Stocks turn higher despite weak economic signs
New unemployment filings shoot above estimates, tempering optimism over corporate results. Leading economic indicators and sales of existing homes are down. Mid-Atlantic manufacturing slows.
By Andrea Tse
Stocks rose Thursday as investors weighed weak economic reports against strength in second-quarter earnings after a spate of consensus-topping reports from companies such as eBay (EBAY) and IBM (IBM).
The Labor Department said initial jobless claims for the week ended July 14 rose by 34,000 to 386,000 from the week before, from an upwardly revised 352,000. Economists expected claims to rise to 365,000. The four-week moving average declined by 1,500 to 375,500.
The Conference Board said its index of leading economic indicators fell by 0.3% to 95.6 after rising 0.4% in May. The figure is worse than the expected 0.1% dip, Reuters reported.
Sales of existing homes declined in June as fewer people sold their homes under distressed conditions, Reuters reported. The National Association of Realtors said sales fell by 5.4% to an annual rate of 4.37 million units -- the slowest pace in eight months and well below expectations for a rate of 4.63 million units.
Philadelphia-area manufacturing shrank for the third consecutive month, along with new orders and employment, Bloomberg reported. The Philadelphia Fed's general economic index came in at minus 12.9 in July after a reading minus 16.6 in May, missing economists' expectations for a reading of minus 8. Readings of less than zero signal contraction.
IBM eased past Wall Street's expectations in its earnings Wednesday but fell short on revenue, mainly because of foreign currency pressures. For the full year, IBM lifted its earnings outlook, saying it expects a profit of at least $15.10 a share, up from a prior view of $15 a share and ahead of consensus at $15.06 a share.
Internet giant eBay on Wednesday reported quarterly earnings of 56 cents a share on revenue of $3.39 billion. Analysts were looking for profit of 55 cents a share on revenue of $3.41 billion. EBay saw huge growth in at its PayPal division, which posted a revenue rise of 26% year over year.
Morgan Stanley (MS) posted a second-quarter profit, but its revenue fell by 24% because of a slowdown in trading and deals, Reuters reported. The bank reported earnings of $564 million, or 29 cents per share, compared with a loss of $558 million, or 38 cents per share, a year ago. Revenue fell to $6.95 billion from $9.21 billion a year earlier.
Google (GOOG) is expected to post second-quarter earnings of $10.05 a share on revenue of $8.42 billion after the close. It posted a profit of $10.08 a share on revenue of $8.14 billion in the first quarter and earnings of $8.74 a share on revenue of $6.92 billion in last year's second quarter.
Microsoft (MSFT) also reports quarterly results Thursday, and analysts expect it to post fiscal-fourth-quarter earnings of 62 cents a share on revenue of $18.11 billion. The estimates don't take into account a write-down of $6.2 billion related to the 2007 acquisition of aQuantive. The software giant says Windows 8, the upgrade to its operating system, will go on sale Oct. 26. The software is designed to work on both PCs and tablet computers.
After suffering through a botched initial public offering of Facebook (FB) shares and a two-notch ratings downgrade, Morgan Stanley (MS) reported a big earnings miss as revenue and earnings per share fell short of expectations.
The major U.S. equity averages finished with solid gains Wednesday as investors grew more optimistic about second-quarter earnings and as the Federal Reserve said in its Beige Book that the economy continues to grow, albeit more slowly.
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Amazing how a group of us get together here every day and clearly discuss between ourselves the economic situation our country faces and 95% of the time we seem to come up with conclusions that over time prove to be very accurate. We have how many gazillion talking heads, economists, government prognasticators all missing the target by miles and sending so many folks down the wrong path. Maybe we need folks who are not involved economically with these decisions. A clear head and focus seems to be very difficult to find when money, greed, and power enter the Arena. JMHO
Mitt is a very rich man. I don't blame him for not wanting to release more tax information than necessary. All it would do is give the opposition more fodder to chew over and bitch about. Also I believe most presidents were fairly well heeled except maybe Truman and Ike? BTW, just how much info did Kennedy disclose?
Anyway, I don't give a damn about how much money Mitt has. All I care about is how effective he might be in dealing with our country's economic problems. I believe he'd do a better job than the current wizard.
This economic malaise could easy last for another decade. Even the Fed doesn't see anything beyond anemic growth for the next several years. We all know that Obama doesn't have a clue about the economy. Time for him to retire to a golf course or the basketball court.
Last week's reported jobless claims number was 350K. This week's reported jobless claims number is 386K. Comparing apples and apples, the worsening of the job market is 36K more people looking for hope and change!
Only when Jimmy Carter O'Blamer and a lot more Democrat Senators and Representatives are removed from Federal office, will this economy and this country begin to heal itself!
I guess VF was right. They all do know how to file!
Or do they????
Short term Wall Street does not think unemployment is bad like Main Street. Less expense in the corporate world means better bottom lines. People without jobs continue to spend money after all they still have bills. It is tough money to spend....... unemployment checks are not big enough so they dip into savings then into retirement funds.....
You would think the "Long Term" would kick in at the Wall Street mentality level at some point... When???
With all of Obama's attacks on Romney ... the polls still have the election even and Romney hasn't picked his VP, yet!!!
Mitt .... just sit back and at some point Barry will have to address his disastrous record for his first term and then it's over!! You can waltz your way into the Whitehouse. WithBarry's approval rating below the "Mendoza" line .... he is toast!!
Bye, bye Barry!!
"Bottom line. Why should I vote for someone who refuses to show me his income tax returns."
TOO FUNNY-- LETS SEE IF THIS IS SLIGHTLY HYPOCRITICAL ?
YOU DON'T NEED A BC, OR COLLEGE TRANSCRIPTS, OR COLLEGE ADMISSIONS, OR VETTING ON DEAR LEADERS BACKGROUND, FREINDSHIPS, RELIGIOUS BELIEFS, PHILOSPHCIAL BELIEFS, OR NEED TO SEE THE DEED OF THE LAND HE BOUGHT FROM A CONVICTED EMBEZZLER< OR HOW HE MADE HIS 12 MILLION FROM 'COMMUNITY ORGANIZING" OR WHY HE HAS 2 SS #'s OR WHY HE USES MULTIPLE NAMES ??
DO YOU REALLY THINK ,WE THE PEOPLE BUY INTO YOUR RANTS?
GO BACK TO WATCHING , MSNBC , GETTING MARCHING ORDERS FROM ACLU
btw, have you seen the jobs report today ?
JUST LIKE HIS POLL #'S !
A Arizona sheriff, Joe Arpaio of Maricopa County said he is certain that Barrack H. Obama's birth certificate is a forgery ! The article is on the MSN page fo all of you to read for yourself.
Well, I hate to stir the pot and run; got a busy day ahead of me. C-YA later!!
guittner knew about libor rate rigging in 2008.
check out jim rickards on keiser report
maxkeiser dot com banking system is gonna collapse
HOME SALES UP YESTERDAY, HOME SALES DOWN TODAY DOES ANYONE IN THIS COUNTRY HAVE A CLUE? IT'S JUST A MATTER OF TIME BEFORE WE GET A RUDE WAKE UP CALL!!
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[BRIEFING.COM] So far, it has been much ado about nothing today, yet that is about to change with the release of the FOMC policy directive at the top of the hour and Fed Chairman Bernanke's press conference following at 2:30 p.m. ET. The indices have held to narrow trading ranges, with participants waiting to see which way things break on the Fed's guidance.
It has been widely presumed that the Fed and Mr. Bernanke will offer the market assurances that the Fed's asset ... More
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