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The Earnings Wait

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The tug-of-war continues this afternoon as Wall Street waits for the next round of major corporate earnings news. As we head toward the close, the big question on everyone's mind is what will Microsoft (MSFT) and Intel (INTC) have to say about their 2nd quarter guidance going forward?

The Dow Jones Industrials are currently +11 points to 8361, the NASDAQ Composite is +2.7 points to 1387, and the S&P 500 is +2.85 points to 887. Volume remains weak but it is to be expected during the shortened holiday week. Volume on the NYSE is 1.2 billion. Volume on the NASDAQ is 937 million. Up volume is outpacing down on the NYSE and it is a dead heat on the NASDAQ with a slight edge to the bulls. Meanwhile, advancing issues are 16 to 11 on the NYSE and 1440 to 1479 on the NAZ. New 52-week highs are nearly three times the number of new 52-week lows.

Leading the Dow Jones Industrial's gainers are AXP +2.83%, IBM +2.77% and MO +2.28%. IBM is higher on their earnings report last night and the slightly improved revenues numbers despite missing the net income estimates. MO is trading higher from yesterday's news about the somewhat successful negotiation with an Illinois judge to lower the amount of money they'll have to post during their appeal.

Completing the tug-of-war in the Dow Jones are the losers: JNJ -3.47% after its earnings report this morning. GM -3.07% on its earnings report this morning and negative comments in its guidance going forward. AT&T is down 2.27%.

If you've been following the news it's hard to miss the headlines about AMR, this country's biggest carrier. AMR's stock is currently up 29% to $4.00 on news that the company has two of the three labor unions agreeing to its cost reductions strategy. The company and the airline industry await to hear from the flight attendant union.

Given the big move in AMR the airline index XAL is up six percent. Another sector up strongly is the Dow Jones Transports, which is currently up over three percent. This is a strong bullish signal for the bulls and the TRAN is currently above its simple 200-dma. However, bulls should remain cautious as the VIX continues to slide lower.

Coming up right after the close will be MSFT and INTC's Q1 earnings report. Hang on to your hats.

James Brown

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