Casino stock Melco Crown Entertainment (NASDAQ:MPEL) cashed in today with a new 52 week high, and strong earnings reports and economic news helped ensure other stocks followed suit.
The major market indexes are flying north in midday trading on upbeat earnings news from industry leaders, including tech goliath IBM (NYSE:IBM) and soda stalwart Coca-Cola (NYSE:KO). Big Blue beat analysts’ projections, reporting a second-quarter profit of $3.03 per share. Coke bubbled up with earnings of $1.17, slightly above analysts’ expectations.
Wells Fargo (NYSE: WFC), Johnson & Johnson (NYSE: JNJ) and Yahoo (NASDAQ:YHOO) all also reported second-quarter profits. At the market’s close, Apple (NASDAQ:AAPL) is slated to release second-quarter results. Analysts expect the colossal computer company to post earnings of $5.85 per share, up 67% from the year-ago quarter. Further helping push the markets up are better-than-expected housing numbers. In June, housing starts bounced to a six-month high and construction permits rose unexpectedly. On this positive news, a wide variety of consumer entertainment stocks are hitting fresh 52-week highs, including casino stock Melco Crown Entertainment (NASDAQ: MPEL) and restaurant outlet Kona Grill (NASDAQ:KONA).
However, many financial stocks, including Bank of America (NYSE: BAC) and Goldman Sachs (NYSE: GS) are falling to 52-week lows, after reporting weak second-quarter results. In line with analysts’ expectations, banking heavy weight, Bank of America, reported a loss of -$0.90 share. Investor firm, Goldman Sachs’ second-quarter profit rose to $1.85, but this number was well below analysts’ projections of $2.27 per share.
A detailed report follows below.
Stocks hitting 52-week highs
Melco Crown Entertainment (NASDAQ:MPEL): The Chinese casino and gaming stock has racked up about a 4% win this morning after research firm Sterne, Agee & Leach stated they expect gambling revenue on the Asian island of Macau to increase 40% in July, with sales hitting $2.9 billion. Melco Crown, which already has a gaming resort on the island, recently announced it plans to build a second gaming facility in Macau, with a projected completion date of 2015. MPEL stock has rallied strongly.
Kona Grill (NASDAQ:KONA):The upscale, but casual dining chain is looking about 3.3% more appealing this morning. Investors seem to be front running the stock in anticipation of upbeat second-quarter results, to be reported at the market’s close on Tuesday, July 26. Shareholders appear optimistic because in early June, renowned restaurateur, Michael Nahkunst – who helped guide restaurant chains The Cheesecake Factory (NASDAQ:CAKE) and BJ’s Restaurant (NASDAQ:BJRI) to profit – became CEO of KONA.
Western Refining (NYSE: WNR): The independent crude oil marketer and refiner has lifted about 4% in morning trading. The refiner appears to be benefiting from record high “crack spreads” which is the price differential between the amount it costs to purchase and refine oil. When crack spreads are high, refiners profit.
Stocks hitting 52-week lows:
Goldman Sachs (NYSE: GS): The investment firm is down about -1% so far in morning trading after reporting lower-than-expected second-quarter earnings. Although revenue surged to $1.1 billion, from $453 million in the year-ago quarter, earnings came in at $1.85 per share, well below analysts’ expectations of $2.35. Weakness in the bond trading and currency trading markets contributed to the drop.
Bank of America (NYSE: BAC): The largest bank in the U.S. is off about -2% this morning after releasing poor second-quarter results. Revenue sank 54% to $13.2 billion, from $29.1 billion in the year-ago quarter. Roughly in line with analysts’ projections, earnings fell to -$0.90 from a profit of +$0.27 in the comparable year-ago period. The drop was partially attributed to an $8.5 mortgage bond settlement reached this June.
Colony Bankcorp (Nasdaq: CBAN): The Georgian-based commercial, consumer and mortgage bank has lost more than -10% this morning. The stock is down for no obvious reason; however, general weakness in the banking sector may be contributing to the stock’s extreme volatility. Trading has been very sporadic since mid-June.
As of this writing, Deborah O’Malley did not own a position in any of the stocks named here.
