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Market Recap for Thursday, 29th April, 2010

Thursday, was definitely a better day for the bulls. The major indexes all finished in the black, and not even poor earnings reports from Exxon Mobil (NYSE:XOM) and Procter & Gamble (NYSE:PG) (Refer to “Market Outlook for Thursday, 29th April, 2010”) could contain the flow for the day.

The main items of positive influence on the markets are listed below:-

·         The Labor Department noted weekly declines in both initial and continuing jobless claims.

·         An aid package for Greece will be ready to go "in the next days," according to Olli Rehn, the European Union's commissioner for monetary and economic affairs, which greatly relieved investors. Rehn described the bailout as "a multi-annual program that will lead to major fiscal and also structural adjustment."

·         Some very good quarterly reports from various companies, such as Motorola (MOT), Aetna (NYSE:AET), and Starwood Hotels & Resorts (HOT), and Oshkosh Corporation (NYSE:OSK), helped keep the momentum rolling.

·         Some big gains were made on the day….

o   Akamai (AKAM) up by 20%,

o   First Solar (FSLR) up by 18.6% and

o   Invesco (IVZ) up by 9.6%.

The Dow Jones Industrial Average (DJIA – 11,167.32) had a great day with an excellent gain of 122 points, or 1.1%. The S&P 500 Index (SPX – 1,206.78) also performed well to add on 15.4 points, or 1.3%. The Nasdaq Composite (COMP – 2,511.92) also had an extremely good day to end on a gain of 40.2 points, or 1.6%.


Notes of Interest….

·         The Dow Jones Industrial Average (DJIA) had its biggest one-day gain since 5th March, and has now recouped most of its losses suffered on Tuesday. The Dow also climbed back above its 10-day moving average.

·         The S&P 500 Index (SPX) managed to regain its foothold on the 1,200 level, as well as the 10-day trend line.

·         Not to be left behind, The Nasdaq Composite (COMP) has also conquered the psychological barrier of 2,500 again, as well as move back above the 10-day moving average.

·         Due to well-received earnings and economic data, crude oil for June delivery ended the day adding $1.95, or 2.3%, to end at $85.17 per barrel.

·         Gold for June delivery ended the day on a loss of $3.00, or 0.3%, at $1,168.80 per ounce, as many investors are now looking, again, at riskier assets.

Company News Inc (AET)

Aetna Inc (AET) posted better-than-expected quarterly profit on improved medical cost trends, and shares of the health insurer rose 2.9 percent amid easing fears about the new U.S. health reform law.

Quarterly net income rose to $562.6 million, or $1.28 per share, from $437.8 million, or 95 cents per share, a year earlier.

Earnings were 98 cents per share excluding a gain tied to a legal settlement, and 77 cents per share excluding a further benefit from unused claim reserves from prior periods. Analysts on average expected 72 cents, according to Thomson Reuters I/B/E/S.

Revenue edged up to $8.62 billion. Corporation (OSK)

Oshkosh Corporation (OSK) reported that its fiscal second-quarter profit was $292.6 million, or $3.22 per share, surpassing analysts' consensus expectations for a profit of $2.61 per share. Revenue for the period grew 130% to $2.9 billion, topping Wall Street's prediction for sales of $2.7 billion. Gross margin, meanwhile, was increased from 11.1% to 21.9%. Oshkosh Corporation's strong results were buoyed by a spike of nearly 300% in military sales.

Potash Corp. of Saskatchewan (POT) Corp. of Saskatchewan (POT) announced today that its first-quarter net income arrived at $449 million, or $1.47 per share, marking the second-highest first-quarter results in the fertilizer firm's history. Sales for the period weighed in at $1.71 billion, up from $923 million in the year-ago period. Analysts were looking for POT to report less profit of $1.32 per share on $1.48 billion in revenue.

Looking ahead to the remainder of 2010, POT expects full-year earnings to fall between $4.50 and $5.25 per share, compared to analysts' expectations for net income of $5.15 per share.


Starwood Hotels & Resorts (HOT) Hotels & Resorts Worldwide Inc (HOT) posted a first-quarter profit that blew past analyst estimates on Thursday, boosted by last-minute corporate bookings

In the first quarter, net income rose to $30 million, or 16 cents per share, in the first quarter from $6 million, or 3 cents per share, a year earlier.

Excluding special items, Starwood reported earnings of 13 cents per share. Analysts on average were expecting 2 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 5.3 percent to $1.19 billion.

Starwood expects second-quarter earnings between 21 cents and 25 cents per share, besting analyst expectations of 19 cents per share.

