Markets Higher, Closing News 7/15/11

Markets closed higher after a choppy trading session today powered by earnings reports from Google, Citi, Genuine Parts Company,theresults of the European stress tests, and economic data reported this morning.  The Dow finished the week down 0.61%.


President Obama held a news conference today, discussing the pending August 2nd debt ceiling crisis.  The President argued that in order to protect the US Economy, Democrats and Republicans need to find a way to both increase the debt ceiling as well as eliminate the federal deficit.  President Obama asked leaders from both parties to present their plans for addressing the debt ceiling to him tomorrow.


The European Banking Authority announced the results of its stress test of the European Banks today.  Of the 90 banks tested, only eight (five Spanish, two Greek, and one Austrian) were unable to demonstrate they could maintain 5% tier one capital under the scenarios tested.  The summary report on the stress test can be found here.


US Consumer Sentiment fell to 63.8 in July, the lowest reading since March 2009.  Economists had been looking for the reading to rise to 72.5, but high unemployment and uncertainty about the debt ceiling weighed on consumers. 


CPI fell -0.2% last month, the largest drop in a year, in June after oil fell 4.35% in the month.  The core reading (stripping out oil) came in slightly above expectations at 0.3% vs. forecasts of 0.2%.  The Empire State Manufacturing Index fell for the second consecutive month (June was the first negative reading since November 2010), reported at -3.76 vs. forecasts of +4.50. 


My favorite soccer club, Real Madrid, are currently in Los Angeles on their pre-season tour. I thought I was a pretty serious fan, but I’m not sure I’m willing to risk getting hit by a golf cart to get an in-person look at the players.  In other news from the beautiful game, don’t forget to cheer on the US Women on Sunday as they play Japan for the Women’s World Cup.


Market Indices/Statistics:



  • Dow closed up 42.61 pts/+0.34% to 12,479.73

  • S&P closed up  7.27 pts/+7.27% to 1,316.14

  • Nasdaq closed up 27.13 pts/+0.98% to 2,789.80

  • 15 of the 30 Dow stocks closed higher /13 closed lower / Wal-Mart and Kraft were flat

  • 7 of the10 S&P 500 sectors closed higher

  • Energy was the best performing sector (up 2.34%)

  • Health Care was the worst performing sector (down 0.97%)

  • The VIX was down 1.26 pts to 19.54

  • Oil is up $1.56 to $97.67

  • Nat Gas is up $0.165 to $4.522

  • Gold is up $4.30 to $1,593.70

  • Euro vs. Dollar up $0.0014 to $1.4156

  • Dollar vs. Yen down $0.07 to $79.06

Companies in the News:


Shares of Clorox Company traded 8.94% higher to $74.55 after Carl Icahn offered to buy Clorox at $76.50 per share before the bell.  Clorox confirmed it has received the bid, and its board of directors is consulting financial and legal advisers and will review Icahn’s proposal.


Petrohawk Energy Corp. shot higher today (+62.49% to $38.17) after announcing it will be acquired by BHP Billiton for $38.75 per share in a deal valued at $12 billion.  BHP shares fell 1.30% to $91.08 in trading today.


Ralcorp Holdings announced they will separate Ralcorp and Post Foods, and spin off the pieces into two separate publicly-traded companies.  RAH also updated guidance, saying FY11 earnings are now expected to be $5.20-5.35 vs. consensus of $5.35 per share. Shares of RAH traded 0.72% lower to $86.00.


Earnings:


Citigroup shares fell today (-1.64% to $38.38) after reporting Q2 earnings per share of $1.09 on $20.6 billion in revenue, beating the analysts’ consensus of $0.96 per share on $19.89 billion.  Shares were under pressure because investors see the $2 billion in revenue drawn from credit reserves as lowering the quality of Citi’s beat.


Shares of Genuine Parts Company traded higher (+3.59% to $57.10) after reporting Q2 earnings that beat on both top and bottom lines.  GPC reported Q2 earnings per share of $0.96 on $3.2 billion vs. forecasts of $0.89 per share on $3.11 billion revenue.


Valmont Industries shares gained 8.41% to $109.71 after reporting Q2 earnings per share of $1.72 on $668 million, healthily beating analysts’ consensus of $1.45 per share on $615 million in revenue.  Shares of VMI were also helped by increased guidance, as VMI announced they see FY earnings per share as $5.70-5.90, ahead of the $5.35 per share expected.


Coming Monday:


Economic Reports:None; Earnings from Boston Scientific, Halliburton and IBM.