Earnings Season Kicks Into High Gear — Tuesday’s IP Market Recap

by Alyssa Oursler | October 16, 2012 5:28 pm

[1]U.S. markets moved ahead with strength for the second straight day on Tuesday as earnings seasons kicked into high gear and good news came out of the eurozone.

The Nasdaq led the way with gains of 1.21%, closing at 3,101.17. The S&P 500 wasn’t far behind with its 1.03% climb to 1,454.92, and the Dow Jones gained 0.87%, sending it to 13,540.59.

Germany voiced that it might be open to a precautionary line of credit for Spain, sending the euro to a four-week high versus the yen and a one-week high against the U.S. dollar.

In the U.S., the Consumer Price Index rose 0.6% in September[2], fueled by a 7% hike in gasoline prices, while homebuilder confidence hit a six-year high.

On the earnings front, Johnson & Johnson (NYSE:JNJ[3]) and Goldman Sachs (NYSE:GS[4]) were among a host of companies topping estimates, though JNJ suffered a drop in profit[5]. GS improved from its loss a year earlier, however, and also managed to double its revenue[6].

Fossil (NASDAQ:FOSL[7]) and First Solar (NASDAQ:FSLR[8]) reported before the bell and saw 7% and 8% pops, respectively, while Mattel (NASDAQ:MAT[9]) gained around 4% on a solid report[10] as well. PNC Financial (NYSE:PNC[11]) lost around 4% despite beating Wall Street’s expectations, and UnitedHealth Group‘s (NYSE:UNH[12]) earnings sent it slightly in the red[13].

Intel (NASDAQ:INTC[14]) and IBM (NYSE:IBM[15]) were Tuesday’s big after-market earnings reports[16]. IBM posted third-quarter earnings slightly above expectations, but saw shares sink more than 3% in after-hours trading thanks to a decline in sales. Meanwhile, INTC posted earnings of 58 cents per share — 2 cents better than analysts were expecting — and beat expectations for revenue. However, the company’s outlook was bleak, as it expects revenue to fall short in the coming quarter on weaker demand, and INTC also was headed south by about 3%. Both companies are setting up a potential disappointing Wednesday for the Dow Jones.

The most-talked about news bit of the day wasn’t earnings-related, however. Citigroup (NYSE:C[17]) CEO Vikram Pandit suddenly resigned from his post[18] on the heels of the company’s solid earnings report, with some analysts suggesting that it resulted from a disagreement with the board over his salary[19].

Clearwire (NASDAQ:CLWR[20]) plummeted around 17% as investors realized Sprint Nextel (NYSE:S[21]) has no plans to acquire the smaller company in the near future. It had nearly doubled in value over the last three trading days in the wake of Softbank‘s (PINK:SFTBY[22]) 70% acquisition of Sprint Nextel and on speculation of such a takeover.

Shares of Bankrate (NYSE:RATE[23]) also tumbled on a lowered Q3 outlook, shaving around quarter of the company’s value and sending it to an all-time low.

Lastly, after years of losses, electric-car battery maker A123 (NASDAQ:AONE[24]) filed for bankruptcy[25].

Three Up

• OM Group (NYSE:OMG[26]): Up 12.8% ($2.26) to $19.97.
• Aegerion Pharmaceuticals (NASDAQ:AEGR[27]): Up 9.5% ($1.66) to $19.12.
• EnergySolutions (NYSE:ES[28]): Up 9.4% (26 cents) to $3.04.

Three Down

• Overseas Shipholding (NYSE:OSG[29]): Down 27.3% ($1.41) to $3.76.
• Isis Pharmaceuticals (NASDAQ:ISIS[30]): Down 21.9% ($2.88) to $10.27.
• James River Coal (NASDAQ:JRCC[31]): Down 11.1% (53 cents) to $4.25.

Alyssa Oursler is an Editorial Assistant at InvestorPlace.com. As of this writing, she did not hold a position in any of the aforementioned securities.

Source URL: https://investorplace.com/2012/10/earnings-season-kicks-into-high-gear-tuesdays-ip-market-recap/

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