Markets Trade in a Tight Range

123jump.com Staff
19 Apr, 2005
New York City

March wholesale inflation of 0.7%, below expectations, sparked market rally in the morning supported by steady stream of earning in financial sector, home building and tech companies which led to averages close higher.

Two separate government reports offered mixed picture. The Labor department reported inflation at wholesale level jumped 0.7% in March and in the last 12 months to 4.9%. Outside the energy area there was indication of inflation intensifying. Commerce department reported new housing construction posted 17.6% drop in activity, sharpest in last 14 years. However, most housing demand at most builders remain robust. The latest survey of National Association of Home Builders show the activity index had slightly dropped from 70 in March to 67 in April. Last week a survey of the Mortgage application showed a 6.4% increase.

Drug stocks were in the news today. Pfizer reported sharply lower earnings 4 cents vs. 30 cents a year ago on several charges including related to Bextra withdrawal. Johnson & Johnson reported 1Q earnings of 97 cents vs. 83 cents a year ago on strong sales increase, 20% in the international and 5% in domestic market.

General Motors reported 1Q loss of $1.21 billion dollars mostly related to healthcare charges. The company’s market share declined to 25.7% from 27%.

Financial stocks were moving higher today as Merrill Lynch reported earnings beating the estimates by 4 cents, State Street beat the estimates by 5 cents and raised the 2005 earnings guidance, Northern Trust beat the estimates by 3 cents.


In Other News

Indonesia’s government recommended that it should leave OPEC as the country has turned net oil importer
European Markets closed higher on the strength of NY trading and strong earnings performance by Swiss drug maker Roche.
Singapore government is considering 18 proposals to avoid $3 billion worth of two casinos
Markets in Argentina, Brazil and Mexico close higher than 2%. Mexico had lost 6% in last four trading sessions
New Homes construction in March declined by 17.6% a largest decline in 14 years
Oil up 4%, NY gasoline up 5% and June gold up $5.40

Earnings News

D.R. Horton, Texas based home builder, reported 2Q earnings of 92 cents vs. 60 cents a year ago
Coca-Cola reported 1Q earnings of 42 cents vs. 47 cents a year despite revenue growth of 4% and unit case volume growth in the North American division of 3%
MGM Mirage reported 1Q earnings of 75 cents vs. 72 cents a year ago
Pfizer reported 1Q earnings of 4 cents vs. 30 cents a year ago
Johnson & Johnson reported 1Q profit of 97 cents vs. 83 cents a year ago
Merrill Lynch reported 1Q of $1.21 meeting the earnings a year ago
Lucent reported 2Q earnings of 6 cents vs. 2 cents a year ago