Dow up 114; Amazon soars on strong earnings

Amazon.com's profit beats Street estimates. Starbucks shares drop on Europe weakness. Investors applaud Bernanke's promise of Fed support in a market panic. March pending home sales are the best in 2 years. Exxon and UPS results disappoint.

By Charley Blaine Apr 26, 2012 1:37PM
Charley BlaineUpdated: 9:43 p.m. ET

Stocks rallied for the third day in a row today as a surprising gain in an index of pending home sales in March offset disappointment in Exxon Mobil's (XOM) earnings and the government's weekly report on jobless claims.

In theory, stocks have a decent chance for a gain on Friday afterAmazon.com (AMZN) shares jumped 14.7% to $224.70 after hours as earnings, while down from a year ago, nonetheless beat Street estimates.

Starbucks (SBUX) shares, however, were off nearly 5% to $57.64 after hours after reporting 40 cents a share in earnings, just ahead of the Street estimate of 39 cents. The issue for investors was that the company's full year guidance of $1.81 to $1.84 a share was lower than the Street's consensus of $1.90. The shares had finished at $60.66, up $1.16, in regular trading.

The Dow Jones Industrial Average ($INDU) very nearly ended the day with a gain for April, and the Standard & Poor's 500 Index ($INX) had its highest close since April 3, finishing just below 1,400. Stocks were also boosted by investor relief from Federal Reserve Chairman Ben Bernanke's assurances Wednesday that the Fed would support markets again if global weakness or other economic forces threatened their stability.

The Dow closed up 114 up to 13,205. That's 8 points below the March 30 finish. The S&P 500 gained 9 points to just below 1,399.98, and the Nasdaq Composite Index ($COMPX) climbed 21 points to 3,051. Apple (AAPL) was down $2.30 to $607.70. But the Nasdaq-100 Index ($NDX) was up 16 points to 2,725. Apple represents about 17% of the index's market capitalization.

Article continues below.
The Dow ended the day down just 0.06% for the month. S&P 500 and Nasdaq are down 0.6% and 1.3%, respectively for the month. The Dow and the S&P 500 enjoyed their best first-quarter gains since 1998; the Nasdaq's first-quarter gain was its best since 1991.

Friday brings the government's first estimate of gross domestic product for the first quarter. Most analysts are predicting the economy grew at an annualized 2.5% rate.

Earnings are due Friday from Ford Motor (F), Chevron (CVX), Procter & Gamble (PG), Simon Property Group (SPG) and Goodyear Tire & Rubber (GT).

The market may also take a cue from a Standard & Poor's downgrade of Spain -- two notches, to BBB+ from A. The Spanish downgrade also included a negative outlook. The ratings agency expects "Spain's budget trajectory will likely deteriorate against a background of economic contraction in contrast with our previous projections."

Futures trading suggests a modestly lower open for U.s. stocks.

Amazon.com earnings surge on North American results
Amazon.com shares moved up from a regular close of $195.99, which was up $1.57 on the day. The online retailer reported earnings of 28 cents a share, or $130 million, for the first quarter, down from 44 cents, or $201 million a year ago.

But the per-share earnings were well ahead of the consensus estimate of 7 cents. Revenue grew 33.8% to $13.18 billion from $9.86 billion a year; analysts had expected $12.89 billion.

North American sales were up 35.9% from a year ago to $7.43 billion, with operating income up 20.3% to $349 million. Sales in Europe, the Middle East and Africa were up 31% to $5.76 billion, but operating income fell 72% to $49 million.

The company expects sales of between $11.9 billion and $13.3 billion, up between 20% and 34% from the second quarter  of 2011. It sees operations generating a loss of as much as $260 million or up to a profit of $40 million.

Amazon has been under fire from many analysts because of the heavy investments it has been making in new fulfillment and server centers to back up the company's business in music, video and e-books. But the investments will continue.

