GE Meets Estimates

Elena
13 Apr, 2007
New York City

General Electric reported 2% increase in Q1 earnings, helped by strong demand for electricity-generating turbines, jet engines and other heavy equipment. GE said its profit rose to $4.51 billion, or 44 cents per diluted share, from $4.44 billion, or 42 cents, a year earlier, meeting analyst estimates.

[R]9:45AM U.S. markets opened mixed. Apple weighed on the Nasdaq, while Merck helped the Dow.[/R]
Wall Street started trading mixed on Friday. On the one hand, the market sentiment was lifted by hopes that the Fed Reserve will cut interest rates to boost the nation''s economy, but on the other, technology shares weighed by a product delay at Apple Inc. ((APPL)). The company''s shares dropped 1.2% after it said that the next upgrade of its Mac operating system, Leopard, will be released in October. At the same time, the Dow was supported by Merck & Co. ((MRK)) which surged 7.6% on lifted outlook. Goldman Sachs also upgraded the drug maker to neutral from sell on the back of its raised forecasts. Although it was Merck that provided the biggest boost, General Electric ((GE)) and McDonald''s ((MCD)) also helped the blue-chip average, rising 0.7% and 1.3%, respectively. GE said its Q1 results came in line with analyst expectations and reaffirmed its earnings guidance for 2007. McDonald''s said its worldwide same-store sales rose 8.2% and projected Q1 earnings of 62 cents. In the first hour of trading, the Dow rose 21.87, or 0.17%, to 12,574.83. The Standard & Poor''s 500 index was up 0.45, or 0.03%, at 1,448.25, and the Nasdaq composite index fell 3.61, or 0.15%, to 2,476.71.

[R]Core producer prices remained flat.[/R]
The Department of Labor released its report on wholesale prices in the month of March, showing that prices rose more than economists had expected. At the same time, core prices unexpectedly came in unchanged. The Labor Department said that its producer price index rose 1.0 percent in March following a 1.3 percent increase in February. The increase came in above economist estimates of an increase of about 0.7 percent. The bigger than expected increase in producer prices was largely due to a notable increase in energy prices, which rose 3.6 percent in March after rising 3.5 percent in the previous month. A notable increase in food prices also contributed to the increase in producer prices, with food prices rising 1.4 percent in March following a 1.9 percent increase in February. However, the report also showed that the core producer price index, which excludes food and energy prices, was unchanged in March after rising 0.4 percent in the previous month. Economists had expected core prices to increase by about 0.2 percent.

[R]Trade deficit narrowed to $58.4 billion.[/R]
The Department of Commerce released its report on U.S. international trade in goods and services in the month of February on Friday, showing that the trade deficit unexpectedly narrowed compared to the previous month. The report showed that the trade deficit narrowed to $58.4 billion in February from a revised $58.9 billion in January. Economists had expected the deficit to widen to $60.5 billion from the $59.1 billion originally reported for the previous month. The narrower trade deficit reflected a decrease in the value of imports, which fell 1.8 percent to $182.4 billion in February from $185.7 billion in the previous month. The drop in the value of imports came amid a 2.1 percent drop in the value of goods imports. Nonetheless, the value of exports also fell during the month, dropping 2.2 percent to $124.0 billion in February from $126.8 billion in January. The value of exports of goods and services both fell. The report also showed that the goods deficit narrowed to $64.5 billion in February from $65.2 billion in January, while the services surplus fell to $6.0 billion from $6.3 billion.


[R]9:15AM Stock futures gained on tame inflation.[/R]
U.S. stock futures pointed to a higher opening on Friday, boosted by news of tame core producer prices and positive earnings and forecasts from GM, Merck and McDonald''s. The Labor Department reported that wholesale prices rose 1% in March due to more expensive gasoline and food, while core prices remained unchanged. General Motors ((GM)) rose 1% before the open after the bellwether''''s Q1 results came in line with analysts expectations. Merck ((MRK)) rose 4.3% after lifting its profit forecast for the year, citing a strong demand for its products. McDonald''s ((MCD)) said worldwide same-store sales rose 8.2% and said it expects Q1 earnings of 62 cents, up vs. analyst expectations of 57 cents per share. Apple ((APPL)) fell 1.3% in pre-market trading after saying it would delay the release of Leopard, the next upgrade of its Mac operating system. Dow futures expiring in June rose 26.00, or 0.21%, at 12,630. Standard & Poor''s 500 index futures rose 2.80, or 0.19%, to 1,458.30, and Nasdaq 100 futures rose 2.75, or 0.15%, to 1,830.50.