July 16, 2009 -- 16:20 ET Dow +95.61 at 8711.82, Nasdaq +22.13 at 1885.03, S&P +8.06 at 940.74:
Moving the Market:
JPMorgan Chase tops earnings estimates with ease, but the report isn't enough to convince buyers to extend their efforts. Weekly jobless claims and continuing claims make surprising decline.
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07/16/09 16:20 ET Dow +95.61 at 8711.82, Nasdaq +22.13 at 1885.03, S&P +8.06 at 940.74:
[BRIEFING.COM] Stocks spent most of the session moving sideways in choppy fashion as participants allowed the heady gains from earlier this week to consolidate. However, follow-through buying in tech helped offset weakness among financials and helped hand stocks another positive finish.
Financial stocks failed to provide leadership as participants took a breather after watching the sector climb more than 10% during the three previous sessions. That run left the sector looking ripe for some profit taking since it seemed that good news was largely priced into the sector. In turn, JPMorgan Chase (JPM 36.13, -0.13) grappled with selling pressure for virtually the entire session, even though it posted this morning better-than-expected second quarter earnings. Still, the sector was able to recover from a near 2% loss to finish with a modest 0.2% loss.
Other earnings announcements this morning were mixed. Global handset maker Nokia (NOK 13.46, -2.22) posted in-line earnings, but expects 2009 industry volumes to decline approximately 10% from 2008 levels. Baxter International (BAX 54.74, +1.65) topped earnings estimates. Marriott (MAR 20.44, -1.36) did, too, but it issued downside guidance.
Tech gets credit for providing a boon to the broader market. While the major indices were stuck in sideways movement, tech saw some follow-through from the previous session's advance and logged a 1.7% gain. What's more, many tech issues that typically lag were able garner continued support, which supports the notion that the market's overall bias has improved.
Typical tech leaders IBM (IBM 110.64, +3.42) and Google (GOOG 442.60, +4.43) were able to garner support of their own. Both companies reported their latest quarterly results after the closing bell (Note: Both firms announced earnings that topped expectations within minutes of the close). Bank of America (BAC 13.17, -0.25), Citigroup (C 3.03, -0.14), and General Electric (GE 12.40, +0.16) all report Friday morning.
With tech looking strong and buyers willing to step in, the Nasdaq registered its seventh straight gain. Such a feat hasn't been made in more than one year. Meanwhile, the S&P 500 and the Dow were able to log their fourth straight gain, which hasn't been done in more than one month.
Though tech showed leadership in the latest advance, the upward move was generally broad-based as advancing issues outnumbered decliners by nearly 4-to-1 in the S&P 500.
Some of the most encouraging jobless claims data in months was met with a muted response this morning and failed to induce more than a modest, temporary uptick in stock futures ahead of the opening bell. Initial claims for the week ending January 11 came in at 522,000, which is the lowest since January. Continuing claims pulled back sharply from record highs of 6.9 million to less than 6.3 million, which is the lowest tally since April.
Nasdaq +22.13 at 1885.03... S&P Midcap 400 +1.4... NYSE Adv/Dec 2113/881... Nasdaq Adv/Dec 1660/961.
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Is it 2003 all over again? Don't look now, but the tech-heavy Nasdaq 100 index is up 25.53% year to date. And both Google (GOOG) and IBM reported stronger than expected earnings after the close tonight, although GOOG is currently trading down while IBM is up. As shown in the chart below, the index just took out its early June highs today after trading up sharply all week long.
Looking at individual stocks in the index, Seagate Technology (STX) is up the most in 2009 with a gain of 147.18%, and it's followed closely by Baidu (BIDU) at 146.96%. Sun Micro (JAVA) is up 140%, followed by EXPE (102.91%), MRVL (96.85%), and LINTA (88.46%). The blue-chip tech names have seen huge gains this year as well. Research in Motion (RIMM) is up 78%, Apple (AAPL) is up 73%, Amazon.com (AMZN) is up 67%, and Google is up 43.7%.
While tech got killed along with the overall market in 2008, its gains so far in 2009 have been extraordinary. Optimism on the sector seems to be getting overly bullish as well, however, so buyers should be careful and not get too overconfident.