12:55pm (EST)
The bulls are having trouble extending Monday’s gains as most of the news today has been disappointing and not up to expectations. Futures were pointing towards a lower open after Procter & Gamble (PG, $59.62, down $2.44) and Dow Chemical (DOW, $25.75, down $2.58) both missed Wall Street’s expectations and the market extended it losses after lousy economic reports on consumer spending and factory orders. However, the market has come off its lows and is trying to get back to even as we head into the second half of trading.
The boring stuff first…
The Commerce Department said June personal income was flat, as expected, while consumer spending was flat, as well. A slight increase to 0.1% has been expected.
Factory orders for June fell 1.2% which was worse-than-expected 0.5% decline that had been forecast. Pending home sales slipped 2.6% month-over-month which was better than the 5% drop that was predicted.
Turning to earnings, the exciting news…
Procter & Gamble reported a profit of $2.2 billion, or $0.71 a share, versus $2.5 billion, or $0.80 a share, in the year ago period. Revenue came in at $18.9 billion. Both numbers were below Wall Street’s estimates as analysts were expecting $0.73 a share on $19.1 billion in sales. Shares are down 4% which is a big move for this slow moving stock.
Dow Chemical reported earnings of $566 million, or $0.50 a share, compared to a loss of $486 million, or $0.47 a share, a year earlier. Revenue jumped 20% to $13.6 billion but analysts were expecting $0.56 a share on sales of $13.7 billion. Shares are down 9% on double the average daily trading volume.
Despite the negative headlines, the bulls are battling back as we head to press.
The Dow is lower by 30 points to 10,644 and bounced right off the 10,600 level as it tries to make it into positive territory. The S&P 500 is down by 5 points to 1,121 after touching a low of 1,116 while the Nasdaq is off by 9 points to 2,286.
It wouldn’t be surprising to see the bulls battle back as it appears the market could be setting up to follow last week’s pattern. We expected a pullback at these levels and Friday actually could end up being a flat day when the unemployment numbers are released. We don’t expect the 9.5% rate to change, and how the market behaves after hearing the news will depend on what the private sector says or how many jobs it added.
Our favorite beer company will announce earnings after the close. Boston Beer (SAM, $66.40, down $1.20) recently set a 52-week high of $74.52 back in June and we have mentioned it quite a few times in our Members Area. It isn’t the best stock to play options on because of the liquidity and low open interest. However, it would have been a sweet LEAP option trade as we have been covering this one in the $40’s since February.
We will be on the sidelines when Boston Beer reports but we might pop one open if they beat expectations.
Tags: Boston Beer, call options, dndn, Dow, how to trade options, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, PG, put options, SAM, stock options trading, volatile options
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Headline News Favoring Bears
12:55pm (EST)
The bulls are having trouble extending Monday’s gains as most of the news today has been disappointing and not up to expectations. Futures were pointing towards a lower open after Procter & Gamble (PG, $59.62, down $2.44) and Dow Chemical (DOW, $25.75, down $2.58) both missed Wall Street’s expectations and the market extended it losses after lousy economic reports on consumer spending and factory orders. However, the market has come off its lows and is trying to get back to even as we head into the second half of trading.
The boring stuff first…
The Commerce Department said June personal income was flat, as expected, while consumer spending was flat, as well. A slight increase to 0.1% has been expected.
Factory orders for June fell 1.2% which was worse-than-expected 0.5% decline that had been forecast. Pending home sales slipped 2.6% month-over-month which was better than the 5% drop that was predicted.
Turning to earnings, the exciting news…
Procter & Gamble reported a profit of $2.2 billion, or $0.71 a share, versus $2.5 billion, or $0.80 a share, in the year ago period. Revenue came in at $18.9 billion. Both numbers were below Wall Street’s estimates as analysts were expecting $0.73 a share on $19.1 billion in sales. Shares are down 4% which is a big move for this slow moving stock.
Dow Chemical reported earnings of $566 million, or $0.50 a share, compared to a loss of $486 million, or $0.47 a share, a year earlier. Revenue jumped 20% to $13.6 billion but analysts were expecting $0.56 a share on sales of $13.7 billion. Shares are down 9% on double the average daily trading volume.
Despite the negative headlines, the bulls are battling back as we head to press.
The Dow is lower by 30 points to 10,644 and bounced right off the 10,600 level as it tries to make it into positive territory. The S&P 500 is down by 5 points to 1,121 after touching a low of 1,116 while the Nasdaq is off by 9 points to 2,286.
It wouldn’t be surprising to see the bulls battle back as it appears the market could be setting up to follow last week’s pattern. We expected a pullback at these levels and Friday actually could end up being a flat day when the unemployment numbers are released. We don’t expect the 9.5% rate to change, and how the market behaves after hearing the news will depend on what the private sector says or how many jobs it added.
Our favorite beer company will announce earnings after the close. Boston Beer (SAM, $66.40, down $1.20) recently set a 52-week high of $74.52 back in June and we have mentioned it quite a few times in our Members Area. It isn’t the best stock to play options on because of the liquidity and low open interest. However, it would have been a sweet LEAP option trade as we have been covering this one in the $40’s since February.
We will be on the sidelines when Boston Beer reports but we might pop one open if they beat expectations.
Tags: Boston Beer, call options, dndn, Dow, how to trade options, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, PG, put options, SAM, stock options trading, volatile options
This entry was posted on Tuesday, August 3rd, 2010 at 12:57 PM and is filed under Earnings, Economic News, Market Analysis, Market Commentary. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.