U.S. stocks gapped higher at the open and the Dow Jones Industrial Average and traded as high as 12,496.83 going into the last half hour of trading with the NASDAQ as high as 2820.77 still below its February 18th high at 2840.51. Initial Jobless Claims came in above 400,000 for the second week in a row at 403,000. Keep in mind that 350,000 is the Recessionary Threshold.
Gold traded to another new all time high on Thursday at $1509.6 the Troy ounce. Crude oil continued the rebound from Monday’s low of $105.50 per barrel testing $112.48 on Thursday. The euro versus the dollar traded from just below 1.42 on Monday to above 1.46 with a new year to date high of 1.4647 on Thursday.
Leading Indicators rose by 0.4% in March. The Philly Fed Manufacturing Index fell to 18.5 in April, well below expectations. Next week’s key economic data include; New Home Sales on Monday, Consumer Confidence on Tuesday, the FOMC Statement following the April 27 FOMC meeting with the first Press Conference by Fed Chief Bernanke, Advanced GDP for Q1 on Thursday, and Personal Income and Spending on Friday.
Stocks were strong again around the globe on Thursday on better than expected earnings from the likes of Apple after the close on Wednesday. The Nikkei 225 gained 0.8% to 9686. The Dow Industrial Average ended Wednesday up 187 points to 12,454 with the NASDAQ up 58 points to 2803, which was the first close above 2800 since February 18th. The US Treasury 10-Year yield traded down from 3.42 to 3.37 on Thursday, staying below the 50-day simple moving average at 3.456. Treasuries still have a minor flight to quality bid with auctions of 2-Year, 5-Year and 7-Year notes next week.
Energy
One year after the Deepwater Horizon disaster, BP (BP) has filed suit against Transocean (RIG), seeking at least $40B in damages from the rig owner for negligence in causing the drilling rig to be ‘unseaworthy.’ BP is also suing Cameron (CAM) for negligence, claiming a blowout preventer made by the firm failed to stave off the disaster, which ultimately released more than 200M gallons of oil into the Gulf of Mexico. Newmont Mining (NEM) beat estimates by 5 cents and revenue by $20M. Schlumberger (SLB) missed estimates by 5 cents and revenue by $110M. Weatherford International (WFT) missed estimates by 8 cents, but beat revenue by $30M. Newfield Exploration (NFX) beat estimates by 4 cents and revenue by $49M. Noble Corp. (NE) missed estimates by 2 cents, but beat revenue by $21M. In afternoon trading: Shares of Patriot Coal (PCX) are up about 6.2% despite missing estimates by 4 cents.
The Energy Select Sector SPDR (XLE) was trading at $78.98 at 4:00 PM on Thursday, up 0.46% on the day – up 15.72% year-to-date.
Materials
Air Products and Chemicals (APD) beat estimates by 3 cents and revenue by $70M. DuPont (DD) beat estimates by 16 cents and revenue by $840M. Calgon Carbon (CCC) is upgraded to Buy from Neutral at Janney Capital. Aluminium Corp China (ACH) is now Neutral from Sell at Goldman. In afternoon trading: Shares of China Shen Zhou Mining (SHZ) are down about 6.1%. Shares of Molycorp (MCP) are down about 4.1%. Shares of Avalon Rare Metals (AVL) are up about 4.7%. Shares of Golden Star Resources (GSS) are up about 4%.
The Materials Select Sector SPDR (XLB) traded at $40.02 at 4:00 PM on Thursday, up 1.07% on the day – up 5.31% year-to-date.
Industrials
Air Lease (AL) wants to buy rival ILFC from AIG (AIG). Air Lease CEO Steven Udvar-Hazy founded ILFC before selling it to AIG and then leaving the unit in early 2010. Danaher (DHR) beat estimates by 8 cents and revenue by $20M. GE (GE) beat estimates by 3 cents and revenue by $3.8B. Covanta Holding (CVA) missed estimates by 2 cents, but beat revenue by $1M. RSC Holdings (RRR) reported Q1 EPS of -$0.49 (consensus – -$0.22), while beating revenue by $13M. CSX Corp (CSX) is boosted to Buy from Hold at Stifel Nicolaus. In afternoon trading: Shares of Broadwind Energy (BWEN) are up about 10.7%. Shares of Manitowoc (MTW) are up about 7.7%. Shares of WABCO (WBC) are up about 7.1%. Shares of Terex (TEX) are up about 6.7%.
