Stocks rise on tech and bank earnings

The Dow Jones industrial average (INDU) added 30 points, or 0.3%. The S&P 500 index (SPX) gained 4 points, or 0.3%. The Nasdaq composite (COMP) was up 8 points, or 0.3%.

Earnings: Morgan Stanley (MS, Fortune 500) said it swung to a $1.8 billion profit in the first quarter Wednesday before the bell, as strong trading revenue boosted the Wall Street firm's latest results. Shares of Morgan were up about 4%.

Wells Fargo (WFC, Fortune 500) reported a $2.5 billion profit before the bell, beating Wall Street expectations. The company said that credit conditions have "turned the corner" from the weakness of the financial crisis. Wells shares rose 1.5%.

Overall, the finance sector was up 10.8% in morning trade.

In addition to banks, investors digested quarterly results from several Dow components ahead of the bell, including:

-- AT&T (T, Fortune 500), which beat estimates on a boost from strong sales of Apple's iPhone.

-- Boeing (BA, Fortune 500), whose profit and revenue dropped amid fewer airplane deliveries

-- McDonalds (MCD, Fortune 500), whose earnings rose above predictions as sales rose across all its markets, especially Europe and Asia

--United Technologies (UTX, Fortune 500), which also beat estimates.

Late Tuesday, iPod and Mac maker Apple (AAPL, Fortune 500) posted a record quarter that blew past Wall Street's estimates. Apple shares rose 5% in early trading.

Yahoo (YHOO, Fortune 500) also delivered earnings that beat expectations, although its sales came in below estimates. Shares fell 5% in early trading.

Also, Chrysler announced that it earned its first operating profit since exiting bankruptcy on June 10, 2009. The profit follows nearly $4 billion of losses logged by the automaker during that time.

The results will continue after the markets close, with coffee chain Starbucks (SBUX, Fortune 500) and other major names reporting results.

World markets: European shares drifted lower in morning trading. The FTSE 100 in Britain and France's CAC 40 were both about 0.8% lower, while Germany's DAX fell 0.3%.

Asian markets ended the session mixed. Japan's Nikkei rallied 1.7% and the Shanghai Composite surged 1.8%. The Hang Seng in Hong Kong lost 0.5%.

Other markets: The dollar edged higher against the euro and yen but remained weak versus the pound.

The price of oil gained 24 cents to $84.09 a barrel. Wednesday marked the first day of the June contract. The government's weekly oil inventory report was due at 10:30 a.m. ET.

COMEX gold for June delivery prices were up $1.80 to $1,140.40 an ounce.

Treasury prices were higher, with the yield on the benchmark 10-year note at 3.78%. Bond prices and yields move in opposite directions. 

Stocks and commodities made an astounding comeback in 2009 after a disastrous 2008. Emerging markets and Asia ex-Japan equities posted their best performance last year — with strong 67.7 per cent and 61.7 per cent gains respectively while the MSCI World Equities Index managed only a 23.8 per cent gain.

Unfortunately, equity performance in January 2010 cast a wet blanket over expectations. However the market picked up a positive momentum later in the quarter.

Economic data to date have been encouraging. Many nations, such as China and Singapore, have reported strong economic growth and even lag indicators — such as unemployment rate — have been showing encouraging signs of recovery globally.

We continue to hold our view that risky assets such as equities and commodities will continue to do well in 2010 as more news of economic recovery and strong corporate performance present themselves.

We also believe that the current low interest rate in most parts of the world will come to an end in the later part of the year as more signs of economic recovery turn up. We are therefore bearish on bonds this year.

We suggest investors shift the weight of their portfolios towards equities and commodities and away from bonds. ETFs are extremely helpful when constructing investment portfolios and should be used as the starting point of any portfolio construction.

The global economic recovery however fuels the fear of inflation.

With loose monetary and generous fiscal policies present in many parts of the world, many are now concerned that inflationary pressures will start to force governments to take early evasive action to prevent inflation from becoming a full blown issue. However, others are of the view that the shaky world economy may not be ready for a withdrawal of fiscal policies and a tightening of monetary policy.

