U.S. Stocks Gain; Ford, Schlumberger Net Rise

Arthi Gupta
23 Jul, 2010
New York City

U.S. stocks trade higher after positive earnings momentum and global economic data. The House of Representatives approved the extension of the unemployment benefits. BP suspends relief well drilling operations as Tropical Storm Bonnie nears the Gulf of Mexico.

[R]9:35 AM New York – U.S. stocks trade higher after positive earnings momentum and global economic data. The House of Representatives approved the extension of the unemployment benefits. BP suspends relief well drilling operations as Tropical Storm Bonnie nears the Gulf of Mexico.[/R]

U.S. and Asian markets gained after better-than-estimated earnings from several large U.S. corporations. European markets traded mixed.

Ford and Schlumberger second quarter profit increase more than expected.

Ford Motor Co. reported second-quarter revenues rose 15% to $31.3 billion from $27.2 billion a year ago. Net income in the quarter increased 13% to $2.6 billion or 61 cents per diluted share from $2.3 billion or 69 cents a share a year-ago quarter.

Schlumberger Limited reported second-quarter revenue climbed 7% to $5.94 billion compared to $5.53 billion in the prior-year quarter. Net income in the quarter soared 33% to $818 million or 68 cents per diluted share compared to $613 million or 51 cents per share in the year-ago quarter.

The Federal Reserve Bank of New York President William Dudley noted further slowdown in the pace of U.S. recovery this quarter.

The House of Representatives voted 272 to 152 to pass a bill to extend unemployment benefits to workers on Thursday. The bill retroactively extends the Emergency Unemployment Compensation program through November 2010.

President Barack Obama is expected to sign this bill into law. Obama said, ""Americans who are working day and night to get back on their feet and support their families in these tough economic times deserve more than obstruction and partisan game-playing.""

Federal Reserve Bank of New York President William Dudley said the U.S. recovery is likely to slow down this quarter, although a double-dip recession is unlikely. He also said the New York area''s recovery is likely to continue at a moderate pace, driven by the manufacturing sector.

Dudley stated that U.S. economic activity has expanded for four consecutive quarters but at modest rates when compared with early stages of past recoveries. He further reiterated that the road to recovery has been bumpy as relatively weak consumer spending and continued volatility in the financial markets.

BP today provided an update on developments in the response to the oil well leak in the Gulf of Mexico.

The company stated relief well activities at the MC252 well site have been temporarily suspended because of potentially adverse weather associated with Tropical Storm Bonnie projected to track into the Gulf of Mexico. BP sought the approval for the temporary suspension from the National Incident Commander and direction of federal government.

The company further stated the well has been shut-in for integrity testing the past seven days. However, BP will continue to monitor the MC252 well as long as weather permits and duration of the suspension of relief well activities will be dependent on the weather.

Dell Inc. said it reached a settlement with the SEC resolving the investigation into Dell''s disclosures and alleged omissions prior to fiscal 2008 regarding certain aspects of its commercial relationship with Intel Corp. and into separate accounting and financial reporting matters.

The company’s settlement requires it to pay a civil monetary penalty of $100 million. In addition, Michael Dell agreed to pay a civil penalty of $4 million.

Dell said, “We are pleased to have resolved this matter. We are committed to maintaining clear and accurate reporting of our periodic results, supporting our customers, and executing our growth strategy.”

The settlements with the company and Michael Dell are subject to approval by a U.S. District Court.

Traders are awaiting the results of the European bank stress tests today. The stress tests, conducted by central banks and coordinated by the Committee of European Banking Supervisors, include a total of 91 of the biggest banks, representing 65% of the European banking industry.