Big Blue Earnings Preview


Stocks are lower on continued fears over interest rates and unemployment.

Initial claims rose by a surprising 30,000 last week, the biggest jump in a
year.

Citigroup
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reported earnings that rose
by 29% to 5.27 billion with revenue up 16% to 21.49 billion. The bank saw
strength in its fixed-income trading business and double-digit growth in all of
its overseas markets.

Apple Computer
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reported earnings that rose more than 200% to $46 million on strong sales of its
iPod music player, with revenue rising to $1.48 billion. Apple expects to earn
12 cents in the third quarter on revenue of $1.925 billion.

Reliance Steel & Aluminum

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said continued
demand is allowing the company to pass along higher prices to its customers due
to rising metal prices. RS posted earnings that quintupled to $29.8 million with
revenue soaring 46% to $655.8 million.

After the bell, IBM
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is expected to report $0.93 a share with sales at $21.9 billion.

Dow
-10.58

10368.72
S&P 500
-2.92
1125.25
Nasdaq
-22.42

2002.43

The day’s leading sectors are
Pharmaceuticals

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+2.85%, Oil Services
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+1.97%, Natural Gas
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+1.71%, and REITs
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+ 1.30%.

Weak today are Healthcare
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 -3.90%, and Semis
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-2.82%.

Economic news releases today
higher initial claims at 360,000 and NY Empire State Index that rose to 36.05.

10-year Notes are 140 at
111 040

The dollar
is +0.45 at 90.63

Gold is -5.10 at 402.60

Crude Oil is -0.58 at
36.10

Volume is 688,000,000 on
the NYSE, and 915,000,000 on the Nasdaq.

Market breadth is negative.

NYSE Issues
Advancing
1502 Up Vol 304
Declining 1643 Down Vol 361
Ratio 1.07 1.19
Nasdaq
Advancing
1071 Up Vol 239
Declining
1959 Down Vol 659
Ratio 1.89 2.75

Top Dow stocks are:

Merck
(
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+3.01%
at 46.82, Johnson & Johnson
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, +2.75% at 54.06, SBC
Communications

(
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+1.36% at 24.45, Coca Cola
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, +0.62%
at 51.50, and Wal-Mart
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+0.55% at 57.76.

Stocks in the news:

Tradestration
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reported earnings that beat estimates by a penny at 8 cents per share or $3.5
million, on revenue that rose 31% to 17.5 million. It reported a 32% increase in
new accounts with daily average revenue trades that doubled year over year.

PepsiCo
(
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posted earnings of
$804 million with revenue of $6.13 billion. It increased its soft drink market
share by 0.4%. The company is seeking $2.29 a share for the full year with cash
from operating activities at $4.9 billion.

Continental Airlines
(
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halved
its quarterly loss to $124 million despite rising fuel costs. The company
reported a $1.6 billion balance of cash and short-term investments at the close
of the quarter.

Advanced Micro Devices
(
AMD |
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reported earnings of $45.1 million on revenue of $1.24 billion with strong
demand for its flash memory chips.

Brice Wightman

bricew@tradingmarkets.com