Stocks Higher as Corporate Earnings Support; Philly Fed Factory Data Weighs

By Staff,

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Stocks recovered from a mid-morning swoon that briefly sent the Dow into negative territory, as investors take stock of the latest government jobless claims data. Meanwhile, corporate earnings provide support while factory data is weighing on sentiment on the last day of an Easter Holiday shortened trading week.

The Philadelphia Fed's index of current activity fell to 18.5 this month after a March reading of 43.4. Economists had expected the index to fall to 35.5.

First-time claims for state unemployment benefits fell in the latest week but remained above 400,000 for the second straight week, the Labor Department reported. The number of initial claims in the week ending April 16 fell 13,000 to 403,000. This is the first time that claims have remained above 400,000 for two weeks since late January. The consensus forecast of Wall Street economists surveyed by MarketWatch was for claims to fall to 390,000. The average of new claims over the past four weeks, meanwhile, rose by 2,250 to 399,000. This is the highest level since the week ended Feb. 19.

In company news:

British oil major BP PLC ( BP ) said it is suing Halliburton Co. ( HAL ), Transocean Ltd. ( RIG ) and Cameron International Corp. ( CAM ) over their roles in the Deepwater Horizon explosion and subsequent oil spill in the Gulf of Mexico last year, the Wall Street Journal reports.

S&P MidCap 400 constituent Chipotle Mexican Grill Inc. ( CMG ) will replace Novell Inc. (NOVL) in the S&P 500 index, and UTi Worldwide Inc. (UTIW) will replace Chipotle Mexican Grill in the S&P MidCap 400 index after the close of trading on a date to be announced.

Shares of Roche Holding (RHHBY) are keeping moderate gains after its Genentech unit sued a unit of Novartis (NVS) for planning to sell a generic version of AIDS drug Valcyte before Genentech's patent expires, Bloomberg reported. The Novartis unit, Sandoz, reportedly told Genentech last month that it had applied for approval from US regulators to make a generic version of the drug.

In earnings news:

--Apple (AAPL) reported Q2 revenue of $24.67 bln, better than the analyst consensus of $23.38 bln on Thomson Reuters. EPS was $6.40 per share, vs. estimates of $5.37 per share. For Q3, AAPL sees revenue of about $23 bln and EPS of about $5.03 per share. The Street is at $23.8 bln in revenue and earnings of $5.25 per share.

--ITT Educational Services (ESI) says Q1 sales were $$383.2 million, versus forecasts for $383.4

million. It earned $2.91 per share, above the Thomson Reuters mean for $2.53.

--SunTrust (STI) says it earned $0.22 per share in Q1, less items, above the Thomson Reuters mean for $0.14. Sales were $2.16 billion, above estimates for $2.07692 billion.

--UnitedHealth (UNH) reports Q1 EPS of $1.22, better than the Street view of $0.89 per share. Revenue was $25.4 billion, vs. expectations of $24.9 billion.

--McDonald's (MCD) reports Q1 EPS of $1.15, a penny better than the analyst consensus on Thomson Reuters. Revenue was $6.11 billion, ahead of expectations of $6.00 billion.

--Verizon (VZ) reports Q1 non-GAAP EPS of $0.51 compared to $0.48 in the year-ago period and about in line with Street estimates. Revenue of $26.99 billion compares to $26.91 billion a year ago. The company says it is on track to meet revenue and earnings objectives.

--JetBlue (JBLU) says it earned a penny per share in Q1, matching estimates. Operating revenues were $1 billion, about in line with the Thomson Reuters mean for $1.00138 billion.

--Southwest Airlines (LUV) says it earned $0.03 per share, less items, in Q1, meeting

forecasts. Total operating sales were $3.1 billion, about in line with estimates for $3.08516 billion.

Commodities are higher. June gold contracts are up $6, or 0.38%, to $1,505 an ounce while May crude oil contacts are up 0.05%, or $0.06, at $111.50 a barrel.

In energy ETFs, the United States Oil Fund (USO) is down 0.01% to $44.22 and the United States Natural Gas fund (UNG) is up 0.99%, to $11.27.

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.11% at $146.66. Market Vectors Gold Miners (GDX) is up 0.84% to $62.62. iShares Silver Trust (SLV) is up 1.79% to $44.89.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing Commodities
Referenced Stocks: BP , CAM , CMG , HAL , RIG

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