The Dow Jones Industrial Average (DJIA) has bounced back from heavy losses on the open, as Wall Street comes to grips with a slower U.S. economic recovery. While the Dow's current gain of about 13 points is nothing to write home about, it's considerably better than the triple-digit loss the DJIA suffered earlier in the session. Helping to bolster sentiment on Wall Street, manufacturing in the Chicago region improved more than expected, while consumer confidence slipped less than economists were expecting. The DJIA is currently battling with resistance at the 10,500 level, which is also home to the blue-chip barometer's 20-week moving average. The Dow has not closed a week above both these technical hurdles since mid-May. Turning to the S&P 500 Index (SPX), bullish investors might consider a second weekly close above 1,100 since mid-June a victory.
Taking a closer look at today's economic news, U.S. second-quarter GDP rose at a 2.4% annualized rate, well below the average 4.4% increase during the prior six months. Despite the deceleration, it was almost in line with economists' predictions for a 2.5% rate. First-quarter GDP was revised higher, to an annualized rate of 3.7%, from the prior estimate of a 2.7% increase.
Elsewhere, the Chicago purchasing managers index rose to 62.3 from 59.1 in June. The rise was unexpected, as economists were expecting manufacturing activity in the region to decline. Readings above 50 indicate overall business expansion.
The University of Michigan/Reuters consumer sentiment index fell to 67.8 in late July from 76 in late June. The July reading was revised higher from a preliminary reading of 66.5. Economists had expected a final July index reading of 67.
Finally, in case you missed this morning's editions of Opening View, or Early Edge, below is a quick wrap-up of what you missed:
Merck & Co. Inc. (MRK) reported second-quarter earnings of 86 cents per share, excluding items and one-time charges, as revenue jumped 92% to $11.35 billion. Wall Street was looking for a profit of 83 cents per share and revenue of $11.45 billion. Merck said it expects adjusted 2010 earnings of $3.29 per share to $3.39 per share, which falls short of the current consensus estimate for a fiscal 2010 profit of $3.37 per share.
Potash Corp. of Saskatchewan (POT) attracted a trio of price-target adjustments this morning, one day after the fertilizer firm hiked its 2010 earnings outlook. UBS raised its price target from $112 to $120 and reiterated its "buy" rating, while Soleil Securities upped its target from $89 to $100. Meanwhile, National Bank took the road less traveled by cutting POT's price target from $127 to $120.
Coventry Health Care Inc. (CVH) reported second-quarter earnings of $1.10, excluding one-time items and a $278 million litigation charge. Revenue for the quarter fell 18% to $2.87 billion. Analysts were expecting earnings of 55 cents per share on revenue of $2.83 billion. For 2010, Coventry sees earnings of $1.72 to $1.87 per share.
Discuss this article:
Post your own comment
More articles:
Biotechnology behemoth Biogen Idec Inc. (BIIB), commodities concern Kinross Gold Corporation (KGC), and gambling guru Las Vegas Sands Corp. (LVS) were all on analysts' radar this morning. However, to put today's fresh brokerage attention into perspective, we have to consider each stock's technical and sentiment backdrops. read more...
Goldman Sachs Group, Inc. (GS) was hit from across the pond this morning, as the Financial Services Authority (FSA) -- the U.K.'s financial services "watchdog" -- said that it has fined the investment firm 17.5 million pounds, or roughly $27 million dollars on charges related to its fraud investigation in the U.S. This new fine comes on the heels of July's $550 million fine from the Securities and Exchange Commission (SEC). read more...
U.S. stocks are blazing a steady path higher today, fueled by a surprise drop in weekly jobless claims. Specifically, the Labor Department reported this morning that initial unemployment benefit claims fell by 27,000 to 451,000 last week, the second drop in a row, and bringing figures well below the psychologically significant 500,000 level reached two weeks ago. As a result, the Dow Jones Industrial Average (DJIA -- 10,460.19) has climbed 73.18 points, or 0.70%, putting the blue-chip barometer back in the black for 2010. Today's positive momentum has also catapulted the Dow above short-term resistance at the 10,450 level. read more...
Teva Pharmaceutical Industries Ltd. (TEVA) was the focus of some positive brokerage comments this morning when Oppenheimer upgraded the company from "perform" to "outperform." read more...
McDonald's Corporation (MCD) stepped into the spotlight this morning, announcing global sales growth of 4.9% in August. Same-store sales in the U.S. increased 4.6%, sales in Europe rose 2.2%, and sales in the Asia/Pacific, Middle East and Africa regions climbed 7.8%. read more...
Today's column includes a look at a rise in put trading on Airgas (ARG), while call trading increased on MGM Resorts International (MGM) and Symantec (SYMC). Each day, 3 Stocks to Watch focuses on stocks seeing heavy options trading and gives you a unique insight into each stock's sentiment backdrop. read more...
Cincinnati, Ohio-based grocer The Kroger Co. (KR) is scheduled to release its second-quarter earnings report before the start of regular trading on the morning of Tuesday, Sept. 14. Despite recent signs of improvement in the U.S. economic recovery, Wall Street isn't holding its breath for a strong quarterly showing from the company. The consensus is currently expecting a profit of 36 cents per share from Kroger, a figure that is down 3 cents from the same quarter in fiscal 2009. read more...
Pharmaceutical stocks have been hot today, with M&A mania sweeping Bristol Myers Squibb Co. (BMY), new drug approval for Merck & Co. Inc. (MRK), and a dissolved partnership at Pfizer Inc. (PFE). Let's take a closer look at these fundamental developments, while also examining each of these drug makers' technical and sentiment backdrops. read more...
Tech titan Apple Inc. (AAPL), financial firm Huntington Bancshares (HBAN), and office-supplies issue Staples, Inc. (SPLS) were all on analysts' radar this morning. However, to put today's fresh brokerage attention into perspective, we have to consider each stock's technical and sentiment backdrops. read more...
Altera Corporation (ALTR) raised its third-quarter outlook on Tuesday, revealing that it now expects revenue to rise 10% to 14% -- well above the semiconductor company's previous forecast for growth of just 4% to 8%. ALTR credited a growing market for its raised forecast, explaining that "the telecom and wireless vertical market is on track to be the fastest growing portion of the business, driven in large part by 3G wireless deployments and needs for additional wireless backhaul capacity." ALTR is slated to release its third-quarter report on Oct. 19. read more...
working... 