The Industrial Select Sector SPDR (XLI) traded at $37.63 at 4:00 PM on Thursday, up 0.29% on the day – up 7.92% year-to-date.
Consumer Discretionary
Chipotle Mexican Grill (CMG) narrowly beat estimates by 2 cents and revenue by $14M. However, there is news that U.S. authorities are widening their investigation of Chipotle for hiring illegal immigrants. Chipotle Mexican Grill (CMG) will replace Novell (NOVL) in the S&P 500 index. A federal jury will share its verdict today on the closely-watched copyright infringement and trade secrets case between Mattel (MAT) and MGA Entertainment over the popular billion-dollar Bratz doll line. Cheesecake Factory (CAKE) beat estimates by a penny with revenue in-line with estimates. Marriott International (MAR) missed estimates by a penny and revenue by $1B. Yum! Brands (YUM) missed estimates by a penny, but beat revenue by $20M. PetSmart (PETM) gets a Buy-from-Neutral boost at Goldman Sachs. Best Buy (BBY) is raised to Buy from Hold at Societe Generale. Boyd Gaming (BYD) gets moved to Market Perform from Underperform by BMO Capital. Polaris Industries (PII) is now Neutral from Outperform at brokerage Robert Baird. Gildan Activewear (GIL) is downgraded to Buy from Action List Buy at TD Newcrest. Genuine Parts (GPC) is now Sell from Neutral at Goldman. In afternoon trading: Shares of Select Comfort (SCSS) are up nearly 30% after its quarterly results and full-year forecast easily topped Wall Street expectations.
The Consumer Discretionary Select Sector SPDR (XLY) traded at $39.91 at 4:00 PM on Thursday, up 0.55% on the day – up 6.68% year-to-date.
Consumer Staples
TreeHouse Foods (THS) and Dean Foods (DF) are both begun with Outperforms at BMO Capital. Ralcorp Holdings (RAH) is a new Outperform at BMO Capital. Hain Celestial (HAIN) is a new Market Perform at BMO Capital. In afternoon trading: Shares of Star Scientific (CIGX) are up about 6%. Actives: Shares of Altria Group (MO) are down about a quarter of a percent. Shares of Procter & Gamble (PG) are down about 1%.
The Consumer Staples Select Sector SPDR (XLP) traded at $30.90 at 4:00 PM on Thursday, up slightly on the day – up 5.42% year-to-date.
Healthcare
Covidien (COV) beat estimates by 4 cents and revenue by $60B. UnitedHealth (UNH) beat estimates by 33 cents and revenue by $480M. Amgen (AMGN) beat estimates by 5 cents with revenue in-line with estimates. Boston Scientific (BSX) reported Q1 EPS of $0.01 (consensus – $0.04) with revenue in-line with estimates. Gilead Sciences (GILD) missed estimates by 10 cents and revenue by $110M. Sunrise Senior Living (SRZ) is lifted to Buy from Hold with a $12 target price at Stifel Nicolaus. In afternoon trading: Shares of Biogen Idec (BIIB) are up about 16% after beating estimates by 2 cents and revenue by $20M. Shares of Orexigen (OREX) are up about 10.7%.
The Health Care Select Sector SPDR (XLV) traded at $34.25 at 4:00 PM on Thursday, up 0.29% on the day – up 8.73% year-to-date.
Financials
HSBC (HBC) CEO Stuart Gulliver is reportedly planning a massive shake-up to boost the bank’s profitability and revitalize its U.S. operation. The U.K.’s Financial Services Authority is reportedly investigating insurer Prudential (PUK) and its failed $35B bid for AIA, AIG’s (AIG) Asian life insurance unit. Air Lease (AL) wants to buy rival ILFC from AIG (AIG). Air Lease CEO Steven Udvar-Hazy founded ILFC before selling it to AIG and then leaving the unit in early 2010. BB&T (BBT) beat estimates by a penny, but missed revenue by $150M. Fifth Third Bancorp (FITB) beat estimates by a penny. PNC Financial Services (PNC) beat estimates by 20 cents and revenue by $10M. Travellers (TRV) beat estimates by 38 cents and revenue by $120M. American Express (AXP) beat estimates by 4 cents and revenue by $50M. E*TRADE (ETFC) beat estimates by 4 cents and revenue by $31M. People’s Bank (PBCT) reported Q1 EPS of $0.15 (consensus – $0.12). Charles Schwab (SCHW) is taken to Buy from Neutral at Ticonderoga with a $22 target. In afternoon trading: Shares of SLM (SLM) are up about 13% after beating estimates by 8 cents.