These fears will continue to resurface periodically causing stock prices to correct whenever markets gain new highs. We therefore also suggest that investors consistently use available covered warrants to protect their portfolio when equity indices hit new highs (with put warrants) and extend their position (with call warrants) when positive momentum returns.

Bullish outlook for equities and commodities

This article is contributed by Roger Tan and Edmund Seow from SIAS Research.

Stocks rise on earnings

Stocks gain on improved earnings

The Dow Jones industrial average (INDU) added 20 points, or 0.2%. The S&P 500 index (SPX) gained 6 points, or 0.5%. The Nasdaq composite (COMP) lost 10 points or 0.4%.

Stocks ended mostly higher Monday after a choppy trading day as optimism over Citigroup's strong profit report was offset by worries about the fallout from the SEC's fraud suit against Goldman Sachs.

Goldman: Shares of Goldman Sachs (GS, Fortune 500) fell 1% after gaining in pre-market trading. The bank reported first-quarter profit of $3.5 billion Tuesday, delivering a much-needed shot to the firm's ailing reputation as it faces questions over its role in structuring a security tied to subprime mortgages.

On a per-share basis, Goldman earned $5.59 per share. Consensus estimates were for the company to record a profit of $2.4 billion, or $4.01 per share, according to Thomson Reuters.

But investors and analysts will most likely focus on the civil fraud suit brought against by the company last week by the Securities and Exchange Commission.

The fraud suit has weighed on Wall Street, although reports saying regulators were split on the decision to bring charges against Goldman helped lift investor sentiment.

Earnings: IBM (IBM, Fortune 500) posted higher quarterly sales and earnings that topped estimates late Monday. The company also boosted its full-year 2010 earnings forecast. But shares fell 2.8% in morning trading.

Apple (AAPL, Fortune 500) and Yahoo (YHOO, Fortune 500) are due to report their latest financial results after U.S. markets close.

World markets: European shares posted strong gains in early trading. Germany's DAX and France's CAC 40 both gained more than 1%, while the FTSE 100 in Britain was up about 0.7%.

Asian markets ended the session mixed. Japan's Nikkei slipped, while the Hang Seng in Hong Kong rallied 1%.

Other markets: Oil prices rebounded Tuesday after falling nearly 3% the day before.

Crude for May delivery was up $1.15 to $82.60 a barrel. The May contract be volatile Tuesday, the expiration day.

Trading in the June contract has already made it the dominant contract. Crude for June delivery was up 82 cents to $83.95 a barrel.

Meanwhile, the dollar continued to drift, treading water against the euro at about $1.35. The greenback slid 0.4% against the British pound to $1.54. The dollar was up 0.4% versus the yen at ¥92.79.

Treasury prices were lower across the board, with the yield on the benchmark 10-year note edging up to $3.8%. 

Dow pulls out a gain

Aaaaand we're back! America is back! 

We were, at least,  when Newsweek mailed a sell alert to 3.1 million people...

Newsweek's "America's Back: The Remarkable Tale of our Economic Turnaround" issue with a glossy red, white, and blue cover could bring an end to "America's recovery" party.

Historically, publications like Newsweek have had a real knack for being contrarian indicators, hyping the over-hyped and succumbing to the American psyche.

But they're not alone in this business...

When BusinessWeek published its "Death of Equities" cover in 1979, it was time to mortgage the house and plow savings into anything and everything. That very cover was followed by a huge bull market of the 1980s.

When Time published "Home Sweet Home" in 2005, talking up the housing boom, it was time to sell your home and take money out of the market. That very cover called the top of the housing bubble.

And less than a year after his cover shoot as Person of the Year for Time's 1999 issue, Jeff Bezos' Amazon — along with most of the Internet bubble — collapsed more than 90%.

Stocks soar to major milestones

The Dow Jones industrial average (INDU) surged 104 points, or 0.9%, to end at 11,123.11, the highest level since September 2008. Financial and tech shares led the advance.

