Stocks Mixed; Housing Data, Earnings Support; Geithner Reassures on U.S. Debt
Stocks are mixed in mid-day trading following positive data on home construction and a deluge of corporate earnings. The major equities indexes are paring some of the prior-session losses that came after Standard & Poors' issued a negative assessment of the US debt.
U.S. Treasury Secretary Timothy Geithner tried to calm jittery markets this morning, assuring investors that there is "no risk" the United States would lose its prized AAA credit rating. "No risk of that," Geithner said about the prospect of a rating downgrade. He also said in an interview on Fox Business News, as well as other business news networks, that the political prospects for long-term deficit reduction are improving.
In the latest economic data, the start of construction on new U.S. homes rose 7.2% in March to an annual rate of 549,000, while permits rose 11.2%, the government reported Tuesday. Housing starts in February were revised up to 512,000 from an original reading of 479,000, according to Commerce Department data.
Economists surveyed by MarketWatch had expected housing starts in March to climb to an annual rate of 520,000 on a seasonally adjusted basis. Permits for new construction, viewed as a gauge of future demand, increased to an annual rate of 594,000 from February's upwardly revised level of 534,000. Permits for single-family homes, which account for three-quarters of the housing market, rose 5.7% to an annual rate of 405,000 last month.
in big-name earnings this morning, Goldman Sachs ( GS ) reports Q1 revenue of $11.89 billion, down from $12.7 billion in last year's quarter. EPS was $1.56, down from $5.59 per share in the year ago quarter. The analyst consensus was for revenue of $10.1 billion and earnings of $0.82 per share, according to Thomson Reuters.
Also, Johnson & Johnson ( JNJ ) says Q1 sales were $16.2 billion, above the Thomson Reuters mean for $15.87404 billion. Less items, it earned $1.35 per share, above estimates for $1.26.
In company news:
ICE ( ICE ) and Nasdaq OMX ( NDAQ ) are now offering $42.67 a share for NYSE Euronext ( NYX ), according to reports this morning. NYX has already agreed to a deal with Deutsche Boerse and has so far rejected any offer from the other two ICE and Nasdaq say they have $3.8 billion in financing for the bid, according to the report.
Gap Inc. (GPS) announced today that it will consolidate its international operations into one division based in London, headed by Stephen Sunnucks, whose work now encompasses all operations outside North America. Gap hopes the move, which consolidates company operations and franchise stores in Europe, the Middle East, North Africa, South America and the Asia Pacific region, paves the way for consistent operations and will accelerate business growth.
Apple Inc. (AAPL) is up after the company reportedly sued Samsung Electronics Co., claiming the firm copied the look and feel of Apple's iPhone and iPad devices, according to a Reuters report citing a lawsuit filed in the Northern District of California.
Acorda Therapeutics (ACOR) shares are seeing support after the company said the United States Patent and Trademark Office has allowed U.S. Patent Application No. 11/010,828 entitled "Sustained Release Aminopyridine Composition." The claims of the patent application relate to methods to improve walking in patients with multiple sclerosis by administering 10 mg of sustained release 4-aminopyridine twice daily.
Kodiak Oil & Gas (KOG) says it is negotiating to contract a fourth rig for delivery in Q4. It controls a 40% to 50% working interest in wells being drilled by a non-operated drilling rig as part of its Dunn County, N.D. area of mutual interest with ExxonMobil (XOM).
Clearwire (CLWR) and Sprint (S) announce an amendment to their long-term agreement that establishes new wholesale pricing terms and provides CLWR a minimum of $1 billion from S to be paid during 2011 and 2012 for 4G wholesale services comprised of minimum usage commitments of $300 million in 2011, $550 million in 2012 and $175 million in pre-payments for 4G wholesale services to be used in 2011, 2012 and beyond.
In earnings news:
--Forest Laboratories (FRX) says Q4 sales were $1.0919 billion, below the Thomson Reuters mean for $1.11191 billion. EPS were $1.12, above estimates for $1.07. FY12 sales are seen approximately $4.5 billion and EPS between $3.60-$3.70. FY13 EPS are seen above $1.20.
--Seagate Technology (STX) reports Q1 EPS of $0.21 or $0.25 on an adjusted basis compared to $1 a year earlier and below the Street view for $0.27. Revenue declined to $2.7 billion from $3.05 billion, about in line with the $2.66 billion expected on average among analysts in the Thomson Reuters survey.
Commodities are higher. June gold contracts are up $1, or 0.06%, to $1,494 an ounce while May crude oil contacts are up 0.53%, or $0.58, at $108.24 a barrel.
In energy ETFs, the United States Oil Fund (USO) is up 0.16% to $42.95 and the United States Natural Gas fund (UNG) is up 2.59%, to $11.08.
In precious metal ETFs, the SPDR Gold Trust (GLD) is down 0.27% at $145.68. Market Vectors Gold Miners (GDX) is down 0.07% to $60.79. iShares Silver Trust (SLV) is down 0.05% to $42.27.