Crude oil moves up
Crude oil (-CL) settled up 43 cents to $104.55 a barrel. Brent crude was up 75 cents to $119.87. Natural gas (-NG) finished down 4.4 cents to $2.126 per million British thermal units. The price is up 5.5% this week alone.

The retail price of gasoline dropped a penny from Wednesday to $3.83 a gallon, according to AAA's Daily Fuel Gauge Report.

Gold (-GC) settled up $18.20 to $1,660.50 an ounce.

Interest rates were lower, with the 10-year Treasury yield falling to 1.944% from 1.984% Wednesday. The dollar was lower against major currencies.

A better pending-home-sales report may mean higher sales ahead
The National Association of Realtors said its pending-home-sales index rose to the highest level in nearly two years, and it revised higher its estimate of pending home sales in February.

The report boosted  homebuilding stocks. PulteGroup (PHM), up 88 cents to $9.58, reported a smaller-than-expected loss thanks to cost-cutting and higher prices for home sold.

The National Association of Realtors' pending-home-sales index, which measures the number of contracts homebuyers have signed, rose 4.1% in March after February's revised gain of 0.4%.


Economists had expected a 1% increase for March. The trade group originally said its index fell 0.5% in February. The index jumped to 101.4, the highest level since April 2010, when it was boosted by the homebuyer tax credit. To find a better number without policy assistance you have to look back to April 2007, noted Ian Shepherdson, chief U.S. economist at High-Frequency Economics.


Low interest rates have helped propel home sales in a sluggish economy. The Federal Reserve said Wednesday it will keep its overnight lending rate near zero while the economy remains sluggish, potentially until late 2014.


A caveat, HFE's Shepherdson noted: "March was much warmer, relative to normal, than February, and that could easily have lifted the index." Weather aside, he noted, the trend in home sales is now rising.


Energy prices -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Crude oil (-CL)

$104.55

$104.12

1.49%

5.79%
(per barrel)











Heating oil (-HO)

$3.1984

$3.1669

0.89%

9.75%
(per gallon)











Natural gas (-NG)

$2.1260

$2.1700

0.00%

-28.87%
(per mil. BTU)











Unleaded gasoline (-RB)

$3.1328

$3.1191

-5.30%

17.89%
(per gallon)











Brent crude 

$119.86

$119.12

-2.46%

11.62%
(per barrel)











Retail gasoline

$3.8300

$3.8400

-2.42%

16.91%
(per gallon; AAA)












Exxon net drops on production decline; UPS sees Asian export weakness

Exxon Mobil missed Wall Street estimates on first-quarter earnings because of its biggest first-quarter production decline in four years and lower natural gas prices. Exxon, down 78 cents to $86.07, was the worst performer among the 30 Dow stocks.


UPS shares fell $1.40 to $78.25. The package shipper said first-quater earnings rose 6% to $1 a share, but missed analysts' estimates by 1 cent a share. Revenue also fell short of estimates as weakness in Asian exports continued. Revenue rose 4% to $13.1 billion. Analysts had estimated $13.3 billion. 
 
PepsiCo (PEP) reported first-quarter earnings of $1.13 billion, or 71 cents a share. Excluding one-time gains, the profit was 69 cents, beating analysts’ expectations for 67 cents. Revenue rose 4% to $12.4 billion. Shares were off 30 cents to $66.37.

Aetna (AET) fell $4.05 to $45.31. The third-largest U.S. health insurer reported first-quarter earnings excluding some items of $1.34 a share, falling short of the average analyst estimate of $1.40. The health insurer said claims payments were larger than expected.

Akamai Technologies (AKAM) declined $5.60 to $33.15. The operator of a server network said Chief Executive Officer Paul Sagan will leave by the end of 2013.

Crocs (CROX) fell $1.78 to $20.26. The plastic-clogs maker projected second-quarter adjusted earnings of no more than 63 cents a share, falling short of the 65-cent consensus estimate.


A total of 24 Dow stocks ended higher, led by Wal-Mart Stores, up $1.59 to $58.95, after several days of declines in the wake of The New York Times' report of alleged bribery in Mexico. Exxon was the laggard.


