GDP Could Throw A Wrench Into Earnings
Stocks showed some resiliency late last week as they tested their closing lows reached on October 10 and successfully bounced back. Earnings remain on the back burner as investors trade on emotion instead of fundamentals. Some investors are starting to enter the markets as prices get to multi-year lows.
Aside from earnings in the coming week, investors will also be focused on the advanced Gross Domestic Product report for the third-quarter which is expected on Thursday. The economy probably contracted in the third quarter, shrinking at an annual rate of 0.5 percent, according to a Bloomberg survey of 20 analysts. The previous quarter showed the economy growing at an annual rate of 2.8 percent.
This coming week brings another slew of earnings reports from a wide variety of companies from Buffalo Wild Wings
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PowerRating) to United States Steel Corp.
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PowerRating). A number of technology companies are also set to report including JDS Uniphase Corp.
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PowerRating) and Sun Microsystems Inc.
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PowerRating).
On Wednesday, Corning Inc.
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PowerRating) will release its third-quarter results before the market opens. Analysts polled by Reuters expect the company to post a profit of $0.44 per share, up from $0.38 per share a year ago, on revenue of $1.59 billion. The stock favors a widening pattern between the sessions following earnings events, adding to its extended-hours performance in three of the past four quarters. Longs may want to hold onto their positions into the regular session if shares rise. On July 30, Corning reported second-quarter results that beat on profit but missed on sales. Shares fell 1.9% in the pre-market and extended their losses during the regular session, ending down 4.0%.
On Thursday, Motorola Inc.
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PowerRating) will release its third-quarter results before the market opens. Analysts polled by Reuters expect the mobile-phone maker to post earnings of $0.02 per share, down from $0.06 per share a year ago, on revenue of $7.83 billion. This stock also has a tendency to widen between session, doing so three out of the past four quarters after earnings releases. On July 31, Motorola reported second-quarter results that beat the Street, sending the stock higher by 9.8% in the pre-market. Shares extended their rally in the regular session, rising 12.5%.
Cassie Slane is a Senior Editor at www.MidnightTrader.com.
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