These Earnings Will Impact Wednesday’s Trading

Stocks were higher, with the Dow snapping a 4-day
losing streak. A host of good earnings reports and benign
producer price data helped the bulls. It was a more convincing rally
today than yesterday with better market internals.  Energy, materials and
technology rallied.

The market moved up even though oil was $2 higher, underscoring the fact that
traders believe interest rates and the economy are more important than oil.
Traders appear to want confirmation that inflation is under control; today’s
modest PPI was just the ticket. If tomorrow’s CPI confirms a modest increase,
that would be good news for the bulls. Look for 0.5%.

Sovereign Bank
(
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Coca-Cola
(
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items–and announced a $2 billion buyback. Quarterly net income fell 11%;
revenue rose 4%. The stock is trading up pre-open.

Johnson & Johnson
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Merrill Lynch
(
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the company announced a $4 billion stock buyback and increased the dividend 25%.

Texas Instruments
(
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profits rose 12%.

General Motors
(
GM |
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company offered no guidance. GM bonds are trading 800 basis points over
treasuries. The junk bond market has slowed down considerably since GM bonds
were downgraded. The yield on GM common stock is 7.6% but there is talk that
dividend may be cut. Revenue per vehicle dropped by almost $700.

Pfizer
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PPI for March was 0.7%, in-line; ex food and energy, +0.1, slightly lower.
Housing starts fell 17.6% in March. Building permits fell 4%.

Earnings this week (estimates in parentheses):

Wednesday

EBAY (0.18),  CAT (1.34),  Ford (0.39),  MOT 
(0.19),  JPM (0.69),  QCOM (0.27),  SBC  (0.33),  YUM
(0.52) 

Thursday

GOOG (0.92), T (0.59)  MCD (0.43)

Friday

EK (0.33), HAL (0.44), IP (0.33), MYG (0.20)

Two-thirds of firms that have provided Q2 guidance have guided lower.
Thompson Financial says that Q1 earnings growth could be 11-12%.

Strong sectors were:  Gold
(
$XAU.X |
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 Healthcare Providers
(
$HMO.X |
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+2.19%

Weak sectors were:  Airlines
(
$XAL.X |
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Retail
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$RLX.X$ |
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-0.27%  Banks
(
$BIX.X |
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Stocks in the News

Novellus
(
NVLS |
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revenues but margins were lower than expected.

EMC Corp.
(
EMC |
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Radio Shack
(
RSH |
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American Standard
(
ASD |
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Viacom
(
VIA |
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expected.

Sonus Networks
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SONS |
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traded lower after the close.

Lucent
(
LU |
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The company has $4.1 billion in cash and cash equivalents on the balance sheet.

Target
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2-4% range.

Taser
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PowerRating) missed by 0.02 and did not provide any guidance.