U.S. Extends 3-Day Global Markets Rally

Nichole Harper
08 May, 2013
New York City

U.S. indexes traded flat after positive earnings Electronic Arts and Whole Foods. Global markets extended rally for the third day after German industrial activities was ahead of expectations and Chinese imports rose faster than expected.

[R]11:50 AM New York – U.S. indexes traded flat after positive earnings Electronic Arts and Whole Foods. Global markets extended rally for the third day after German industrial activities was ahead of expectations and Chinese imports rose faster than expected.[/R]

The U.S. market indexes traded near a flat line but with a slight uptick after China reported better than expected trade data and German industrial output was ahead of expectations.

The S&P 500 index increased 0.3% to 1,630 and the narrow index of 30 stocks, Dow Jones Industrial Average gained 0.1% to 15,070.

Earnings results also contributed to positive market sentiment after Whole Foods and Electronic Arts, Disney, CA Inc, Cognizant and Marathon Oil reported better than expected earnings.

European Markets

European markets gained after German industrial orders and output were ahead of expectations.

FTSE 100 index in London increased 0.4% and the DAX index in Frankfurt advanced 0.8%. In Paris, CAC 40 index added 0.8%.

Deutsche Telekom gained 5% to a 7-month high after it reported better than expected quarterly earnings and reiterated annual outlook. The company’s U.S. T-Mobile unit also completed the purchase of Metro PCS on May 1.

Asian Markets

Markets in Asia rallied for the third day this week after China reported higher than expected trade data in April. Exports increased 14.7% and imports rose faster at 16.8% resulting in trade surplus of $18.2 billion.

The Nikkei index in Tokyo gained 0.7% and after the close Toyota Motor reported a four-fold surge in operating profit for the year ending in March.

Hang Seng index in Hong Kong increased 0.9% and Sensex index in Mumbai gained 0.5% as banks and financial services companies report better than expected earnings.

U.S. Stocks in Review

Cognizant Technology Solutions Corporation ((CTSH)) climbed 4.4% or $2.86 to $67.74 after the outsourcing service provider reported revenue in the first quarter ending in March surged 18% to $2.02 billion. Net income in the quarter climbed 17% to $284.2 million or 93 cents a diluted share compared to $243.7 million or 79 cents.

For the second quarter, the company expects revenue of $2.13 billion and diluted earnings per share of 97 cents. For the year, the company expects revenue and anticipated approximately 7% to $8.60 billion and diluted earnings per share $3.95.

Marathon Oil Corporation ((MRO)) rose 20 cents to $34.53 after the energy company said revenues in the first quarter ending in March increased 1% to $4.10 billion. Net income in the quarter dropped 8% to $383 million or 54 cents a diluted share compared to $417 million or 59 cents.

Papa John’s International, Inc ((PZZA)) gained 1.4% or 93 cents to $66.76 after the pizza delivery reported revenues in the first quarter ending in March advanced 7% to $355.6 million. Comparable store sales in the quarter increased to 3.9%.

Net income in the quarter soared 16% to $19.3 million or 85 cents a diluted share compared to $17 million or 69 cents.

Operating income for the quarter jumped 8% to $29.6 million.

The domestic sales at company owned restaurants surged 9.8% to $14.1 million and comparable sales increased 3.9%. North America franchise royalty revenue increased 1% to $215,000 and domestic commissary sales increased 4.6% to $6.3 million, international revenues soared 18.2% to $3.1 million.

For the year, the Papa John’s expects diluted earnings per share in the range of $2.90 to $3.

The Walt Disney Company ((DIS)) slipped 1.6% or $1.10 to $64.97 after the entertainment company stated revenues in the second quarter ending in March jumped 10% to $10.6 billion. Net income in the quarter surged 32% to $1.51 billion or 83 cents a diluted share compared to $1.14 million or 63 cents.

The company added operating income in the quarter advanced 29% to 2.51 billion.

Whole Foods Market, Inc. ((WFM)) surged 10.8% or $10.08 to $102.88 after the natural and organic foods company said sales in the second quarter ending in March climbed 13% to $3.03 billion. Net income in the quarter soared 20% to $142 million or 76 cents a diluted share compared to $118 million or 64 cents.

For the year, the company expects diluted earnings per share between $2.86 and 2.89.