Intraday Market Update
Stocks continue their bounce off of Tuesday and Wednesday lows as risk aversion has subsided due to a general feeling that an expanded EU/IMF aid package for Greece is imminent. The S&P 500 is trading at about 1,207, or +1.37% on the day. The index put in a double bottom around 1,182 on Tuesday and Wednesday. Since yesterday's bottom at about 11:30 AM the S&P 500 has rallied +26 points (+2.2%). All of the indices are surging higher in mid-day trading as traders pour back into stocks.
On the economic front, initial jobless claims fell to 448,000 vs. 459,000 in the prior week, which was revised +3,000 higher. The four-week average is up +1,500 to 462,500 and compares negatively with 448,000 at the end of March. Continuing claims are down -18,000 to 4.645 million for the week of April 17th. Today's report is not overwhelmingly positive but does show improvement. Natural inventories rose +83 billion cubic feet compared to estimates of 70 bcf. Natural gas prices have plunged -8%.
In earnings news, shares of Exxon are off almost -1% as the largest oil producer missed top and bottom line expectations in its Q1 report. The company noted that lower refining margins offset the benefit of higher oil prices, but downstream results appear to be turning around. Conoco Phillips' earnings exceeded expectations and its shares are higher by +1.50%, reaching highs not seen since 2008. Chevron reports tomorrow mourning. Shares BP are down -8% after they announced that the leaking well in the Gulf of Mexico was gushing at five times the rate they initially thought. The company said it is spending $4 million a day for the clean-up operation, but the cost is likely to increase sharply if the oil slick hits land.
Visa reported earnings that were slightly better than expected and reiterated its full year forecast. On the conference call, the company's CEO affirmed that the worst of the recession appears to be over, and spending is picking up in the US and abroad. Insurance names Allstate and Aetna are headed in opposite directions. ALL is off by about -1.5%, while AET has gained nearly +3%. Allstate missed on the bottom line, while Aetna crushed earnings targets and raised its 2010 guidance.
Consumer staples Procter & Gamble and Colgate reported earnings that were slightly better than projected, although revenue was disappointing. PG is about -1% lower, while CL is about breakeven. Time Warner Cable has gained more than +7% after stating that it is on track to meet or exceed fiscal year guidance. Motorola posted a small profit in its report against expectations of a small loss. Shares of MOT gained as much as +8% but have since backed off to about +3%. First Solar is up +16% after reporting earnings of $2.00 per share compared to estimates of $1.67. FSLR has gained about +50% since its February 25 low around $99. The stock is now trading at about $149.
Front month crude is +2.35% higher to $85.20 per barrel. Natural gas is back below $4.00 (-8%) after higher than expected weekly inventories. Gold is marginally lower at $1,168 per ounce, silver is higher by +2.15%, and copper is lower again by -0.74%.
Asia-Pacific markets were mostly lowly on Thursday. Declines were led by Japan (-2.57%), China (-1.10%), Hong Kong (-0.81%) and Australia (-0.77%).
All major European markets rebounded from the losses experienced this week. The biggest winners were Spain (+2.69%), France (+1.42%), and Germany (+1.00%). Shares in London were higher by +0.56%).
Core Sector List:
Overall reading: 15 sectors advancing, 1 sector declining.
Strongest Sectors: Home Construction, Banks, Utilities
Weakest Sectors: Oil Services, Oil
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