Blue Chip Stocks Continue Earnings Parade

 |  Includes: AMD, BAC, C, GS, IBM, MSFT, USB, WFC, YHOO
by: Midnight Trader

Stocks ended their sixth straight week with gains, but a number of financial companies, including Bank of America (NYSE:BAC) and U.S. Bancorp (NYSE:USB) still have yet to report results. Aside from banks, technology companies will also dominate earnings this week as investors hear from IBM (NYSE:IBM), Microsoft Corp. (NASDAQ:MSFT), and Advanced Micro Devices Inc. (NYSE:AMD).

Goldman Sachs (NYSE:GS) and Wells Fargo (NYSE:WFC) have eased some investors concerns after posting earnings improvements in the first-quarter, however, some of the optimism was reigned in last week after UBS AG (NYSE:UBS) said it expects to report a first-quarter loss of nearly $1.75 billion and will cut 8,700 jobs worldwide by the end of next year. Citigroup (NYSE:C) also reported better-than-expected first-quarter results Friday, though the company continues to take charges to reserve for consumer defaults.

On Monday, IBM reports its first-quarter results in after-hours trading, and analysts polled by Reuters expect a profit of $1.66, up 1.2% from a year ago, on revenue of $22.6 billion. The stock is down 16% over the past 12 months.

Investors trading into earnings should know that IBM favors a long-term reversal pattern in its session-to-session performance, crossing narrower next-day percentage closing levels following after-hours earnings events in 11 of the last 19. However, the near-term is mixed, with the stock widening once, narrowing once, and reversing twice its rafter-hours move in the following regular session. On January 20, the stock rose 4% in after-hours trading when IBM guided for higher 2009 earnings. The stock widened its move in the following trading session, ending up 11.5%.

Yahoo! (NASDAQ:YHOO) is due with its first-quarter results after the close on Tuesday and is expected to report earnings of $0.08 per share, down 27% from a year ago, on revenue of $1.2 billion. Yahoo shares are down 50% over the past 12 months and are trading slightly above their 50-day moving average.

Investors trading into earnings should know that in the near-term, Yahoo is trending toward widening its after-hours move, doing so in two of the last four quarter. On January 27, the stocks rose 4.2% in after-hours trading after earnings beat the Street. The stock widened its move in the following regular session, ending up 7.9%.

Disclosure: no positions