Morning Report: April 21, 2011

Ahead of the Bell: Dow futures are trading up 62 points and S&P futures are trading up 8 points on growing optimism about corporate earnings after Apple reported second quarter earnings results that beat analysts’ estimates. The company announced record profits and surging revenues helped by strong iphones and Macs sales.  Also, American Express, Travelers, and General Electric all reported higher first quarter earnings results. 

  • On the economic calendar today, the Labor Department will release weekly jobless claims figures before the opening.  Also, the Philadelphia Federal Reserve will release its April activity index after the opening.  Economists expect weekly claims to fall to 390,000 from last week's 412,000 claims while the Philly Fed survey is expected to drop to 32.9 from last month's 43.4.  Companies reporting earnings include General Electric, BlackRock, McDonald's, Morgan Stanley, and DuPont among others.  Crude oil is currently trading about $112 a barrel.  The dollar is up against the Japanese yen and down against the euro and the British pound.  
  • Yesterday, stocks surged led by Intel and other technology companies, the DJIA closed at a new multiyear high and the S&P 500 Index broke above its 20-day moving average.   
  • On CNBC today, CEO and Chairman of Southwest Airlines Gary Kelly talked about his company’s first quarter earnings.  The company reported revenues in line with street estimates.  However, fuel cost and safety worries are concerns for the company.  Kelly said his employees did a fantastic job during the bad weather period and he is satisfied with the revenue numbers.  Kelly believes crude oil has reached a peak and he expects crude to go down but prices are unpredictable especially with the events in the middle east, he maintains a cautious outlook through 2012.  Kelly went on to say Southwest is working with the FAA and Boeing to address the damage fuselage on the grounded fleet of aircrafts to make the system more safer.  Kelly pointed out business segment travelers are beginning to improve and consumers segment travelers are a little erratic.
  • Also, on CNBC today President and COO of Marriott International Arne Sorenson talked about his company’s first quarter earnings.  Sorenson said the company had a great quarter except for the impact of some bad weather in the northeast and possible threat of a government shutdown.  Sorenson also said the international businesses has been good, the marketplace is very competitive and Marriott tries to price rooms in range with competitors.  Sorenson pointed out that fuel cost and a weak dollar does not affect Marriott as much.  Sorenson went on to say luxury bookings are coming back as he sees an increase in business consumers and leisure travelers.  Sorenson said at the lower and middle end of the reservation business, he is seeing much stronger bookings and he is encouraged by the sales pace.  
  • Happy Thursday & happy Good Friday, have nice weekend.

Wednesday’s Close

DJIA up 186.79 pts/+1.52%/12,453.54

S&P up 17.74 pts/+1.35%/1,330.36

Nasdaq up 57.54 pts/+2.10%/2,802.51

Thursday’s Futures

Dow Futures up 62.00 pts/+0.48%

S&P Futures up 8.00 pts/+0.60%

Nasdaq Fut up  24.75 pts/+1.05%

Overseas Markets

FTSE +0.23%

CAC 40 +0.67%

NIKKEI 225 +0.82%

HANG SENG +1.01%

Overseas:  World stock markets were up today. European and Asian markets were higher today on positive corporate earnings from the U.S.

Economic Reports:  Jobless Claims expected to be 390K @ 8:30 a.m. and Philadelphia Fed Survey expected to be 36.0 & Leading indicators expected to be 0.3% @ 10:00 a.m.

Top Headlines:    

  • GE announced it is raising its quarterly dividend by $0.01 from $0.14 per share to $0.15 per share.  Travelers (TRV) also said it is increasing its dividend by 14% to $0.41 per share.
  • American International Group Inc. (AIG) said Berkshire Hathaway Inc. (BRK.A/BRK.B) will get $1.65 billion for assuming the risk of asbestos policies from AIG.
  • GM said its vehicle production will be impacted by the earthquake and Tsunami in Japan.  The company says changes to production schedules and temporary suspensions may also be necessary.
  • CNBC reports the DOJ has started a criminal investigation into whether Chipotle Mexican Grill Inc. (CMG) has knowingly hired illegal immigrants at its restaurants.
  • BP Plc said it is suing Halliburton (HAL), Transocean Ltd (RIG), and Cameron International Corp., (CAM) over the failed oil rig and explosion in the Gulf of Mexico last year for over $40 billion.     

