Updated from 8:40 a.m. EDT(At 4:15 p.m. EDT) After the morning rush of news headlined by JPMorgan Chase's ( JPM) earnings report, there was little to focus on during the session aside from word that AIG ( AIG) sold its auto insurance unit to Zurich Financial Services for $1.9 billion. For me, personally, I've been spending my time waiting for Google's ( GOOG) earnings release immersed in the sports world, first lamenting the retirement of John Madden and then rooting for the Yankees to lose on Opening Day in their new stadium (full disclosure: I'm a die-hard Red Sox fan, and lately I need as much good news as I can get).
Google's EarningsOh right, Google's earnings. Well, tech stocks will likely trade higher Friday following Google's huge earnings beat. The Internet search giant reported a profit of $5.16 a share, compared to expectations for earnings of $4.93 a share. After deducting traffic acquisition costs, Google recorded $4.07 billion in revenue, roughly in line with estimates. Google shares are already climbing 5.6% in the after-hours session after adding 2.4% Thursday, buoying other Internet names. eBay ( EBAY) was up 2.4% in late trading, Yahoo! ( YHOO) was adding 1.2%, and Amazon.com ( AMZN) was tacking on 0.6%.
Friday Earnings PreviewTwo of the Dow's most closely watched components will be out with earnings ahead of Friday's opening bell. The pressure is now on Citigroup ( C) to keep the good news for financials rolling. Last month, CEO Vikram Pandit said Citigroup had been "profitable" through the first two months of the year. By tomorrow's open, I guess we'll know if the third month was also profitable.
General Electric ( GE) will also grab a lot of attention tomorrow with its own report. GE shares are down more than 23% in 2009 on worries that GE Capital will be required to raise new capital in the near term, even though the company has argued it has a strong capital position with ample liquidity. In addition to the two Dow members, BB&T ( BBT) and Mattel ( MAT) are among those also set to report quarterly results.
Other Friday HeadlinesAt 12:30 p.m. EDT, Federal Reserve Chairman Ben Bernanke will deliver a speech in Washington, D.C., during the Fed's community affairs research conference. Bernanke's speech is expected to focus on challenges presented by innovations in financial services for the underserved. Before that, the lone economic report scheduled for release Friday will come at 9:55 a.m. EDT when the University of Michigan will post the preliminary reading on its consumer sentiment index for April. Economists expect the index to rise to 58.5 from the previous reading of 57.3. MGM Mirage ( MGM) will be a stock to watch Friday. The company was trading 15% lower in the after-hours session Thursday on a report by The Wall Street Journal that billionaire investor Carl Icahn and private-equity fund Oaktree Capital Management have bought up hundreds of millions of dollars of MGM bonds and have told the troubled casino giant it should quickly overhaul its massive debts in bankruptcy. (At 7:52 a.m. EDT) In the spirit of the good bank/bad bank plan and the good automaker/bad automaker idea, I'm going to split today's morning news roundup into two parts.
Thursday's Good News
JPMorgan Chase's ( JPM) first-quarter profit may have slipped 10% from a year ago, but earnings of $2.14 billion, or 40 cents a share, were still better than Wall Street was expecting. The bank also recorded revenue of $26.9 billion, compared with the Thomson Reuters estimate of $22.9 billion. Of course, it wasn't all sunshine for JPMorgan. Defaults are still rising -- credit costs amounted to $10.1 billion in the first quarter, up significantly from a year ago. But JPMorgan's investment bank pulled in a record profit of $1.6 billion on best-ever revenue of $8.3 billion. A year earlier, before JPMorgan bought the nearly collapsed investment bank Bear Stearns, that division posted a loss. So far this morning, JPMorgan shares have been on a roller coaster. After an initial jump higher, the stock pulled back by 2% and shares were lately trading around the unchanged mark. Other bank stocks -- Bank of America ( BAC), Citigroup ( C) and Wells Fargo ( WFC) -- were mixed early on. Similarly, it wasn't all good news in Nokia's ( NOK) latest earnings report. The handset maker saw first-quarter operating profit fall 96% from a year ago as mobile handset shipments dropped 19%. But shares were jumping nearly 9% early Thursday as Nokia's grim report was better than most analysts had expected and offered hints of stability. In other earnings news, Activision Blizzard ( ATVI) said that its March quarter earnings and net revenue are tracking ahead of the company's outlook, thanks to robust retail sales of its video game titles. In February, Activision provided an outlook for the March quarter that called for adjusted net revenue of $550 million and adjusted earnings of 3 cents a share. That's good news, as analysts, on average, are looking for a profit of 4 cents a share on sales of $567.7 million. Shares were up 5.4% in the premarket session.
The IPO market appears to be heating up too. After Bridgepoint Education ( BPI) priced its IPO below its expected range, language software maker Rosetta Stone ( RST) saw its IPO price at $18 a share, above the estimated $15 to $17 range. The stock will begin trading later today on the New York Stock Exchange under the ticker symbol RST. Elsewhere, The Wall Street Journal said that London hedge-fund manager Crispin Odey, who netted large returns last year by shorting U.K. banks, said in his latest monthly report that the recent market rally could be the first signs of a new bull market.