U.S. stocks are higher this morning, bolstered by promising news
out of Greece, and a round of upbeat earnings reports from several
major U.S. players. Investors are celebrating news that Greece has
finally agreed to a second rescue plan to prevent a widespread
European contagion. Now the focus is once again on the U.S., as a
Wall Street Journal
report suggested that President Barack Obama and House Speaker John
Boehner are close to reaching a settlement on the domestic debt
situation. Meanwhile, with no major economic reports on today's
agenda, investors are looking for positive cues from the day's slew
of earnings. Amid this backdrop, futures on all three major indexes
are pointing slightly higher.
Dow heavyweight General Electric Company (GE - 19.16) boasted a
21.6% rise in profit, as demand increased for its heavy jet engines
and electric turbines. More specifically, second-quarter profit
arrived at $3.69 billion, or 35 cents per share, compared with
$3.03 billion, or 28 cents per share, a year earlier. Excluding
items, GE's second-quarter profit was 34 cents per share,
surpassing analysts' predictions for 32 cents per share. Revenue
fell 3.5% to $35.63 billion, due to the company's sale of its
majority stake in NBC Universal. This figure also topped analysts'
estimates, which called for revenue of $34.7 billion. Ahead of the
open, GE is trading 0.7% higher.
Dow peer Microsoft (MSFT - 27.09) reported a fiscal
fourth-quarter profit of $5.87 billion, or 69 cents per share -- up
30% from its year-ago earnings of $4.52 billion, or 51 cents per
share. Revenue, meanwhile, climbed 8.3% to $17.37 billion.
Analysts, on average, had expected the blue chip to record a profit
of 58 cents per share on sales of $17.23 billion. However, while
its Xbox unit saw revenue grow a record 30% to $1.5 billion, sales
of Windows fell for a second straight quarter.
Schlumberger Limited (SLB - 90.96) said this morning that its
second-quarter net income rose 64% to $1.34 billion, or 98 cents
per share, up from $818 million, or 68 cents, a year ago. Earnings
from continuing operations were 87 cents per share, while revenue
increased to $9.62 billion. Both figures exceeded analysts'
predictions for a profit of 85 cents on $9.19 billion of revenue.
SLB attributed the positive results to strong worldwide growth, as
all of its product groups posted double-digit revenue rises. Ahead
of the open, the oil issue is up over 2%.
Advanced Micro Devices (AMD - 6.50) said it swung to a profit of
$61 million, or 8 cents per share, in the second quarter, compared
to a loss of $43 million, or 6 cents per share, a year prior. On an
adjusted basis, AMD said it earned 9 cents per share, beating the
Street's forecast by a penny. Revenue for the quarter came in at
$1.57 billion -- down from its year-ago revenue of $1.65 billion,
and just shy of analysts' projections for sales of $1.58 billion.
Looking ahead, the company said it expects revenue to grow 8% to
12% sequentially -- or to a range of $1.73 billion to $1.76
billion. Analysts, on average, recently forecast third-quarter
sales of $1.7 billion.
For its second quarter, SanDisk Corp. (SNDK - 41.57) reported
net income of $248 million, or $1.02 per share, compared to a
profit of $258 million, or $1.08 per share, a year earlier. On an
adjusted basis, SNDK earned $278 million, or $1.14 per share, on
record revenue of $1.37 billion. The results handily topped Wall
Street's expectations for a per-share profit of 99 cents on sales
of $1.34 billion.
Today's earnings docket will feature reports from Caterpillar (
), Honeywell (
), Verizon Communications (
), Xerox (
), and Reynolds American (
). Keep your browser at
for more news as it breaks.
There are no major economic reports scheduled for today.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,433,309 call contracts traded on Thursday, compared to
817,220 put contracts. The resultant single-session put/call ratio
docked at 0.57, while the 21-day moving average remained at
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Asian markets ended higher today, lifted by news of an aid
package for Greece worth 109 billion euros. In fact, euro zone
heads of state pulled together a plan to prevent the further spread
of the debt crisis, with the European Financial Stability Facility
(EFSF) now empowered to lend money to governments and intervene in
secondary markets. Traders cheered these major developments, but
the gains were relatively modest in mainland China, where concerns
about slower economic growth continue to linger. By the close, Hong
Kong's Hang Seng added 2.1%, South Korea's Kospi and Japan's Nikkei
added 1.2% apiece, and China's Shanghai Composite tacked on
Banks are leading the gains in Europe, as traders breathe a sigh
of relief over the comprehensive bailout plan cobbled together by
euro-zone leaders. However, the optimism has been somewhat muted by
a downbeat reading from the IFO business climate index, as well as
a warning from Fitch that the Greek bailout plan constitutes a
restrictive default. At last look, the French CAC 40 and London's
FTSE 100 are both 0.9% higher, while the German DAX is up 0.6%.
Currencies and Commodities
Crude futures have continued to blaze a steady path higher,
fueled by upbeat news about the Greek debt situation, as well as
Thursday's announcement that the IEA would not be releasing
additional stockpile reserves. Amid this backdrop, crude is trading
0.1 point, or 0.1%, higher, at $99.27 per barrel. Elsewhere, the
dollar has gained ground against its rivals -- specifically the
euro -- as investors have moved past the Greek debt situation, to
focus on other issues in the euro zone. Ahead of the open, the U.S.
dollar index is up 0.07 point, or 0.1%. Finally, gold futures are
also trading higher this morning, up 10.2 points, or 0.6%, to hover
around $1,597.20 an ounce.
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