The S&P 500 index (SPX) gained 13 points, or 1.1%, to close at 1,210.65, marking the first time the index has closed above the 1,200 mark in almost 19 months.

The Nasdaq composite (COMP) added 39 points, or 1.6%, to end at 2,504.86. It was the first time since June 2008 that the index has ended above 2,500.

Year-to-date, the Dow is up 6.7%, the S&P has gained 8.6% and the Nasdaq has soared 10.4% as of Wednesday's close.

The S&P is up 77% from its March 9, 2009 low. However, the index remains 23.5% below the record high set Oct. 9, 2007.

"We were bumping against the 1,200 mark, as close as 1,199, and then backing down," said Art Hogan, chief market strategist at Jefferies & Co. "Crossing that barrier was notable."

The blue-chip Dow and Nasdaq touched fresh 18-month highs Tuesday after slight gains.

"We had an embarrassment of riches today as far as good news goes," Hogan said.

Earnings: JPMorgan Chase (JPM, Fortune 500) reported a $3.3 billion profit for the first quarter, though the bank continued to suffer losses in its consumer loan portfolio.

The New York City-based bank said it earned 74 cents a share during the quarter, up 55% from a year earlier. Analysts surveyed by Thomson Financial were expecting earnings of 64 cents a share.

Shares of JPMorgan ended more than 4% higher.

JPMorgan kicked off the reporting period for big banks, most of which are expected to post a profitable quarter.

"We'll be hearing from 125 S&P 500 companies next week, so we haven't gotten into the meat of it quite yet," said Jefferies' Hogan.

After U.S. markets closed Tuesday, chipmaker Intel (INTC, Fortune 500) reported earnings and revenue that topped Wall Street's estimates. Shares closed 3.3% higher on Wednesday.

"During the worst of the recovery, we were satiated by cost-cutting that boosted bottom-line net income," said Paul Radeke, vice president at KDV Wealth Management. "Now the market is looking for strong top-line revenue, and today it got some of that."

This week's earnings reports are tech heavy, Hogan said, and Intel's results could bode well for companies such as Google (GOOG, Fortune 500) that will report later this week. He expects the technology sector to continue rising in the coming weeks, and energy shares could be a "dark horse" gainer.

Economy: The government's monthly retail sales report and a report on consumer inflation were released before the market opened.

Retail sales jumped 1.6% in March, beating estimates from economists surveyed by Briefing.com. Sales excluding autos rose 0.6%, also topping predictions.

"This string of positive retail sales numbers implies that the rumored death of the American consumer was greatly exaggerated," Hogan said.

The Consumer Price Index (CPI), a measure of consumer inflation, rose 0.1% in March, in line with predictions. Core CPI, which excludes volatile food and energy prices, was unchanged. Economists had forecast a 0.1% jump.

A separate report showed business inventories rose 0.5% in March, slightly higher than the 0.4% jump that was forecast.

Federal Reserve Chairman Ben Bernanke testified before a joint session of Congress on the economic outlook, saying private-sector demand will be "sufficient" to spur moderate recovery in coming months, but more time is needed to recover job losses.

Separately, the Fed released its Beige Book report, which said economic activity expanded "somewhat" in 11 of the central bank's 12 districts.

World markets: Stocks in Europe ended higher, with Britain's FTSE 100, France's CAC 40 and Germany's DAX all in positive territory.

Asian markets also finished the session with gains. Hong Kong's Hang Seng edged higher, and the Nikkei in Japan added 0.4%.

Currencies and commodities: The dollar fell against its major rivals: the euro, pound and yen.

Oil prices snapped a 5-day losing streak, settling up $1.79 to $85.84 a barrel. The government's weekly report on U.S. crude inventories showed oil supplies fell by 2.2 million barrels last week.

COMEX gold for June delivery settled up $6.20 to $1,159.60 an ounce.

Bonds: Prices for U.S. Treasurys fell, with the yield on the benchmark 10-year note rising to 3.83%. Bond prices and yields move in opposite directions.

