exclusive Japanese supplier of liquid crystal panels. By the close, the Shanghai Composite added 0.3%, Hong Kong's Hang Seng rallied 1.6%, and Japan's Nikkei tacked on a healthy 1.8%. South Korea's Kospi, meanwhile, soared 2.2% with help from a sector-wide rally among steelmakers.

European markets were also trading notably higher, as a solid round of earnings from the U.S. lifted tech stocks. In Paris, carmaker PSA Peugeot Citroen soared more than 4.5% after reiterating its full-year outlook, while makeup mogul L'Oreal SA added nearly 3% after reporting a 9.3% increase in first-quarter sales. In the U.K., mining stocks were fueling the bullish momentum, after J.P. Morgan Cazenove waxed optimistic on Xstrata PLC. At last check, London's FTSE has added 2.3%, France's CAC 40 has advanced 2.5%, and Germany's DAX has soared close to 2.8%.

Overseas markets

Currencies and Commodities

The greenback has ticked lower this morning, with the U.S. dollar index down almost 0.9%. Elsewhere, crude futures have powered higher in early trading, thanks to reports of escalating post-election violence in Nigeria, Africa's leading oil producer. At last check, the May-dated contract has added 1.2% to flirt with $109.54 per barrel. Gold futures, meanwhile, have extended their climb above the $1,500-an-ounce marker. In pre-market action, the front-month contract has added 0.6% to trade at $1,504.50 an ounce.

Currencies and commodities

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This article appears in: Investing , Options

Referenced Stocks: AAPL , AXP , EMC , ETFC , FCX

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