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Big Macs and Turbines Fuel a Rally — Friday’s IP Market Recap

Positive earnings reports held sway after Thursday's drop


InvestorPlace Market RecapThe Dow Jones Industrials and S&P 500 rebounded from Thursday’s losses to send investors into the weekend in an upbeat mood. A trickle of good news in revenue and earnings growth that started with Microsoft’s (NASDAQ:MSFT) announcement after the bell on Thursday turned into a river, as GE (NYSE:GE) and McDonald’s (NYSE:MCD) picked up the momentum with positive reports released this morning.

Additional encouraging news for the market came in prior to the opening bell from Europe, where Germany reported that a measure of business confidence had increased for the sixth straight month, rallying European markets and the euro.

For the day, the Dow ended up 0.50% at 13,029.19, while the S&P notched a narrower gain of 0.12% to end at 1,378.51. The Nasdaq slipped, losing 0.24% to 3,000.45 as Apple (NASDAQ:AAPL) continued a three-day slide, sinking another 2.5% to close at 573.95.

Microsoft shares surged 4.5%, closing at $32.43, as profit in fiscal third-quarter topped forecasts on better-than-anticipated sales of software for businesses.

GE shares closed up nearly 1.15% at $19.35 as the company reported net income of $3.03 billion, or 29 cents a share, down 12% year-over-year. On an adjusted basis, the company earned 34 cents a share, topping analysts’ estimates by a penny. GE cited its strong performance from the industrial business as the prime revenue and earnings mover.

Fast-food king McDonald’s posted first-quarter earnings of $1.23 per share, in line with the Zacks consensus estimate. Reported earnings were 7% higher than the year-ago level of $1.15 per share, thanks to higher comparable-store sales in all regions. McDonald’s shares closed up 0.69% to $96.25, after surging nearly 2% in early trading.

Quarterly earnings continue to be a positive surprise to investors and analysts, as more than 80% of the 121 S&P companies that have already reported earnings have beaten analysts’ estimates according to Thompson Reuters. Typically, in any quarter no more than 60% accomplish the feat.

Among the companies releasing earnings on Monday are ConocoPhillips (NYSE:COP), Xerox (NYSE:XRX) and Netflix (NASDAQ:NFLX). Tuesday brings a slew of reports, including 3M (NYSE:MMM), Norfolk-Southern (NYSE:NSC), Hershey (NYSE:HSY) and, perhaps the most anticipated release of the season: Apple (NASDAQ:AAPL).

 Three Up

  • E*Trade (NASDAQ:ETFC): Up 5.97% (59 cents) to $10.47
  • D.R. Horton (NYSE:DHI): Up 5.27% (77 cents) to $15.39
  • Lennar (NYSE:LEN): Up 3.66% (91 cents) to $25.77

Three Down

  • SanDisk (NASDAQ:SNDK): Down 11.47% ($4.64) to $35.83
  • Altera (NASDAQ:ALTR): Down 8.44% ($3.25) to $35.25
  • Intuit (NASDAQ:INTU): Down 5.96% ($3.63) to $57.27

As of this writing, Marc Bastow is long AAPL, MSFT and GE.

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