The Financial Select Sector SPDR (XLF) traded at $16.10 at 4:00 PM on Thursday, up 0.56% on the day – up 0.94% year-to-date.
Information Technology
Apple (AAPL) once again impressed investors, reporting a 95% jump in quarterly profit as sustained consumer demand drove FQ2 EPS to $6.40 vs. consensus of $5.36. Revenue rose 83% to $24.7B while gross margins rose to 41.4% from 38.5%. F5 Networks (FFIV) beat estimates by 3 cents and reported a better-than-expected outlook. Chipotle Mexican Grill (CMG) will replace Novell (NOVL) in the S&P 500 index. Chinese regulators approved Nokia Siemens Networks’ (NOK, SI) planned acquisition of Motorola Solutions’ (MSI) telecom network gear business for $975M. Tyco Electronics (TEL) missed estimates by a penny and revenue by $520M. Lam Research (LRCX) beat estimates by 9 cents and revenue by $5M. Qualcomm (QCOM) beat estimates by 6 cents and revenue by $250M. Western Digital (WDC) reported FQ3 EPS of $0.66 (in-line) and revenue of $2.25B (in-line). In afternoon trading: Shares of Travelzoo (TZOO) are up about 28% after beating estimates by 9 cents and reporting that quarterly revenue was up 30% from last year; beating estimates by $4M.
The Technology Select Sector SPDR (XLK) traded at $26.35 at 4:00 PM on Thursday, up 0.88% on the day – up 4.61% year-to-date.
Telecommunications Services
In afternoon trading: Shares of VocalTec Communications (CALL) are up about 8%. Shares of Premiere Global Services (PGI) are up about 5.25%. Actives: Shares of Level 3 Communications (LVLT) are up about 1.6%. Shares of Verizon (VZ) are down about 3.1%. Shares of Sprint Nextel (S) are down about a quarter of a percent. Shares of AT&T (T) are up about 1.9%.
The NASDAQ Telecommunications Index (IXTC) traded at $225.88 at 4:00 PM on Thursday, up 1.21% on the day – up 0.23% year-to-date.
Utilities
NV Energy (NVE) is initiated with a Market Perform at Wells Fargo. NuStar Energy (NU) is now Hold from Buy at Citigroup, which cuts its price objective to $72 from $75. In afternoon trading: Actives: Shares of AES (AES) are up about 1.4%. Shares of PPL (PPL) are down about 0.8%. Shares of DPL (DPL) are up about 0.4%. Shares of Duke Energy (DUK) are down slightly.
The Utilities Select Sector SPDR (XLU) traded at $32.24 at 4:00 PM on Thursday, unchanged on the day – up 2.87% year-to-date.
STOCKS: BP, RIG, CAM, NEM, SLB, WFT, NFX, NE, PCX, APD, DD, CCC, ACH, SHZ, MCP, AVL, GSS, AL, AIG, DHR, GE, CVA, RRR, CSX, BWEN, MTW, WBC, TEX, CMG, NOVL, MAT, CAKE, MAR, YUM, PETM, BBY, BYD, PII, GIL, GPC, SCSS, THS, DF, RAH, HAIN, CIGX, MO, PG, COV, UNH, AMGN, BSX, GILD, SRZ, BIIB, OREX, HBC, PUK, BBT, FITB, PNC, TRV, AXP, ETFC, PBCT, SCHW, SLM, AAPL, FFIV, NOK, SI, MSI, TEL, LRCX, QCOM, WDC, TZOO, CALL, PGI, LVLT, VZ, S, T, NVE, NU, AES, PPL, DPL, DUK
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