YAHOO [BRIEFING.COM]: Today's 1.7% rally in stocks took the S&P
500 back to flat on the week, after a somewhat disappointing start to earnings
season. Today's earnings from financial heavyweights J.P. Morgan Chase (JPM 36.07, +2.03) and Wells Fargo (WFC 33.91, +1.06) provided a boost to
the financial sector, which was the strongest sector in the market. While
today's results were taken as a positive, there have been several warnings in
the tech sector and lackluster results from the majority of other companies
that have reported thus far.
Looking more closely at today's earnings, J.P. Morgan reported its highly
anticipated second quarter results, and gave additional details on the
highly-publicized 'London Whale' trade. The loss from the trade is
approximately $5.8 billion year-to-date, and statements that the trade has been
largely unwound soothed some fears. Overall results would be viewed as 'noisy'
given the number of one-time items that included the CIO loss, DVAs, reserve builds, and litigation expense. The
underlying performance of the Investment Bank unit and Housing was a positive
for the firm, and has helped shares recover. Wells Fargo
posted numbers that were slightly better than consensus as housing helped
provide a solid quarter for the bank in a difficult environment.
Aside from the big bank earnings, this morning's data showed PPI run at a
hotter than expected 0.1% month over month clip and a Michigan Sentiment number
that fell short of estimates with a 72.0 print. The equity market saw no
reaction to the negative sentiment reading.
The euro hit multi-year year lows this week, but gained sharply vs. the dollar
shortly after today's
Looking back on the week, Alcoa
(AA 8.42, +0.12) kicked off earnings season reporting in-line EPS and better
than expected revenue. AA also reaffirmed its forecast for 2012. The S&P
finished nearly unchanged on Monday.
On Tuesday, markets closed lower for a fourth consecutive session as a drop of
1.0% saw the Nasdaq pace the
decline. Losses accelerated mid-day after Cummins (CMI 88.63, +2.86) announced
it expects its full-year revenue outlook for 2012 to match 2011 despite prior
guidance suggesting an increase of 10%.
On Wednesday, a late-day rally lifted the S&P 500 into positive territory
moments ahead of the close, but the index finished with fractional losses to
close lower for a fifth straight session. The FOMC Minutes failed to mention more
quantitative easing by the Fed, but suggested ‘further policy stimulus likely
would be necessary to promote satisfactory growth,' and that the Fed should
study ‘new tools' for easing. The minutes were taken as a disappointment for
stocks.
On Thursday, things were quiet ahead of the bank earnings and Chinese GDP data
overnight as the S&P fell 0.5% on the day.
Following a notable rally in commodities this morning, gains were
largely held and many ended the day near their session highs.
Oil ended 1.3% higher at $87.16. Crude oil ran to a new session high of $87.62
in the afternoon session, just about 10 minutes before floor trading ended and
finished the day just below that high. Oil ended 1.3% higher at $87.16. Natural
gas continued to chop around the unchanged line for most of the session,
finishing the day unchanged at $2.88.
In the metals space, gold and silver remained in positive territory rally this
morning's rally, but gold ended the day with stronger gains. Gold hit a Hod of $1596.50 and finished the day just below that level
at $1578.70, up 1.7%. Silver pulled back from its session high and erased most
of its gains, ending 0.8% higher at $27.37.
Next week, earnings season will dominate the headlines and have a bigger
influence on the market. Over 200 companies will report Q2 results, including
many Dow components; most of the large cap financials and some major technology
bellwethers. Citigroup
(C 20.02, -0.02) will kick things off on Monday morning.DJ30 +203.82 NASDAQ
+42.28 SP500 +22.02 NASDAQ Adv/Vol/Dec 1827/1.3
bln/660 NYSE Adv/Vol/Dec 2551/683 mln/520