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Wall Street Turns Optimistic After Yesterday's Setback

Wall Street Turns Optimistic After Yesterday's Setback
4/20/2012 6:34 AM ET

Cautious optimism is seen on Wall Street on Friday, as traders seem to have shaken off their economic pessimism as they prepare to digest another batch of earnings and some key economic events. The G20 finance ministers and central bank governors are meeting in Washington on the sidelines of the semi-annual spring meetings of the World Bank and the International Monetary Fund. Particularly, earnings report from General Electric (GE), considered a barometer of economic health, could impact market mood.

Earlier in the day, Asian stocks closed mostly lower, while the European markets are trading firmer now following the release a positive German business sentiment reading. Meanwhile, offering some support are rumors that suggest that the Chinese central bank may announce a reserve requirement ratio reduction.

As of 6:30 am ET, the Dow futures are adding 64 points, the S&P 500 futures are advancing 6.70 points and the Nasdaq 100 futures are moving up 13 points.

U.S. stocks retreated on Thursday, as doubts concerning the domestic economy's health resurfaced following the release of some lackluster data.

In corporate news, Microsoft's (MSFT) third quarter earnings of 60 cents per share, better then the consensus estimate of 58 cents per share. Revenues rose 6 percent to $17.41 billion, squeezing past the $17.18 billion consensus estimates.

Expeditors International (EXPD) released preliminary results for the first quarter, expecting earnings of 35-37 cents per share, which is below the consensus estimate of 43 cents per share.

Rambus (RMBS) reported a wider first quarter loss for its first quarter, while revenues were flat with the year-ago period. Capital One Financial (COF) reported first quarter earnings and revenues that came in ahead of estimates. E*TRADE's (ETFC) first quarter earnings and revenues beat expectations despite declining from the year-ago period.

SanDisk (SNDK) reported a decline in its first quarter non-GAAP earnings of 63 cents per share from $1.03 per share in the year-ago period. Revenues fell 7 percent to $1.21 billion. The results were below expectations, while the company also cautioned that it expects a similar trend in the second quarter as well but expects sequential revenue growth in the third and fourth quarters.

Schlumberger's (SLB) first quarter adjusted earnings were a penny ahead of estimates and revenues also exceeded expectations.

AMD (AMD) reported first quarter non-GAAP earnings of 12 cents per share on revenues of $1.59 bullion, down 2 percent year-over-year. The results were ahead of estimates. For the second quarter, the company expects sequential revenue growth of 3 percent, plus or minus 3 percent.

Altera (ALTR) reported first quarter earnings and revenues that declined from the year-ago and also missed consensus estimates.

The major Asian markets closed on a mixed note, as sentiment took a hit by the negative performance of Wall Street overnight.

Japan's Nikkei 225 average languished in negative territory throughout the session before closing down 27.02 points or 0.28 percent at 9,561.

Australia's All Ordinaries showed some degree of volatility before closing up 3.10 points or 0.07 percent at 4,444. Energy stocks rallied strongly, lending support to the index. Meanwhile, Hong Kong's Hang Seng Index ended 15.63 points or 0.07 percent higher at 21,011.

After a volatile early trading, the major European averages are currently trading higher amid the release of a positive German business sentiment reading.

German business sentiment unexpectedly improved in April, according to the results of a survey by the Ifo Institute. The business sentiment index based on the survey edged up one-tenth of a percentage point to 109.9 in April compared to expectations for a reading of 109.5. Meanwhile, the U.K. Office for National Statistics reported that U.K.'s retail sales volume rose a bigger than expected 1.8 percent month-over-month. Economists expected a more modest improvement of 0.5 percent.

In corporate news, Swiss food company reported better than expected first quarter organic sales. French utility Suez Environment reported a 5.5 percent drop in first quarter core earnings.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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