Markets Rally on Draghi’s Vow: Thursday’s IP Market Recap

by Marc Bastow | July 26, 2012 5:23 pm

[1]European Central Bank President Mario Draghi announced the bank would do whatever it takes to save the euro, U.S. unemployment claims and mortgage rates fell, and durable goods orders increased. But nothing demands attention like Facebook (NASDAQ:FB[2]), so let’s get right to it:

After all the press and talk around its IPO, Facebook released its first earnings as a public company[3] after the bell on Thursday, and its quarterly earnings matched Wall Street’s expectations on revenue that slightly beat forecasts.

Shares that had already been beaten down over 8% during the day due to earnings released last night from Zynga (NASDAQ:ZNGA[4]) fell another 10% on the news, dropping the after-hours price to $24 per share, some 40% lower than the IPO price.

Zynga (NASDAQ:ZNGA[4]) continued Wednesday’s virtual free-fall[5], dropping another 37% on nearly 1 billion shares traded. In addition to the revenue and share price drops, Zynga is also being accused in a shareholder lawsuit of misrepresenting and/or failing to disclose materially adverse facts about its business and financial condition.

Amazon (NASDAQ:AMZN[6]) also released earnings after the bell[7] showing increased sales but a drop in profit. Amazon traded up just over 1% on the day, but gave those gains up in trading after the bell.

Back to the market, which rode the wave of good economic news both home and abroad and some strong earnings reports to a broad rally that saw all the indexes advance smartly. The Dow led the way with a 1.67% gain to 12,887, while the S&P came in very close with a 1.65% rise to 1,360, and the Nasdaq followed with a 1.37% increase to finish at 2,893 on the day.

Exxon Mobil (NYSE:XOM[8]) got the good news started as earnings moved up 49% from last year for a $15.6 billion profit on a 1.5% increase in revenue, the highest quarterly profit ever for any company. Exxon moved higher by 1.5%, and took the rest of the sector with it. Marathon Oil (NYSE:MRO[9]) gained just over 3%, while Chevron (NYSE:CVX[10]) and ConocoPhillips (NYSE:COP[11]) both traded up over 2% on the day.

Sprint (NYSE:S[12]) moved ahead by just over 20% on a strange combination of a bigger loss in the quarter but revenue growth[13] that topped analyst forecasts. Both AT&T (NYSE:T[14]) and Verizon (NUYSE:VZ[15]) reaped the benefits, with T up over 3% and VZ up just under 2%.

A raft of positive earnings news[16] among InvestorPlace Dependable Dividend Stocks[17] 3M (NYSE:MMM[18]), Colgate[19] (NYSE:CL[20]), McGraw-Hill (NYSE:MHP[21]) and Kimberly Clark (NYSE:KMB[22]) lifted their shares, with Colgate leading the way with a 4% gain, while the others managed increases just below 3% by the end of the day.

Whole Foods (NASDAQ:WFM[23]) rode the momentum of last night’s earnings release and after-hours trading pop to gain 11.5% on the day, and the news and momentum drove the entire industry higher, with SuperValu (NYSE:SVU[24]) soaring 11% and Fresh Market (NASDAQ:TFM[25]) up just under 7%.

Three Up

• Terex (NYSE:TEX[26]): Up 29.2% ($4.12) to $18.23
• Crocs (NASDAQ:CROX[27]): Up 17% ($2.36) to $6.61
• Seagate Technology (NASDAQ:STX[28]): Up 14.56% ($3.83) to $30.14

Three Down

• Groupon (NASDAQ:GRPN[29]): Down 8.7% (63 cents) to $6.61
• Barnes and Noble (NYSE:BKS[30]): Down 8.27% ($1.21) to $13.42
• Boston Scientific (NYSE:BSX[31]): Down 6.57% (35 cents) to $4.09

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he is long XOM and VZ.

Source URL: https://investorplace.com/2012/07/thursdays-ip-market-recap-fb-amzn-xom-mro-cop-cvx/

---