Stocks Edge Off Early Gains
07/23/08 - 12:23 PM EDT
Mike Taylor
Paulsen said that as concern about sky-high oil prices abates, investors begin to focus on other indicators that the economy is in decent shape. He said investors have seen generally solid earnings from the majority of companies in the S&P 500, results from the financials that aren't nearly as bad as was feared and unemployment claims that remain within control. "When oil was going up, none of this was focused on," he said.
Before Wednesday's open, Boeing (BA Quote - Cramer on BA - Stock Picks) and AT&T (T Quote - Cramer on T - Stock Picks), two members of the Dow's 30-stock club, reported earnings. Boeing shares tumbled 3.3% as the company reaffirmed forward guidance, but its earnings for the second quarter dropped 19% from a year earlier. AT&T's profit rose 30% year over year and was in line with expectations. The stock inched up 3.4%. Traders also heard from integrated oil company ConocoPhillips (COP Quote - Cramer on COP - Stock Picks), which saw adjusted income rise 13% year over year, beating estimates. Northwest Airlines (NWA Quote - Cramer on NWA - Stock Picks) marked a $377 million loss on rising fuel costs. On the health care side, biotech firm Genzyme (GENZ Quote - Cramer on GENZ - Stock Picks) saw earnings fall on rising costs, but excluding items the company edged ahead of Wall Street's expectations. Big Pharma firm GlaxoSmithKline (GSK Quote - Cramer on GSK - Stock Picks) likewise saw profits decline, and it said it would delay a planned share repurchase. Pfizer (PFE Quote - Cramer on PFE - Stock Picks), a Dow component, posted profits that more than doubled year over year and topped the Wall Street consensus. The solid quarter owed largely to a decline in restructuring charges and overseas sales buoyed by a weak dollar. Fellow drugmaker Wyeth (WYE Quote - Cramer on WYE - Stock Picks) also edged out an earnings beat and raised guidance. Also showing strength thanks to sales abroad, fast-food giant and Dow stock McDonald's (MCD Quote - Cramer on MCD - Stock Picks) swung to a profit, besting analyst forecasts.
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