Equities Update: Earnings Beats Yield New High

4:10 PM, Oct 19, 2009 --

• NYSE up 88.3 (1.2%) to 7,222.21.
• DJIA up 96.28 (1%) to 10,092.
• S&P 500 up 10.23 (0.9%) to 1,098.
• Nasdaq up 19.5 (0.9%) to 2,176.

GLOBAL SENTIMENT

• Hang Seng up 1.23%
• Nikkei down 0.21%
• FTSE up 1.12%

UPSIDE MOVERS

(+) CIT amends restructuring plan.

(+) IPCS sold to Sprint Nextel for $24/share.

(+) TRBN reports positive Phase 2b retreatment stufy of TRU-015.

(+) BEST inks deal to supply coated food-safe packaging.

(+) ALLI sold to HIG Capital for $6.60/share.

(+) AEZS to complete Phase 3 trial of Macimorelin as first oral diagnostic test for growth hormone deficiency.

(+) RNN reports positive study results for depression treatment.

(+) FIGI inks new contracts.

(+) APC gets favorble Barron's coverage.

(+) BPOP reports smaller Q3 loss vs year-ago quarter.

DOWNSIDE MOVERS

(-) HAS beats with Q3 EPS, but gain largely on cost cuts.

(-) IDCC declines after ITC says Nokia did not infringe on patents.

(-) BEXP selling shares.

(-) AMGN says FDA requests more information on Prolia BLA.

(-) FNM, FRE downgraded.

MARKET DIRECTION

Stock averages closed up around 1% and in the upper end of the day's range. Gains shaped up after a brief swoon into the red in early trading. Stocks have continued to trade at 2009 highs as most earnings meet or top expectations, in many cases due to cost-cutting. Crude closed up 1.4% at a near one-year high of $79.61 a barrel. The dollar fell after the New York Fed clarified that recent tests and speculation were not an indication of immediate action.

The New York Fed confirmed it has tested reverse repurchase agreements, to prepare for when or if policy makers decide they should be used. The tests are "a matter of prudent advance planning by the Federal Reserve, and no inference should be drawn about the timing of monetary policy tightening," the bank said in a statement.

In a week of big earnings reports, the market gained some positive momentum from anticipated filings by Apple Inc. (AAPL) and Texas Instruments (TXN), which will announce quarterly results after the bell tonight.

Hasbro (HAS) gained then fell after the toymaker posted higher-than-expected quarterly profit this morning, boosted by movie-related toy sales, although revenues missed the Street.

Gannett Co. (GCI), publisher of USAToday and other newspapers, also beat the Street on earnings.

Diversified manufacturer Eaton Corp. (ETN) topped expectations as well, although quarterly profits were off sharply from last year's, and said it saw signs of recovery in its markets.

So far, some 61 companies in the S&P 500 have reported earnings, with 79% topping Street expectations, according to data compiled by Thomson Reuters.

Financial stocks were mixed; BB&T Corp (BBT) reported a sharp drop in Q3 profit, but said its loan problems are under control and not as bad as Q2's situation. Fannie Mae (FNM) and Freddie Mac (FRE) were both downgraded this morning, adding to the sector's woes.

In merger news, iPCS (IPCS) surged after the company agreed to be acquired by Sprint Nextel (S) for about $831 million, including the assumption of $405 million in debt.

Comments

[Smartinvest...:]

Guys the real question is:

Is this all from increased revenue or is it just fancy accounting work. I fear that it's the later! In fact I wrote a piece on my blog about exactly why I think this rally won't hold. Please check it out and leave comments or reply to this post with your thoughts. It's too much to copy and paste here so check it out

thinking1440.blogspot....

Oct 20 01:14 AM