Stock Futures, Bonds Looking Higher
With the bond market back from its little vacation in a decidedly better mood, stocks look set to move higher in a morning chock-full of earnings reports.
As of 9:00 a.m., the
S&P 500
futures are up 2.40, indicating a positive open for stocks. The 30-year Treasury bond is up 17/32 at 99 22/32, dropping the yield to 6.40%. Treasury traders will be tuning in to watch jolly old
Alan Greenspan
give a speech at the
Cato Institute
at 9:15 a.m. And keeping their fingers crossed.
"It looks pretty good, but we're going to have to see what Mr. Greenspan has to say," says Bill Meehan, chief market analyst at
Cantor Fitzgerald
. "I think the earnings are fairly positive. I think the money flows are strong." The only thing that Meehan thinks will knock any wind out of the market short term is if
Intel
(INTC) - Get Intel Corporation (INTC) Report
doesn't hit its numbers when it reports earnings after the close today. It's an eventuality that Meehan's betting on.
"My gut feeling is that they might come in a little light," he says. "I'm hoping they do. I'd like to go in and buy some tech stocks if they weaken on a disappointment from Intel." Meehan thinks that tech will be the main feature in the next leg of the bull market.
"Tech is really where you want to be," he says. "I think money inflows at the beginning of the year are likely to blow away the record inflows we've seen in the last two years. I think we'll put stocks to levels where they're really stretched and frankly irrational. This new era will end like all the other new eras before it, but it's going to be an awful lot of fun getting there."
Texas Instruments
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showed that it deserved its run-up yesterday. The company reported third-quarter earnings of $1.35, 14 cents better than consensus estimates.
Dow-component
Johnson & Johnson
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reported third-quarter earnings of 64 cents per share, in line with estimates.
Dow-component
Eastman Kodak
(EK)
reported third-quarter earnings of 71 cents per share, in line with consensus estimates (which were lowered after Kodak warned in September). The company said that the currency impact from the strong dollar reduced earnings by 20 cents per share. Must be selling a lot of film in Malaysia.
Sprint
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reported third-quarter earnings of 49 cents per share, 3 cents lower than consensus estimates. The company said that it lost 44 cents per share in after-tax losses from joint ventures and emerging businesses. (Analysts appear to have included at least the bulk of those losses in their estimates.)
Textron
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reported third-quarter earnings of 81 cents per share, in line with consensus estimates.
Merrill Lynch
(MER)
reported third-quarter earnings of $1.25 per share, 4 cents better than consensus estimates.
H.F. Ahmanson
(AHM)
reported third-quarter earnings of 84 cents per share, a penny ahead of consensus estimates.
Hertz
(HRZ)
reported third-quarter earnings of 86 cents per share, a penny higher than estimates.
Costco
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posted fourth-quarter earnings of 56 cents per share, before one-time charges of 2 cents per share. Consensus estimates were for the company to earn 52 cents per share.
C-Cube
announced third-quarter earnings of 25 cents per share, a nickel better than consensus expectations.
The Wall Street Journal
reports that
IBM
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, blindsided by the advent of the $1,000 PC, will fold its consumer PC division into its business division.
After an early morning swoon, Japanese stocks managed to move higher in light trade. Many investors are waiting it out for the government's economic stimulus package, set to be announced next week. But the government isn't expected to make the kinds of broad strokes that the market would like to see, and sentiment remains low. The
Nikkei
closed up 101.69 to close at 17,306.39.
A government land auction that was somewhat less than frothy put a damper on Hong Kong stocks. With property stocks leading the way, the
Hang Seng
fell 236.34 to close at 13,836.56.
After yesterday's "We are the World" merger hysteria, European stocks took a bit of a break. In Germany, the
Dax
closed down 29.03 at 4202.37. In London, the
FTSE
is down 4.40 at 5295.70.
