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Dow Loses 300+ as Bernanke Testifies Before Congress… Russell 2000 Enters “Bear Market”… Ebay, BlackRock Higher… WaMu Announces First Losing Quarter Since 97… Schulumberg Profits Up… Apple, Boston Scientific Higher… Sprint Nextel to Cut 4,0000 Jobs… Urban Outfitters, IBM Higher… GE Earnings Up… AMD Posts Smaller Than Expected Loss… Asian stocks up… European stocks up… Dollar stronger against the yen, weaker against the Euro… And the futures are trending higher in the hour before the bell.

Yesterday during the testimony of Ben Bernanke, it seemed as if every sentence the Fed chairman uttered took another bite out of the market’s bullish spirits. After Thursday’s sharp 300+ point sell-off, the markets are looking for a bounce. And if the futures are any indication, then that bounce will come early, driven as much by short-covering as by options expiration and bargain hunting insofar as a number of quality stocks have been dragged down by pessimism over the economy. Leading economic indicators and consumer confidence are among the major economic announcements today, though the unwinding of huge option bets against the market today on options expiration should also have a significant influence on trading behavior today.

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TradingMarkets 5 Business Stories You Need to Know

Ameritrade’s Record Quarterly ProfitsNational Post

Increased trading activity and growing customer assets helped TD Ameritrade notch first quarter profit gains of 65%. The online discount brokerage also raised its guidance for 2008. Ameritrade, based on its PowerRating, is an average stock in an industry with a fairly high PowerRating of 9. Are there other stocks in that industry group that are as likely as Ameritrade–or more–to be higher one year from now? Visit PowerRatings.net to find out.

Growth in Services Trumps Growth in Hardware for IBMWall Street Journal

Strong earnings growth and continued sales overseas–especially in developing markets–led IBM to announce that it would be able to weather any slowdown in the U.S. or European economies. IBM’s CFO announced earnings gains of 15% for the year. IBM’s PowerRating marks it as a slightly above average opportunity for investors in an industry that looks to do very well over the coming year.

Stimulus Plans R UsBloomberg

Bernanke wins, nods at idea of $150 billion stimulus package in order to revive economic growth in the face of recession fears. The Fed chairman continues to be criticized for arriving with too little too late in terms of providing the markets with the consolation many investors need in order to feel confident about buying stocks.

GE Sees Profit GrowthBloomberg

Sales of turbines and engines to mostly overseas markets helps GE earn fourth quarter profit growth of 15%. GE CEO Jeffrey Immelt noted that sales in international markets accounted for more than 50% of IBM’s revenues this year. GE’s high PowerRating makes the stock one of the more attractive blue chip stocks for investors right now. The company is part of the Conglomerates industry, an industry with a high PowerRating as well and more than a few stocks that, like GE, are more likely than the average stock to be higher one year from now.

Merrill Writes Off $16 bnAssociated Press

Another financial sector earnings announcement, another multi-billion dollar write off … This time its Merrill Lynch blaming the collapse of the subprime lending market for its fourth quarter losses of $10 billion. The firm wrote off as much as $16 billion in mortgage-backed securities, which was largely responsible for the deficit. Like TD Ameritrade, Merrill Lynch’s PowerRating casts the stock as a slightly below average opportunity for investors in an industry that nonetheless looks to provide investors with positive returns going forward.

For more stories as they happen, go to our Breaking News section.

TradingMarkets 7 Stocks You Need to Know for Today

Here are 7 stocks for traders for today from TradingMarkets.com:

  • IBM
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    beat earnings on Thursday, reporting $2.80 EPS over an expected $2.68 EPS.

  • Seagate Tech
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    also beat earnings, reporting $0.76 EPS over an estimated $0.75 EPS.

  • General Electric
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    reported earnings today before the market opened that were in line with analyst estimates between 0.67 and 0.69 EPS.

  • Schlumberger
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    announced earnings today before the open that were about two cents below analyst estimates of $1.13 EPS.

  • Labranche
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    announces results tomorrow morning before the bell; look for -$0.02 EPS.

  • Johnson Controls
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    beat analyst estimates with a report of $0.39 EPS Friday morning before the market opened.

  • When Rambus
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    reports quarterly results on Friday after the market closes, analysts will be watching for -$0.06 EPS.

For a list of today s highest PowerRating stocks, click here.

TradingMarkets 5 Top PowerRatings Stocks for Today

Company
Symbol PowerRatings
Ctrip.com International CTRP 10
Evergreen Solar ESLR 9
Barrick Gold ABX 9
Baidu.com BISU 9
Wimm-Bill-Dann Foods WBD 8

View More Stocks

TradingMarkets Tracking the Wizards

BlackRock Profits Up 90%Bloomberg

Rising hedge fund fees helped boost earnings for the country’s biggest publicly traded asset manager in the fourth quarter. Fees increased by 400%, and acquisitions helped increase BlackRock’s assets to $1.4 trillion.

Number of NYSE Stocks Above 200-day Moving Average Nears 20%The Big Picture

Statistic noted bottoms in 1998 and 2002 as percentage of NYSE stocks below 200-day moving average slides ever closer to “buy signal” 20% mark.

Michael Lewis: On the Brilliance That is Goldman SachsBloomberg

Author of Liar’s Poker and Moneyball asks what it is that Goldman Sachs seems to know that the rest of the trading world doesn’t.

View Portfolios of Prominent Investors

TradingMarkets Playbook

There are ways to trade markets that are below their 200-day moving average. Those methods and strategies are the single topic of Larry Connors’ “5 Mistakes to Avoid in a Market Trading Below Its 200-day Moving Average”. Connor’s article is mandatory reading for traders buying and selling stocks in market conditions like these.

Yesterday’s close triggered a sell signal for many technical traders, which may have helped accelerate the day-long decline on Thursday.
With options expiration today–and rumors that many of the puts from January were not rolled over into February–the potential for the market to move higher over the next few days, and maybe sharply so, is greater than the current mood of pessimism might suggest.

That said, traders should be wary of buying strength in the event that the market shows signs of moving out of its correction phase. The markets are still in a very weakened condition, which means that the emphasis should be where it always should be: buying weakness and selling strength. Look for those quality stocks in good technical shape (i.e., above the 200-day moving average) that have shown temporary weakness–rather than beaten-up stocks below the 200-day moving average that are bouncing off of significant lows–when it comes to opportunities to the long side.

David Penn is Senior Editor at TradingMarkets.com.

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