Get RSS Feed
9:00am (EST)
The bears continued their assault on the bulls Thursday following a pattern of late-day sell-offs that has carried the market generally lower all week.
Yesterday’s weakness came after the Labor Department reported initial jobless claims declined 19,000 week-over-week to 457,000 which was roughly in-line with the 460,000 that had been expected.
The market also got a worse-than-expected durable goods number, and the ongoing debate over the pending financial reform bill had an impact on the Financial stocks. More on this in a minute…
As a result, the Dow dropped 146 points, or 1.4%, and closed at 10,152. The index finished right near its low and took out the 20-day moving average (MA) in the process. If we get a repeat today and slip below 10,000 then next week could be a doozy.
The S&P 500 fell 18 points, or 1.7%, to settle at 1,073. The level Wall Street will be watching today is the 1,040 mark and if that is taken out then we could see a triple-digit index real soon.
The Nasdaq gave back 36 points, or 1.6%, to finish at 2,217. More importantly, the index failed support at 2,240 and looks like it could be headed to 2K.
Research In Motion (RIMM, $58.58, down $1.06) is down $3 in pre-market trading after reporting earnings after the close on Thursday.
The company posted a profit of $769 million, or $1.38 a share, versus $643 million, or $1.12, in the year earlier period. Revenue rose 24% to $4.2 billion. Wall Street was looking for $1.34 a share, on revenues of $4.4 billion.
RIMM said it shipped 11 million units and added 4.5 million new subscribers. These figures were at the at the low end of the company’s forecast range, but fell short of the 11.5 million and the 5 million new subscribers that analysts had penciled in.
Overall, this was a solid report from RIMM, but we showed you the writing on the wall yesterday. The company plans to unveil a new line of handsets, perhaps by the end of the summer, but RIMM is playing catch-up to other rivals now. It used to be the other way around.
The “other” big news this morning is the financial regulation reform bill appears closer to being signed as Congress pulled an all-nighter to get the final details hammered out. The bill is expected to be signed next week by the president and brings sweeping changes to Wall Street and some of their business practices.
Futures are pointing towards a slightly lower open this morning as the bears try to close the week with a sweep. They have been making noise all week and have shaved about 4% off the major indexes since Monday.
As we head to press, Dow futures are down 14 points to 10,085 while the S&P 500 futures are off by 2 points to 1,068. The Nasdaq 100 futures are lower by 3 points to 1,846.
Apple (AAPL) Moving In On RIMM’s Turf
Tuesday, July 27th, 2010
12:50pm (EST)
The market is mixed after getting off to a good start but less than stellar economic news has cooled the enthusiasm. Earnings continue to dominate the headlines but the bulls are having trouble breaking through the upper resistance levels we outlined in the morning update.
The consumer confidence report came in at 50.4 for July which was only slightly below expectations of 51 but down from last month’s reading of 54.3. However, to put things in perspective, the decline follows last month’s nearly 10-point drop, from 62.7 in May. This report takes a pulse of the American consumer on how they feel about the economy, jobs and their outlook and it clearly shows they are still holding back on spending.
Elsewhere, the Standard & Poor’s/Case-Shiller 20-city home price index posted a 1.3% increase in May from April as 19 of 20 cities showed price gains month over month. Of course, this was helped by the federal tax incentives which attracted some buyers into the market but we expect prices to remain flat or down for housing over the next six months.
Turning to earnings, Dupont (DD, $40.52, up $1.53) is up 4% after reporting better-than-expected results. The company said profits came in at $1.2 billion, or $1.26 a share, versus $417 million, or $0.41 a share, in the year-ago period.
Revenue jumped 25% to $8.6 billion while analysts were expecting $8.3 billion/ $0.94 a share. DuPont also raised its 2010 earnings forecast to $2.90-$3.05 a share, up from $2.50-$2.70 and above Wall Street’s expectations of $2.64 a share.
U.S. Steel (X, $45.93, down $2.96) is getting pounded and is down 6% today after reporting a negative numbers for its most recent quarter. Before the open, the company reported a loss of $25 million, or $0.17 a share, versus a loss of $392 million, or $2.92 a share, in the year-ago period. Revenue rose to $4.7 billion from $2.1 billion. Excluding items, U.S. Steel would have earned $0.45 a share but blamed the weakening of the euro against the dollar during the quarter for the miss.
And this just in, Apple (AAPL, $262.69, up $3.41) plans to sell an unlocked iPhone 4 in Canada starting on Friday. The company is moving in Research In Motion’s (RIMM, $53.82, down $1.71) own backyard and plans to allow customers to shop around for a service plan.
As we head to press, the Dow is currently holding a slight gain of 27 points and is at 10,552 while the S&P 500 is up a point to 1,116. The Nasdaq is lower by 4 points and is at 2,292. Upside targets are Dow 10,600; S&P 1,125; and Nasdaq 2,300. To the downside look for Dow 10,400, S&P 1,100; and Nasdaq 2,250.
We will be back in the morning with another full update at 9am. We have updated our current trades as we have one company reporting earnings before the bell on Wednesday. Subscribers, check the Members Area for our latest comments.
Tags: AAPL, Apple, call options, Canada iPhone, DD, Dupont, how to trade options, iPhone 4, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, Research in Motion, RIMM, stock options trading, U.S. Steel, volatile options, x
Posted in Apple, Company Commentary, Earnings | Comments Off