Earnings charge markets higher

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

Fall in unemployment numbers and strong earnings drive the markets in positive. Broad gains were reported in trasportation sector, hotels, techs, internet, and metals and mining sectors. Greenspan cautioned on the unsustainability of budget deficits and Chinese need to revalue currency peg.

Labor department reported that last week initial claims for unemployment fell by 36,000 to 296,000 per week. This more than expected plunge in claims put investors in positive mood. However economists cautioned that the statistically better valid 4-week moving average number is a better gauge and that reflected a drop of 8,500 to 330,250 claims.

Chairman Greenspan in his Senate banking testimony mentioned that budget is on an ‘unsustainable’ path and will lead to cycle of more borrowings and increasing part of the budget going to pay for the interest payments. He also cautioned that China will have to revalue the peg ‘sooner than later’ and he is relatively certain that they will do so, but do not know the timing of the revaluation.

Earnings were the star of the day and investors focused on positive earnings from several telecom, tech, hotels, and steel companies. Nucor reported three fold jump, 27% jump, Textron reported 320% jump in earnings. Whirlpool and OfficeMax reported lower than expected earnings. Airlines continued to report losses, Northwest, and Delta report wider losses while JetBlue report lower profit than a year ago. UPS delivered on time the profit growth of 17%.

Quest Diagnostics, Baxter, Schering Plough report profits charging the medical sector higher. Cummins, Nucor, Allegheny Technologies, Weyerheauser reported better than expected earnings. Xerox, MBNA and AmerisourceBergen reported lower than expected earnings.


S&P - UP 1.92%
Nasdaq - UP 2.49%
Dow – UP 2.05%

In Other News

Greenspan cautions on budget deficits and ‘reasonably certain’ on Chinese need to revalue peg
Time Warner and Comcast agreed to buy Adelphia assets for $17.6 billion
In NY gold slipped $2.30 at $434.40 and silver dropped 12 cents to $7.217
Oil futures closed up 17 cents at $54.20 and gasoline futures up 2.5% closed at $1.62 per gallon

Earnings Headlines

Nucor reported 1Q earnings of $2.20 vs. 72 cents a year ago
AT&T reported 1Q earnings of 66 cents vs. 59 cents a year ago
Textron reported 1Q profit of 91 cents vs. 26 cents
Whirlpool reported 1Q lower profit of $1.26 vs. $1.43 a year ago on higher energy and materials cost
Marriott Reported 1Q profit of 61 cents vs. 47 cents and raised 2005 guidance
Northwest and Delta report wider losses while JetBlue report lower profit