Citrix Systems (CTXS), a developer of networking software, was the top S&P 500 performer, up $9.59 to $86.76 after very strong earnings. The company also boosted its guidance. PulteGroup was second. A total of 395 stocks in the index were higher. The laggards were Akamai Technologies and MetroPCS Communications (PCS), down 86 cents to $7.08. Earnings missed estimates.


Citrix was also the top performer among Nasdaq-100 stocks, followed by O'Reilly Automotive (ORLY). Akamai and Celgene (CELG) were the laggards. Sixty-two Nasdaq-100 stocks were higher.


Jobless claims and Europe are a worry
The market was bothered by the jobless claims report. The Labor Department said 388,000 news claims were filed in the latest week. That was down 1,000 from the prior week.

But the prior week had been revised up from an initial estimate of 386,000. In fact, jobless claims have been revised higher from their initial estimates for 41 straight weeks.

The worry is that jobless claims won't fall much further and, as a result, unemployment won't drop either.

A second issue today was Europe. Economic confidence in the euro region declined more than economists had forecast in April, as the region's slump showed signs of deepening.

An index of executive and consumer sentiment in the 17-nation eurozone fell to 92.8 from a revised 94.5 in March, the European Commission in Brussels said today. Economists had forecast a drop to 94.2 from a previously reported 94.4, the median of 29 estimates in a Bloomberg News survey showed.

Europe’s economy is faltering as spending cuts across the region undermine hiring and consumer confidence. Deutsche Bank AG, Germany’s largest bank, today reported a 33% drop in first-quarter profit, with Chief Executive Officer Josef Ackermann calling investors' "risk appetite markedly lower."

Short hits from the markets -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0900%  0.090%

28.57%  800.00%
5-year Treasury note 

0.838%  0.841%

-19.65%  0.96%
10-year Treasury note

1.959%  1.984%

-11.60%  4.70%
30-year Treasury bond

3.135%  3.146%

-6.28%  8.52%
Currencies











U.S. Dollar Index

79.001  79.111  -0.17%  -1.89%
British pound

1.6197  1.6176  1.17%  4.24%
(in U.S. $)

          
U.S. $ in pounds

£0.617  £0.618  -1.15%  -4.07%
Euro in dollars

$1.32  $1.32  -0.77%  2.20%
(in U.S. $)

          
U.S. $ in euros

€ 0.755  € 0.756  0.77%  -2.15%
U.S. $ in yen 

80.97  81.32  -2.43%   5.02%
U.S. $ in Chinese

6.31  6.30  -0.19%  -0.28%
yuan

            
Canada dollar

$1.017  $1.017  1.44%  3.63%
(in U.S. $)

          
U.S. dollar 

$0.984  $0.983  -1.41%  -3.50%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,660.50

$1,642.30

-0.68%

5.98%
(per troy ounce)











Copper (-HG)

$3.767

$3.700

-1.52%

9.63%
(per pound)











Silver (-SI)

$31.2070

$30.3560

-3.93%

11.79%
(per troy ounce)











Wheat (-ZW)

$6.3550

$6.2650

-3.82%

-2.64%
(per bushel)











Corn (-ZC)

$6.0750

$6.010

-5.67%

-6.03%
(per bushel)











Cotton 

$0.9211

0.908

-1.93%

0.47%
(per pound)











Coffee

$1.7585

1.7675

-4.95%

-23.43%
(per pound)











Crude oil (-CL)

$104.55

$104.12

1.49%

5.79%
(per barrel)










 

85Comments
Apr 26, 2012 2:31PM
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jobless claims have been revised higher from their initial estimates for 41 straight weeks.

