A mixed bag of earnings reports and economic data seemed to weigh on the markets early in the day but steady and persistent buying sent the Dow up over 100 points.

Earnings were the topic of the day despite disappointing jobless data. This week, and today, marks the midpoint of earnings season for the S&P 500. 258 companies have reported for the recently ended quarter and the outlook for the coming quarter is questionable. There has been some slowness reported in growth in Chinese markets, mixed economic data, especially the rising trend in jobless claims and some surprise earnings misses kept the rally subdued.



Initial jobless claims continued to trend higher despite a reported drop in numbers. The drop of 1,000 claims from last week is due to an upward revision of 3,000 claims for the previous week. The upward revision came as no surprise and continues a trend of revisions in place now for close to two months. Initial jobless claims in the week ending April 21st were 388,000, down from the previous weeks 389,000. The number is at high levels for 2012 and is trending higher. The four week moving average also trended up again by 6,250 claims to 381,750.


Continuing claims also trended up this week. Claims for a second week of unemployment rose by 3000 to an adjusted 3.32 million for the week ending April 14th.


The total number of Americans filing for unemployment benefits fell this week despite the recent rise in initial claims. The total number of unemployment claims is 6.68 million, down 87,000 from the previous weeks data. I am expecting to see an increase in total claims soon, the number lags initial claims by two weeks.


In other economic news signs of life in the real estate market helped to raise hopes. Homebuilder momentum was reported up 15% from the previous month. This measures the rate of business growth in the sector. Pending home sales also reached a nearly 2 year high. Pending home sales rose 4.1% in March to the highest level since April 2010. March's pending home sales data is 12.8% higher than last year at the same time. On the downside, foreclosures are up in the first quarter of 2012. Foreclosure ctivity was centered around some of the nations fasted growing cities including Raleigh, Pittsburgh and New York.

European markets held their ground today as US companies and data were released. No new headlines concerning sovereign debt or austerity crossed the wires that I saw. Attention in Europe today was focused on Rupert Murdoch and the wiretapping scandal.

Asian markets also remained steady over night. Earnings misses and mixed US economic data failed to depress shares. Expectations of a soft-landing and continued growth for China remain in the forefront.

Yields on 30 year treasuries fell slightly today.

30 Year Bond Rates, daily

Gold, silver and copper are gained in today's trading. The fed statements yesterday have increased speculation of future growth into the near future and caused the prices of precious metals to rise. Gold rose by more than 1%, followed by copper's 1.8% and silver with a gain of more than 2%.

The optimistic outlook also led to a small gain in energy. Oil rose by 0.3% in today's trading. Brent crude and gasoline both increased by around 0.7%. Natural gas inventories received another injection this week. Storage levels rose by 47 billion cubic feet, in line with expectations. The price of natural gas actually rose by over 2% to $2.114.

Earnings and outlooks, which have been good so far, took a hit today as a string of disappointments hit the market. Exxon, UPS, H&R Block and Crocs were prominent in the news. Exxon reported that profits were down by 11%, outpacing an 8% increase in revenue. Reduced production and sales volume were blamed in part on the decline. Higher costs of production and increased exploration also contributed to the miss. Analysts had been expecting a drop in profits due to the decline in natural gas prices but the reported decline exceeded the consensus. Revenue, up 8%, increased to $124.05 billion in the quarter and resulted in earnings of $2.00 per share. Analysts were expecting earnings of $2.09. Shares fell more than 1% in early trading but found support at the short term moving average.

Exxon, daily

United Parcel Service increased earnings by 6% in the quarter but failed to meet expectations. Flat demand in overseas business to Asia and Europe have caused the company to consider reducing capacity again. They had already reduced air frieght capacity by 10% last year. Domestic shipping and chain store sales continued to show strength and are expected to increase that by 3.5%-4% this year. Earnings were released after the bell yesterday and caused share price to fall by 2.5% in pre-market trading. The company reported $1.00 per share, analysts had expected $1.02. Mildly high volume caught the stock just above a near term support level.

United Parcel Service, daily

H&R Block is planning on closing offices and cutting jobs. The news was part of a badly received earnings report that sent the stock plummeting over 10% today. In the company's press release they called it a “strategic realignment of organization”. The firm is planning on cutting costs by up to $100 million in the coming fiscal year.

H&R Block, daily

Crocs earnings accelerated the stock's recent decline. The company beat expectations for the first quarter but guided estimates for the second quarter below current expectations. In the first quarter the company increased revenue and widened margins. Revenue increased around 20% and gross margin increased by 0.7% to 53.3%.

Crocs, daily

Akamai Technologies reported an increase in revenue and a decrease in profits. First quarter net revenue increased by 16% in the quarter but gaap earnings per share fell to $0.24 per share. This is an 8% drop in earnings per share over last year. The stock dropped more than 12% on high volume following the news. Share price fell below the short term moving average and near term support.

Akamai Technologies, daily

Whirlpool Corporation announced net earnings of $1.17 per share, compared to last years $2.17. On an adjusted basis, taking into account “unusual items” and restructuring expenses the company earned $1.41 compared to a previous $0.64. Total revenue declined in the quarter by 1% over the previous year, driven by decreased demand. The company reaffirmed its guidance for adjusted yearly earnings per share of $6.50-$7.00.

