Apple, Starbucks Up; M Stanley, Wells Fargo Down

Mayank Mehta
22 Jul, 2009
New York City

U.S. stocks in the early morning traded sideways after Morgan Stanley and Wells Fargo disappointed investors. Home builders edged higher after home prices increased in May. Starbucks and Apple lead gainers in early trading. Advanced Micro declined after it reported larger than expected loss.

[R]10:30 AM New York – U.S. stocks in the early morning traded sideways after Morgan Stanley and Wells Fargo disappointed investors. Home builders edged higher after the prices in May increased. Starbucks and Apple lead gainers in early trading.[/R]

Stocks gyrated after the release of earnings from Starbucks, Yahoo, Altria, Delta Airlines and AMD.

Morgan Stanley reported its third quarterly loss in a row. KeyCorp reported narrower loss and Wells Fargo missed estimates. Home builders edged higher after Federal Housing Finance Agency said home prices increased 0.9% in May from April but declined 5.6% from a year ago.

S&P 500 index decreased 0.53 to 954.05. Of the stocks in S&P 500 index, 279 increased, 211 decreased and 10 were unchanged.

Other Movers

AirTran Holdings Inc ((AAI)) increased 10.9% to $6.38 after the discount carrier reported net income of $78.4 million or 56 cents a share compared to a loss of $14.8 million or 14 cents a share in the quarter a year ago.

Altria Group ((MO)) increased 4 cents to $17.37 after it reported second quarter revenues increased 33% to $6.72 billion and net income increase of 8.7% to $1.01 billion. The company raised guidance for the full year operating and adjusted earnings.

Apple ((AAPL)) increased 4.5% to $158.32 after the company released fiscal third quarter earnings of $1.35 a share or $1.23 earnings per share on revenues of $8.34 billion.

Revenues in the quarter a year ago were $7.46 billion and earnings were $1.07 billion or $1.19 a share. iPhone sales surged 626% to 5.2 million in the quarter, Macintosh computer sales increased 4% to 2.6 million and iPod sales declined 7% to 10.2 million.

The company guided for the fourth quarter earnings between $1.18 and $1.23 a share on revenues between $8.7 billion and $8.9 billion.

Advanced Micro Devices Inc ((AMD)) decreased 13.2% to $3.54 after it posted second quarter net loss of $335 million or 49 cents a share. Revenues declined 13% to $1.36 billion and gross margin plunged to 37%.

American Movil S.A.B. de C.V. ((AMX)) increased 3% to $42.49 added 3.7 million subscribers in the second quarter. Net revenues in the second quarter increased 11.2% to 94 billion peso and net income increase of 27.5% to 22.5 billion pesos. Earnings per ADR increased to $1.03

Delta Air Lines, Inc ((DAL)) increased 10 cents to $6.16 after it reported second quarter loss of 31 cents a share on revenues rise of 27% to $7 billion. The revenues would have been 23% lower on a combined basis and cargo revenues declined 54%.

KeyCorp ((KEY)) declined 5% to $4.57 after the regional bank reported second quarter loss of 68 cents a share or $390 million compared to loss of $1.09 a share or $536 million. Loan loss reserves increased to $2.5 billion or 3.53% of total loans.

Morgan Stanley declined 21 cents to $27.32 after it reported second quarter revenues declined to $5.4 billion from $6.1 billion a year ago. Net loss in the quarter was $159 million or $1.37 a share compared to income of $689 million or $0.61 a share. This is the third quarterly loss at the investment banker and trader.

Starbucks ((SBUX)) surged 15.3% to $16.94 after it reported third quarter earnings of 20 cents a share or $151.5 million on sales decline of nearly 10% to $2.4 billion. The company guided fiscal 2009 earnings between 74 cents and 75 cents a share and increased its cost cut target to $550 million from $500 million.

Wells Fargo & Company ((WFC)) declined $1.24 or 4.9% to $24.11 after it reported net revenues surged 68% to $14.3 billion in the second quarter and net income in the second quarter surged 47% to $2.58 billion or 58 cents a share compared to $1.75 billion or 53 cents a share. Wachovia acquisition contributed 39% to the gross revenues of $22.5 billion.

Yahoo Inc ((YHOO)) was unchanged at $16.75 after it reported second quarter earnings of $143 million or 10 cents a share up from $132.4 million or 9 cents a share. Net revenues declined to $1.14 billion from $1.35 billion and forecasted revenues between $1.45 billion and $1.55 billion in the third quarter.