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Stocks bounce in earnings deluge

By: optionMONSTER
Posted: 1/21/2014 8:12:00 AM
Referenced Stocks: SPX

Stocks are higher this morning, bouncing from a two-day pullback as investors prepare for a heavy slate of earnings.

S&P 500 futures are up about one-third of a percent, matching Europe's gains. Asia was mostly positive overnight as Shanghai and Tokyo climbed almost 1 percent. Overseas markets were little-changed on Monday, when trading was closed in the United States for Martin Luther King Jr. Day.

Today's reports include Johnson & Johnson, Travelers, Verizon, Delta Air Lines, Halliburton, and Forest Laboratories before the opening bell. IBM, Texas Instruments, CA, Advanced Micro Devices, Xilinx, and Adtran follow in the afternoon. There are no major economic releases this week.

The S&P 500 is attempting to hold support at its 10-day moving average, a potential sign that sentiment remains positive with the index less than 1 percent below last Wednesday's all-time high. Technology stocks and the Nasdaq have started to stand out recently, but no single sector or index has clearly dominated--testimony to the broad nature of the bull market. The Nasdaq outperforming again, and is up more than half a percent this morning.

Financials dominated last week's earnings calendar and painted a picture of improving credit fundamentals but limited growth prospects. Retail continued to struggle following a poor holiday-shopping season.

FRX is up almost 8 percent after beating estimates and raising guidance. DAL and TRV rose 3 percent and almost 1 percent respectively on strong reports. HAL is also climbing almost 2 percent as increased oil production outside the U.S. lifted business. VZ is climbing as well.

Energy is higher, while most other commodities are lower. Brent crude oil rose 1.25 percent after the International Energy Agency cited increased global demand, compared with a 0.25 percent gain for West Texas Intermediate. That price differential is potentially bullish for refinery stocks. Natural gas also rose almost 1 percent.

Gold and copper are down more than half a percent and silver declined almost 2 percent. Agricultural products are also weak.

The main stories in foreign-exchange markets are U.S. dollar strength and weakness in the Japanese yen.