Market breadth was positive. On the New York Stock Exchange, winners topped losers almost four to one on volume of 1.1 billion shares. On the Nasdaq, advancers also beat decliners four to one, on volume of 3 billion shares. 

Stocks retreat in early trading

The Dow Jones industrial average (INDU) was down 6 points, or less than 0.1%, shortly after the opening bell. The S&P 500 index (SPX) slid about one point and the Nasdaq composite (COMP) dipped 2 points.

Stocks managed gains Monday, with the Dow closing above 11,000 points for the first time in 18 months, as investors welcomed a plan to offer low-cost loans to Greece, tempering fears that the nation might have to default on its debt.

Quarterly reports: Aluminum producer Alcoa (AA, Fortune 500) reported first-quarter earnings late Monday that met expectations, but revenue fell short. Shares slipped nearly 3% in premarket trading.

Chip leader Intel (INTC, Fortune 500) reports results after the close. The Dow component is expected to have earned 38 cents per share after earning 11 cents per share a year ago.

First-quarter earnings for the S&P 500 are forecast to jump nearly 37%, when compared with last year's abysmal first quarter, according to Thomson Reuters. Revenue figures should also be up a rosy 10% from a year earlier.

Looking ahead, JPMorgan Chase (JPM, Fortune 500) reports quarterly results Wednesday, while Google (GOOG, Fortune 500) and Bank of America (BAC, Fortune 500) are due later in the week.

Economy: The government reported a larger-than-expected increase in the U.S. trade gap for February.

The nation's international trade deficit in goods and services increased to $39.7 billion in February from a revised $37 billion in January, the Commerce Department said. Economists surveyed by Briefing.com were expecting the gap to widen to $38.5 billion.

The deficit expanded as exports totaled $143.2 billion, while imports reached $182.9 billion.

World markets: Asian markets ended mostly lower. Hong Kong's Hang Seng slipped 0.1%, while the Nikkei in Japan slid 0.8%.

European markets turned mixed in active trading. Shares in London and Frankfurt were lower, while Paris was unchanged.

Currencies and commodities: The dollar was flat versus the euro, but rose against the pound. It fell versus the yen.

The price of oil slid 75 cents to $83.59 a barrel. Gold declined $5.70 to $1,155.90 an ounce.

Bonds: Prices for U.S. Treasurys fell, with the yield on the benchmark 10-year note at 3.81%. Bond prices and yields move in opposite directions.  

Dow: 11,000 at the finish line

The Dow Jones industrial average (INDU) added 8 points or 0.1%, finishing at 11,005.97, the highest close since Sept. 26, 2008, when it ended at 11,143.13.

"11,000 is a nice number but it's more psychological than anything," said Jim Dunigan, chief investment officer at PNC Wealth Management. "The S&P is getting close to 1,200 and that's another big round number."

The S&P 500 index (SPX) gained 2 points, or 0.2%, ending at 1196.48, an 18-month high. The Nasdaq composite (COMP) edged up 4 points, or 0.2%, to the highest finish since June 19, 2008.

After the close, Dow component Alcoa (AA, Fortune 500) ignited the quarterly reporting period. The aluminum maker posted earnings of 10 cents per share versus a loss of 59 cents a year earlier, meeting the expectations of analysts surveyed by Thomson Reuters. Alcoa reported revenue of $4.89 billion versus $4.147 billion a year ago. Analysts expected revenue of $5.238 billion.

"Alcoa was a pretty good start, but expectations for this earnings period are high and there's the potential for disappointment," Dunigan said.

First-quarter earnings are expected to have risen 37% versus the prior year, while revenue is expected to have risen 10%, according to Thomson Reuters.

Gains are expected to be driven by financials, materials and consumer discretionary -- the sector that includes autos and retailers.

Intel (INTC, Fortune 500) reports results on Tuesday, while Google (GOOG, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500) are due later in the week.

Stocks closed higher Friday at the end of another up week for stocks. The market has risen in seven of the last eight weeks as economic confidence has replaced jitters about a global slowdown that felled markets in January.