Enough said

Apr 26, 2012 3:15PM
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I love all of the people that praise Obummer or whatever, and praise the republicans.  BOTH parties have done NOTHING to help and continue to feed the American people S*&T. I wish we could remove everyone from Congress, including the President, and start fresh with maybe a third party or idependants.  I for one do not believe a word out of Washington these days.  Stop praising Dems/Repubs because they all suck and are all liars and cheats.  We elected them and they do not serve us. They serve themselves and leave with pensions that exceed by far many peoples regular salaries and they accomplish NOTHING.  Ross Perot is looking better by the hour, and that is SAD.
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What are people smoking out there??? A mere 1 percent gain in pending homes sales is nothing and normally 20 percent of people back out of house deals anyway so a 1 percent jump is not even a jump from normal movement of pending home sells. Plus an increase of 1 percent after a decrease of 0.5 percent brings us back to 99.59 percent of three months ago

So it is still a drop in sells not an increase.

 

Gee people learn some math here.

 

 

WASHINGTON (Reuters) - Contracts to purchase previously owned homes increased solidly to a near two-year high in March, suggesting the spring selling season got off to a firmer start and offering hopes of a pickup in housing.

The National Association of Realtors said on Thursday its Pending Home Sales Index, based on contracts signed in March, jumped 4.1 percent to 101.4, the highest level since April 2010.

Economists polled by Reuters had expected signed contracts, which lead existing home sales by a month or two, to rise 1.0 percent after a previously reported 0.5 percent fall.

Apr 26, 2012 3:22PM
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whats going on !!!  the price of Crude Oil is up.     but at the pump its going down,       I smell something funny going on.  Don't tell anyone

Apr 26, 2012 2:59PM
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All the O bumer lovers forget one thing. Ask the pres. How many people have fallen out of the work force. how many have run out of benies, stop looking. and so on. Before you pat him on the back you better ask these questions first. i'm betting the real numbers are alot higher then their tell us.  Companys are still laying off people. and why don't anyone ask the pres. what happen to the 740 billion. and how it was spent.
Apr 26, 2012 11:25PM
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Comrade ActiveRIA...

 

Your idea of center would be far to left at a Marxist convention!  About the only place you might be considered a centerist is at a Democrat convention...  But then again Lenin himself would be a centrist at the Democrat convention...

Apr 26, 2012 3:23PM
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Misterkyte, I was just dreaming....wishing....I know you are right...but maybe for a start the American people can start by protesting/pushing for Term Limits in congress.  At the same time, maybe voting out all incumbents....A third party is a thought and nice to dream of but will probably never happen.  One way or another, the American people must show that they mean business...maybe then the politicians will begin to work FOR us and not AGAINST us.
Apr 26, 2012 11:29PM
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It is actually funny, that the Donkey party hencemen have caused more harm to the very people they want to help...  I cannot help but laugh.  If I had been in charge and told to punish the democrats, I could not have done a better job than '57 States'...

 

If he helps them anymore, they will make the last 3 years look like a walk in the park!

Apr 26, 2012 2:59PM
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Dow up 120 pts today. Dow down 120 pts tomorrow. Quick Bernake, dump more cash into the hog trough so the big money can feed. Quick, spend more of our money and call it QE3 so things will get better!!!!
Apr 26, 2012 11:22PM
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Democrats = Police state controlled by some more equal than others....
Apr 26, 2012 3:37PM
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Home sales numbers are deceiving anyway. People who sell a home and buy another are just trading dollars for dollars, unless it's a big upgrade. Even then, it doesn't change the number of homes on the market. I want to see the first time home buyer numbers go up consistently.
Apr 26, 2012 3:32PM
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Housing is picking up? What country are we talking about? Hopes? What hopes? I thank goodness everyday that my wife and I lived below our means for alot of years and paid our home off, eliminated all debt and have saved a fair amount of money. We work for insurance now. But I hear our fearless leader has been speaking to his friends at the Muslim Brotherhood, and asked Louis Farrahkan what to to do. I really don't want to know the answer to I'll just sit on the sidelines and watch the drowning man sink.
Apr 26, 2012 5:12PM
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Let me clear this up for you, I can't stand the extremists that are taking control of both parties... they stake out harsh uncompromising positions and have no qualms about causing havac in our nation to make political statements of their ideology. I would much prefer each of the parties platforms to come back to the reality of centrist governing and start dealing with this countries problems instead of constantly grandstanding for political points. This ain't a ballgame we're wacthing and we ain't cheerleaders. 
Apr 26, 2012 2:40PM
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Hey Fat Man Charley Blaine,  I just sent a package overseas via UPS, filled up my tank, and went looking to buy a house, now you know that, you can say UPS is doing great internationally, and on filling up my tank, you can say the recovery is back on and lastly the housing market hopes now gets a AAA rating...let the flood gates go to 14000 on this rigged Wall Street economy.
Apr 26, 2012 4:13PM
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Humm  I wonder if the aztecs had it right and Dec 21, 2012 is the day.  Maybe they were foretelling  A financial Armageddon  That Bernanke article  kinda opens your eyes to all the games being played by politicians.
Apr 26, 2012 5:04PM
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-OXYMORON - 

