Stocks Rebound After Early Declines

by: Midnight Trader

4:04 PM, Feb 19, 2010 --

  • DJIA up 9.45 (0.09%) to 10,402.35.
  • S&P 500 up 2.42 (0.22%) to 1,109.17.
  • Nasdaq up 2.16 (0.10%) to 2,243.87.


  • Hang Seng down 2.59%
  • Nikkei down 2.05%
  • FTSE up 0.62%


(+) INTU continues evening response to Q2 beat.

(+) JCP beats with earnings and guides in line to above Street.

(+) SHPGY beats with Q4 results.

(+) XNPT seeing rebound from evening slide that followed FDA complete response.

(+) NVAX presents more flu vaccine data.

(+) HON sees Q1 in line.

(+) PG confirms 2010 earnings outlook; Q4 EPS below year-ago.


(-) DELL sees continued negative reaction to evening earnings.

(-) FSLR outlook straddles Street view.

(-) CSIQ warns for lower gross margins, higher shipments.

(-) APOL guides below Street for Q2, hikes buyback.

(-) CPST selling shares.


Stocks ended Friday trade with modest gains, rebounding from early day declines that kicked in after the Fed announced late Thursday it is removing some of the emergency lending policy it's had in place in response to the financial crisis and recession. The Fed is raising the rate on temporary loans it charges to banks. The move suggests the Fed is growing more confident that the U.S. banking system has recovered from its near-collapse almost two years ago.

Separately, a new government report showed that inflation remains tame which also eased concerns about the economy's direction. The Consumer Price Index rose by a smaller-than-expected 0.2% in January, according to the Labor Department. Excluding food and energy, the index actually slipped 0.1%, its first monthly drop in 27 years, suggesting that deflation is still lurking.

The quarter-point increase in the discount rate to 0.75% surprised investors and analysts, but the the Fed said its action should not be interpreted as a sign it will raise rates that affect consumer and business loans.

Benchmark crude for March delivery closed up 0.9% at $79.81 a barrel in electronic trading on the New York Mercantile Exchange. Gold for April delivery advanced $3.40 to $1,122.10 an ounce.

Looking forward to next week, earnings season slims down a bit, but there are a few top names reporting financials that should help lend direction to the broader market. On Monday, Lowe's (NYSE:LOW), Nordstrom (NYSE:JWN) and RadioShack (NYSE:RSH) are set to post results. Autodesk (NASDAQ:ADSK), Home Depot (NYSE:HD) and Macy's (NYSE:M) are due with quarterly numbers on Tuesday, followed by Blockbuster (BBI) and Saks (NYSE:SKS) on Wednesday. On Thursday, we'll see results from H.J. Heinz (HNZ), Kohl's (NYSE:KSS), Weight Watchers (NYSE:WTW) and Wynn Resorts (NASDAQ:WYNN).

On the economic front, the Case-Shiller 20-City Index and consumer confidence data will be released on Tuesday, followed by new home sales and crude inventories on Wednesday. On Thursday, initial claims, durable orders, and FHFA housing price index data are set for distribution. GDP data, Chicago PMI, University of Michigan consumer survey, and existing home sales data will be released on Friday.

In today's market, tech stock Dell (NASDAQ:DELL) influenced trading early. The stock was hit for sharp declines after the company reported Q4 non-GAAP EPS of $0.28 per share, a penny better than the Street view. Revs were $14.9 billion, vs. expectations of $13.8 billion. Looking forward, Dell saw demand in the important commercial business continuing to return during the fourth quarter and is cautiously optimistic that this trend will continue into fiscal-year 2011. Despite the better-than-expected results, traders were keen to focus on the company's declining gross margins, down about 1% on a year-over-year basis.

Shire (SHPGY) was an upside leader in the health care sector after beating Q4 expectations and reiterating its outlook. Pfizer (NYSE:PFE) shares were up as well, firming higher after competitor United Therapeutics (NASDAQ:UTHR) pulled its European marketing application for a high blood pressure product.

Elsewhere, J.C. Penney (NYSE:JCP) provided some support to consumer stocks after it reported better-than-expected Q4 earnings and set its full year profit view ahead of Street estimates.