Both the Dow and S&P 500 stand at roughly 18-month highs, while the Nasdaq stands at the highest point in nearly two years.

Greece: Investors got another bout of good news on the global front over the weekend, when European leaders agreed to make loans available to debt-burdened Greece.

The 16 countries that use the euro agreed to provide a collective $40 billion, while the International Monetary Fund (IMF) agreed to kick in $13.5 billion.

The loans, should Greece choose to access them, would have interest rates that are lower than what lenders had been requiring in recent days to hold Greek debt. Last Thursday, Greece's borrowing costs hit an all-time high as investors worried the country might default.

Greece is seen as something of the tip of the iceberg, with investors worrying that a default would exacerbate problems in other debt-burdened nations. Greece is one of the so-called PIIGS, along with Portugal, Ireland, Italy and Spain.

Recession questions: Although most economists think that the recession is over, the panel of economists who are responsible for specifying changes in the business cycle aren't sure yet.

The National Bureau of Economic Research said Monday that it is premature to say whether the recession that began in December 2007 has ended. The group is apparently wary to call an end when there is still the threat of a so-called double dip recession.

World markets: In overseas trading, European markets were mixed, with London's FTSE up 0.1%, France's CAC 40 and Germany's DAX both little changed. Asian markets were mixed, with the Hong Kong Hang Seng down 0.3% and the Japanese Nikkei up 0.4%.

Bonds: Treasury prices rallied, lowering the yield on the 10-year note to 3.85% from 3.89% late Friday. The 10-year had risen as high as 4% Monday, an 18-month high. Treasury prices and yields move in opposite directions.

The dollar and commodities: The dollar fell versus the euro and gained against the yen.

COMEX gold for June delivery rose $3 to settle at $1,162.20 per ounce.

U.S. light crude oil for May delivery fell 58 cents to settle at $84.34 a barrel on the New York Mercantile Exchange.

Market breadth was positive. On the New York Stock Exchange, winners beat losers eight to seven on volume of 976 million shares. On the Nasdaq, advancers beat decliners seven to six on volume of 2.06 billion shares.  

Alcoa (AA, Fortune 500) begins the quarterly reporting period, as is traditional, when it reports results after the start of trading Monday. Alcoa is one of five Dow components due to report results this week. The others are Intel (INTC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Bank of America (BAC, Fortune 500) and General Electric (GE, Fortune 500). Tech leader Google is also due to report.

Greece: U.S. investors will also be attuned to developments coming out of Europe, amid speculation that debt-laden Greece could receive a bailout from the European Union and the International Monetary Fund (IMF) shortly.

Greece's finance minister said Friday that details of a previously agreed upon rescue package by Euro zone countries and the IMF were being worked out, even as he also said that the nation didn't need a rescue.

Worries that Greece may default on its mounting debt, destabilizing the euro and sparking a bigger debt crisis amid other vulnerable European nations, have weighed on markets intermittently all year. But the fears were exacerbated last Thursday after Greek borrowing costs spiked to an all-time high.

The analysts both said that the threat of a Greek default has been in the market for a while and has therefore already been priced in to stock valuations, to an extent. Nonetheless, they said that any sign of a crisis spreading would batter U.S. stocks.

Wednesday: JPMorgan Chase, which reports results before the bell, is expected to have earned 64 cents per share versus 40 cents a year ago. JPMorgan is the first of a slew of banks that are expected to report strong profits this week.

Thursday: Tech behemoth Google (GOOG, Fortune 500) reports results after the close. The company is expected to have earned $6.57 per share versus $5.16 per share a year ago.

Friday: Bank of America is expected to report a profit of 9 cents per share in the morning, down from 44 cents per share a year ago.

General Electric is forecast to report a profit of 16 cents per share, down from 26 cents a year ago.

The April Consumer Sentiment index from the University of Michigan is due after the start of trading. Sentiment is expected to have improved to a reading of 75.0 from 73.6 in March.