For the full year, Starwood sees earnings of 88 cents per share. Analysts on average expect earnings of 75 cents. Bread Company (NASDAQ:PNRA)

Panera Bread Company (PNRA) released its first-quarter earnings on Wednesday, reporting profits of 82 cents per share, matching the consensus estimate. However, the bakery-café fell slightly short of the Street's prediction for first-quarter revenue of $364.76 million, as the Panera Bread Company reported revenue of $362.2 million.

Investors were evidently disappointed, as shares of PNRA gapped more than 3% lower. The stock is currently trading around $79.80. Mobil Corp. (XOM)

Exxon Mobil (XOM) reported that its first quarter profit jumped 38%, driven by higher oil prices. For the quarter, the oil company earned $6.3 billion, or $1.33 a share, up from $4.55 billion, or 92 cents a share, a year ago. The consensus was for earnings-per-share (NYSEARCA:EPS) of $1.41. Revenue surged 41% to $90.25 billion. Yesterday Exxon raised its dividend to 44 cents from 42 cents. (MOT)

Motorola (MOT), the mobile phone maker, in their quarterly report , said that they earned $69 million, or 3 cents per share, compared with a loss of $231 million, or 13 cents per share, a year earlier. This beat the company's own guidance of a loss of 1 to 3 cents for the quarter, and also topped analyst estimates of a loss of a penny. Revenue slipped 6.1% to $5.04 billion. Looking forward, Motorola expects EPS of 7 to 9 cents for Q2, compared with the 3-cent consensus.



Transocean LTD (NYSE:RIG)

Transocean LTD (RIG), which provides offshore drilling services across the globe, have suffered due to an oil slick, caused by BP Plc (NYSE:BP), sending their shares down by more than 8%.

This event started a surge in short-term option activity. Normally there are about 6,000 puts and 7,000 calls per session but today saw about 43,000 put and 45,000 call contracts executed.


SunPower Corporation (SPWRA)

SunPower Corporation (SPWRA) was bombarded on Wednesday, as the shares of the solar concern tumbled to a record low. The equity was likely responding to rival First Solar's (NASDAQ:FSLR) pending $285 million acquisition of NextLight Renewable Power LLC.

By the closing bell, SPWRA saw roughly 7,900 puts cross the tape, more than quadrupling its expected daily volume of fewer than 1,900 puts.


AFLAC Incorporated (NYSE:AFL)

AFLAC Incorporated (AFL) announced its first-quarter earnings on Tuesday, announcing profits of $1.41 per share, surpassing consensus estimates for profits of $1.32. AFLAC Incorporated (AFL) also announced plans for a second-quarter cash dividend of 28 cents per share, payable to AFL shareholders as of May 19.

However, despite this upbeat report, shares of AFL have tumbled roughly 7% since Tuesday.

Option activity was brisk on AFL on Wednesday, with 53,000 contracts traded -- 13 times the stock's usual daily volume of fewer than 3,800 contracts. Puts were most popular, with roughly 36,000 of these bearish bets changing hands -- 18 times AFL's usual put volume of just 1,824.


Diana Shipping Inc. (NYSE:DSX)

Diana Shipping Inc. (DSX) saw put contracts bought at more than 17 times the normal daily volume. By the closing bell, the shipping issue had seen close to 7,300 puts bought, compared to its projected daily volume of fewer than 500 contracts.


Duke Energy Corporation (NYSE:DUK)

Duke Energy Corporation (DUK) is scheduled to release first-quarter figures ahead of the open on Tuesday, May 4. DUK had 21 times the usual volume of option contracts executed on Wednesday, calls being in the majority.


Stocks to Watch

These are companies that are looking promising for the short-to-mid-term future. Consider buying shares in these companies after checking them out thoroughly.


AMERICAN JIANYE GREENTECH HOLDINGS  (OTCBB: AJGH) Jianye Greentech Holdings, Inc. is an alternative fuel company that develops, manufactures, and distributes alcohol-based automobile fuel products in the People's Republic of China. The Company's products are designed to function as a lower-cost, more environmentally friendly alternative to conventional gasoline-based auto fuel.

Mr. Hapeing Wang, President of American Jianye, commented, "Strong demand for our alcohol-based fuel products should produce positive revenue and earnings growth going forward as we continue to add new distributors into our clean fuels distribution network."

"Looking ahead, the company now expects revenues for the first quarter of 2010 to be approximately $15.0 million with net profit of approximately $1.5 million." Wang continued, "These estimates are, of course, based on the availability of product and our ability to develop new sales and distribution channels. But we remain confident that we can achieve these revenue milestones in the coming months."

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Disclosure: no positions held in stocks mentioned