Schaeffer's Today's Market Features: Microsoft, Pulte Homes, Red Hat, Wendy's International, and Meritage Homes.
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4:25 PM Microsoft Posts First-Quarter Earnings
A string of positive earnings announcements and benign economic reports allowed the major market averages to stretch to new heights once again on Thursday, following some early-session malaise. By the time the closing bell sounded, the big-three indices were perched near their intraday heights.
The Dow Jones Industrial Average (DJIA - 12,163.7) hit a new all-time high of 12,167 today and closed 28 points higher. Action was fairly mixed across the blue-chip index, with 13 of the 30 Dow components closing lower on the day. The S&P 500 Index (SPX - 1,389.08) expanded to its highest reading since November 2000 and settled the session up seven points. The tech-rich Nasdaq Composite (COMP - 2,379.1) shuffled up 22.5 points and also put in a new annual high, its first since mid-April. The advance/decline ratio on the New York Stock Exchange hit 2.21 and reached 2.10 at the Nasdaq.
In a widely anticipated earnings report, Microsoft (NASDAQ:MSFT) said its quarterly income and revenue both rose 11 percent. Profit climbed to $3.48 billion, or 35 cents per share, from year-ago earnings of $3.14 billion, or 29 cents per share. Revenue rose to $10.81 billion during the period. Analysts were expecting per-share results of 31 cents on $10.75 billion in sales. Furthermore, the Whisper Number totaled 31 cents per share as well. Looking forward, MSFT said its yearly earnings-per-share outlook was roughly in line with analysts' expectations.
3:13 PM Wendy's Misses Expectations
As the final hour of trading dwindles away, the major market indices are solidly in the black this afternoon. The Dow Jones Industrial Average (DJIA -12,154) has added 19 points and the S&P 500 Index (SPX - 1,388.33) is up six points. The Nasdaq Composite (COMP - 2,376.4) has increased 20 points. Meanwhile, the December gold futures contract finished the day with a gain of $9 to close at $599.80 an ounce. The contract tagged an intraday high of $601.50. December silver added 2.9 percent to finish at $12.24 an ounce, while December copper was the lone loser among the major metals, closing down 0.45 cent at $3.40 a pound.
Elsewhere, Wendy's International (NYSE:WEN) announced third-quarter earnings of $72 million, or 61 cents per share, as sales inched 2.5 percent higher to $623 million. The Street had forecast earnings of 64 cents. The company said its results were impacted by a lower number of restaurants operating in the quarter compared with last year. Same-store sales increased 4.1 percent at Wendy's U.S. company-operated restaurants and 3.9 percent at its U.S. franchised restaurants.
1:46 PM New Highs Dwarf New Lows
The mood on Wall Street is one of resilience yet again, as early-morning losses have reversed into modest midday gains. Checking in on the always-intriguing crude pits, December futures have reversed slightly after powering forward in Wednesday's session. A barrel of oil will now run you about $61.18, down 22 cents from yesterday's settlement price.
As has been the trend for several weeks, new highs are pummeling new lows on both major stock exchanges. At the New York Stock Exchange, 348 equities have already hit new peaks today, with eight plunging to new depths. Over at the Nasdaq, there are 138 equities in new-high territory compared with 28 at new lows. Among those pegging new highs are Time Warner, Clear Channel Communications, Verizon Communications, and Google. Triad Hospitals is on today's new-low list, as is Red Hat.
12:11 PM Homebuilder Earnings
It's high noon on Wall Street, and U.S. market averages are mixed. The Dow Jones Industrial Average (DJIA - 12,121.6) managed to tag yet another new all-time high this morning (at 12,165.3) but is now down about 12 points. The S&P 500 Index (SPX - 13,82.53) posted another new five-year high but is up a modest fraction in midday action. Meanwhile, the Nasdaq Composite (COMP - 2,357.4) is virtually unchanged as well, as is the Russell 2000 Index (RUT - 767.12).
Checking out some equities, Pulte Homes (NYSE:PHM) said last night that its third-quarter income plunged 52 percent to $190.2 million, or 74 cents per share, down from $1.50 per share, or $395.4 million, in the year-ago period. Revenue edged six percent lower to $3.56 billion. Analysts were projecting per-share earnings of 76 cents on $3.35 billion in revenue.
Meritage Homes (NYSE:MTH) reported third-quarter earnings per share of $2.25 from $2.40 last year. Wall Street's consensus view came in at $2.202. Quarterly revenue rose to $878.2 million from $755.5 million last year, outpacing the Street's outlook of $835 million. PHM is trading slightly lower today, while MTH shares have gained 1.2 percent.
11:03 AM Natural-Gas Prices Rise, New-Home Prices Plunge
The major market indices are mired in the red today, as a deluge of economic data is taking the wind out of trading sails. First and foremost, natural-gas prices have rebounded from early losses, as the Energy Department said that inventories rose by a lower-than-expected 19 billion cubic feet for the week ended October 20. November natural gas rose 12.7 cents to a seven-week high of $7.82 per million British Thermal Units, on the news.
Elsewhere, prices of new homes in the U.S. dropped at their fasted pace in 36 years during September, equating to a rise in sales to the highest level in three months. The government reported that sales of new homes unexpectedly rose 5.3 percent in September to a seasonally adjusted annual rate of 1.075 million, the most in three months and well above the 1.05 million expected by economists. However, sales in June, July, and August were revised down by total of 67,000 annualized, continuing a pattern of downward revisions to the originally reported data.
In equity news, Red Hat (NASDAQ:RHAT) is on the ropes this morning, as Oracle (ORCL) announced that it will offer full technological support for RHAT's Linux operating system at a much lower price than RHAT currently charges for its support services. At last check, ORCL shares were flat lining, while RHAT plunged more than 26 percent on the news.
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Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method.
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|Date:||Oct 26, 2006|
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