Whirlpool, daily

Barclays Bank announced that pre-tax profits rose by 22% in the quarter. The gain was driven by retail, invesment and business banking. Return on shareholder equity increased by 2% to 12.2%. The stock traded in a tight range today, just beneath the short term moving average.

Barclays, daily

Celgene is another company increasing profits but missing estimates. Earnings rose in the first quarter by by nearly 57% compared to last year but still fell short of estimates. The company saw broad gains in sales and improved margins. The poorly received gains sent shares tumbling. The stock dropped over 6% today on high volume to close below recent support. The company also announced strategic licensing agreements with Epizyme which will allow Celgene exclusive rights to treatments developed.

Celgene, daily

LSI Corporation, producer and provider of software and micro chip solutions, announced revenue and earnings that beat expectations. Compared to the previous year revenue fell slightly while earnings increased. Non-gaap eps came in at $0.20 per share, compared to an average estimate of $0.14. the Company was able to increase margins across the board. Shares of the stock jumped in early trading but declined throughout the day. Share price fell on heavy volume and dropped below the 30 day moving average. Other chip makers have been reporting good numbers as well.

LSI Corporation, daily

LSI has been outpacing the Philadelphia Semiconductor Index, which has been trending flat for the last 12 months.

Celgene compared to the Philadelphia Semiconductor Index, daily

Jetblue reported earnings and revenue that surpassed last years results and analysts estimates. Higher fares, increased traffic and expanded services outpaced the rising costs of fuel for the air carrier. The company earned $0.09 per share compared to last years $0.01 per share. Last years results were impacted by the major snow storms which shut down most of the countries air lines. Experts had been expecting earnings of $0.08 per share. The stock barely moved on the news, shares are trading in a tight range just above long term support.

Jetblue, daily

Occidental Petroleum posted a small increase in profits as the oil giant benefited from increased production and higher oil prices. The company increased production of oil and natural gas by 3.4% on a liquid basis. The average selling price for oil rose by 17% for the company but were offset by a near 30% decline in natural gas realized prices. Earnings per share of $1.92 were in line with the average estimate. Share price climbed nearly 2% to close just shy of the 30 day moving average.

Occidental Petroleum, daily

Price increases helped Pepsico improve revenue by 4.1% in the quarter. However, profits still slid by 1.4% due to higher costs and increased marketing. Pepsi has been losing US marketshare to Coca Cola and is trying to regain it. The compnay was able to successfully pass along price increases to its customers but failed to match the increase in operational costs. Business in emerging markets increased by 13%.

Pepsico, daily

Four big names reported after the bell today that will surely have an impact on Friday's trading. International retail giants Amazon and Starbucks as well as Coinstar and social media game site Zynga.

Amazon blew away expectations with earnings of $0.28 per share. Revenue also surpassed expectations at $13.2 billion. The report sent shares up over $15 in after hours trading.

Amazon, daily

Starbucks reported earnings 1 penny ahead of estimates. The company earned $.040 versus the estimated $0.39. The gain came on revenue of 3.28 billion compared to the expected 3.18. The coffee and snack retailer is expanding into Asia, especially India and is expecting the growth, plus the addition of its single serve platform later this year to enable continued growth in 2012. The report sparked intense selling after hours, the stock lost over 4.5% following the release.

Starbucks, daily

Revenue for Coinstar, the owner of RedBox, increased by 34% in the first quarter. Strong growth of the brand, same store sales growth and increased kiosk numbers drove the gains. The company is expecting to earn between $4.40 and $4.80 for the fiscal year.

Coinstar, daily

Zynga earned $0.06 per share on revenue of $329 million, slightly ahead of expectations. The stock traded quietly throughout the day in anticipation of the announcement.

Zynga

Earnings are driving the markets higher. The fed's hawkish stance yesterday has increased hopes that the economic recovery is still progressing. Some high profile earnings misses are hurting individual stocks but the general market is still moving ahead. The few earnings disappointments have to be taken in stride though, companies like Exxon and UPS are still making money and increasing profits, just not as fast as last year. The Dow, led by Wal-Mart, gained 115 points today. The index is making a move up from the short term average but it is on weak volume. The index faces some resistance as it approaches recently set highs.

Dow, daily

The S&P 500 made an identical move today. This mornings futures trading indicated a slightly lower opening but earnings news buoyed the index throughout the day. Steady buying brought the index to just shy of 1400. The broad index is moving up from the short term moving average, which has flattened.

S&P 500, daily

The Nasdaq made a small gain today too. The tech heavy index is lagging the Dow and S&P 500 in terms of regaining recently set highs. The technical indicators are beginning to turn up and momentum is becoming bullish.

Nasdaq, daily

Earnings and economic data will continue to drive market direction. Tomorrow look out for the advance number on first quarter GDP. GDP in the fourth quarter of last year was 3.0% and the consensus for the first quarter of 2012 is 2.5% with the high estimate of 2.9%. A reading too far below consensus could derail the current rally. Other data includes the first quarter chain deflator and the final reading of the Michigan Sentiment Index.

The rush of earnings reports also continues tomorrow. Earnings to look out for tomorrow include several regional financial institutions and oil driller Anadarko Petroleum.

Thomas Hughes