 Commodities/Currency:

Gold:up $5.65 to $1,508.85
Oil:up $0.80 to $112.40

EUR/USD 1.44638 +0.0116
USD/JPY 81.9450  -0.6000
GBP/USD 1.6564 +0.0164

Volatility Index (VIX): As of the close of business Wednesday, April 20, the VIX is down 0.76 pts to 15.07

Companies Reporting Quarterly Earnings:   

GE (GE): Q1 EPS of $0.31 beats by $0.03. Revenue of $38.44B (+6.2% Y/Y) beats by $3.8B.

Travellers (TRV): Q1 EPS of $1.89 beats by $0.38. Revenue of $5.43B (+3.5% Y/Y) beats by $0.12B.

American Express (AXP): Q1 EPS of $0.97 beats by $0.04. Revenue of $7.03B beats by $50M.

Apple (AAPL): FQ2 EPS of $6.40 beats by $1.04. Revenue of $24.67B beats by $1.33B. Sees FQ3 EPS of $5.03 vs. consensus of $5.25, revenue of $23B vs. $23.8B consensus.

Morgan Stanley (MS): EPS of $0.50 beats by $0.16. Revenue of $7.6B misses by $0.16B.

Philip Morris (PM): Q1 EPS of $1.06 beats by $0.01. Revenue of $6.79B (+4.5% Y/Y) misses by $0.15B.

Southwest Airlines (LUV): Q1 EPS of $0.03 in-line. Revenue of $3.10B (+18% Y/Y) beats by $0.02B.

Astoria Financial (AF) : EPS of $0.29 beats by $0.07.

Honeywell (HON) : EPS of $0.88 beats by $0.06. Revenue of $8.9B beats by $0.30B.

Patriot Coal (PCX): Q1 EPS of -$0.17 misses by $0.04. Revenue of $577B (+23% Y/Y) beats by $24B.(

Schlumberger (SLB): Q1 EPS of $0.71 misses by $0.05. Revenue of $8.71B (+56% Y/Y) misses by $0.11B.

Weatherford International (WFT): Q1 EPS of $0.10 misses by $0.08. Revenue of $2.85B (+22% Y/Y) beats by $0.03B.

Covidien (COV): FQ2 EPS of $0.93 beats by $0.04. Revenue of $2.80B (+10% Y/Y) beats by $0.06B.

DuPont (DD): Q1 EPS of $1.52 beats by $0.16. Revenue of $10.03B (+18% Y/Y) beats by $0.84B.

Danaher (DHR): Q1 EPS of $0.65 vs consensus of $0.57. Revenue of $3.35B (+11% Y/Y) beats by $0.02B.

Air Products and Chemicals (APD): FQ2 EPS of $1.41 beats by $0.03. Revenue of $2.50B (+11% Y/Y) beats by $0.07B.

BB&T (BBT): Q1 EPS of $0.32 beats by $0.01. Revenue of $2.03B (-7% Y/Y) misses by $0.15B.

Tyco Electronics (TEL): Q1 EPS of $0.71 misses by $0.01. Revenue of $3.47B (+17% Y/Y) misses by $0.52B.

Newmont Mining (NEM): Q1 EPS of $1.04 beats by $0.05. Revenue of $2.46B (+10% Y/Y) beats by $0.02B.(

Today’s Opening and Closing Bells:

Procera Networks, Inc. (PKT) President and Chief Executive Officer James F. Brear will ring the opening bell.  

Office Depot Inc. (ODP) to launch the “Green Business Challenge”.  Office Depot, ICLEI, and City Officials from across the country will ring the closing bell.