 

"Dow up 114 as stocks rally on home sales hopes."

 

"In fact jobless claims have been revised HIGHER from their initial estimates 41 straight weeks."

 

Also

 

- stocks rise on Greece bailout.

 

-stocks fall on Greece bailout issues.

 

AMERCIAN TAXPAYER IS GETTING "GREECE - D" by own government - the truth and nothing but the truth.  Not HOPE AND CHANGE!!!

 

 

Apr 26, 2012 2:59PM
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The state of Nevada must have been left out of the stats, we are almost giving our homes away.  Price drops of about 70% to 80% of boom prices.  Our townhome is down 34% of the purchase price of 1997, we have live here 15 years and are now upside down from purchase price. 

 

If I were to sell now I would take a $34,000 loss.  Soooooooo, tell me again how Obummer has helped the housing market.

Apr 26, 2012 4:15PM
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  All these idiots are trying to do with their idiot headlines is keep the Wallstreet party going.  They are so boring, so predictable.  Just recycling the same garbage over and over.  They don't talk about anything that really matters, or anything really important.  But they are a part of the system, it is their life.  
  Wallstreet is a carefully crafted fantasy land, whose sole purpose is to skim as much wealth from the middle class and folks of lower intelligence as possible.  With all the funny money in the system, and "interesting" ways of looking at them, numbers don't even mean anything anymore.  It will all come to a head some day, and implode for real.  They can't keep the game they insist on playing going without growth.  There is no growth in the US economy.  There is very little world wide, overall.  If anything, the world economy as a whole is trying to go into reverse, as it well should be.  There can be no real growth until the absurdity of the mess we are currently in works itself out as it naturally will.  The Fed can only hold back reality for so long.  Without growth, reality will definitely come ah knockin', because the foundation of our whole system of debt is based upon the assumption of growth!!!!!  
Apr 26, 2012 4:25PM
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Fed Chairman Ben Bernanke calls it the “fiscal cliff.” It might be better thought of as the next economic Armageddon.

Unless Congress acts to soften the blow, economists are warning that a looming year-end collision of massive, “automatic” cuts in federal spending and the expiration of sweeping Bush-era tax cuts could crush an already weak U.S. economic recovery

 

But hey, a couple people sold their houses last month.

Apr 26, 2012 3:32PM
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THE NATIONAL ASSOCIATION OF REALTORS IS NOTORIOUS FOR OVERSTATING SALES AND FIGURES. IN AN MSN ARTICLE  DATED 12-21-2011BY MSNBC.COM SENIOR PRODUCER JOHN W SCHOEN, THE NAR HAD PREVIOUSLY OVERSTATED THE PACE OF EXISTING HOME SALES BY 16%. AND THIS WAS NOT THE FIRST TIME STATS WERE DISTORTED. WHILE THERE IS NO DOUBT SALES ARE UP SOMEWHAT, AGENCIES SUCH AS THIS AND THE GOVERNMENT CONSTANTLY OVERSTATE THIS ALLEGED RECOVERY FOR OBVIOUS REASONS.
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