Stocks likely to take lead from Intel's positive earnings and outlook; investors await CPI, IBM.
Intel's better-than-expected second-quarter profit and positive forecast were likely to propel stocks higher Wednesday, as investors awaited more earnings news as well as readings on inflation and manufacturing before the opening bell.
Reports from J.P. Morgan Chase and Ford Motor will be among the other earnings in focus Wednesday.
Just after 8:30 a.m. ET, tech-heavy Nasdaq futures pointed to a strong open. S&P futures were also higher, but more modestly.
"Traders are focusing on the good news and Intel is the big one today, pushing the Nasdaq futures up almost 0.8 percent," Jim Morrison, a senior trader at Financial Spreads, told Reuters. "The market is shrugging off any news that is slightly disappointing and the attention will remain on earnings today. As long as there are no major negative surprises, equities will continue to rally," he said.
Intel doubled its second-quarter profit, surpassing the estimates of analysts. The No. 1 chipmaker also reported better-than-expected sales for the past quarter and forecast better-than-expected profit margins for the third quarter and the rest of the year on higher sales and lower production costs. But, the company said it was still too early to call a recovery in the PC market.
Intel (INTC: Research, Estimates) shares rose 6 percent among U.S. stocks trading in Europe Wednesday.
Ford Motor (F: Research, Estimates) posted earnings of 22 cents a share, excluding special items, down from 31 cents a share in the same quarter last year, but beating analysts' estimates by 3 cents a shares, according to earnings tracker First Call.
Dow component J.P. Morgan Chase (JPM: Research, Estimates) reported a profit of 89 cents a share, up from 50 cents last year and soaring past Wall Street's average forecast, based on a survey by First Call.
But Motorola (MOT: Research, Estimates) edged lower in Europe after the wireless technology developer posted better-than-expected earnings late Tuesday but lowered sales forecasts because of the SARS breakout in Asia. Lucent Technology (LU: Research, Estimates) shares slid 7 percent after the telecom equipment maker warned that second-quarter results would be weaker than expected.
Aerospace manufacturer General Dynamics (GD: Research, Estimates) said its earnings fell to $1.22 per share from $1.29 per share from the same quarter last year but beat Wall Street's average forecast by 5 cents a share, according to Reuters Research. The company said its sales rose 12 percent.
Among others reporting before the open, publisher Knight-Ridder (KRI: Research, Estimates) posted earnings of 13 cents a share on a pro-forma basis, coming in-line with analysts' average estimate. Software maker Network Associates (NET: Research, Estimates) also posted in-line profits, earning 11 cents a share for the quarter.
After the closing bell, IBM (IBM: Research, Estimates) leads the list of companies scheduled to issue second-quarter results. The computer products maker is expected to report earnings of 98 cents a share, up from 89 cents a year earlier. But some analysts are concerned that the improvement will merely reflect currency gains and acquisitions, and not real strength in Big Blue's core businesses.
Apple Computers (AAPL: Research, Estimates) and Advanced Micro Devices (AMD: Research, Estimates) also report quarterly results after the closing bell.
In other corporate news, Citigroup (C: Research, Estimates) said it would buy Sears, Roebuck's (S: Research, Estimates) credit card business for $6 billion in cash.
The government said the consumer price index rose 0.2 percent in June, matching economists' expectations.
Also due before the open is the industrial production report for June, which is forecast to have risen 0.1 percent, with capacity utilization holding at 74.3 percent. And business inventories for May are projected to have been unchanged, compared with a 0.1 percent rise in April.
The Dow Jones industrial average took a 0.5 percent hit from Fed chairman Alan Greenspan's mixed testimony about the economy before a House panel Tuesday; Greenspan is slated to appear before a Senate panel Wednesday with the same message. The Nasdaq composite index was less affected, down 0.1 percent. (see chart for details)
Asian-Pacific stocks ended mostly higher Wednesday, although Tokyo's Nikkei index lost 0.2 percent. European markets were mostly higher in midday trading. (Check the latest on world markets)
Treasury prices fell in early trading, adding to the losses posted Tuesday. The 10-year note yield rose to 3.96 percent from 3.94 percent late Tuesday and 3.71 percent Monday. The dollar advanced against the yen and euro.
Brent oil futures pulled back 11 cents to $28.87 a barrel in London, where gold was lower in early trading.
Intel's better-than-expected second-quarter profit and positive forecast were likely to propel stocks higher Wednesday, as investors awaited more earnings news as well as readings on inflation and manufacturing before the opening bell.
Reports from J.P. Morgan Chase and Ford Motor will be among the other earnings in focus Wednesday.
Just after 8:30 a.m. ET, tech-heavy Nasdaq futures pointed to a strong open. S&P futures were also higher, but more modestly.
"Traders are focusing on the good news and Intel is the big one today, pushing the Nasdaq futures up almost 0.8 percent," Jim Morrison, a senior trader at Financial Spreads, told Reuters. "The market is shrugging off any news that is slightly disappointing and the attention will remain on earnings today. As long as there are no major negative surprises, equities will continue to rally," he said.
Intel doubled its second-quarter profit, surpassing the estimates of analysts. The No. 1 chipmaker also reported better-than-expected sales for the past quarter and forecast better-than-expected profit margins for the third quarter and the rest of the year on higher sales and lower production costs. But, the company said it was still too early to call a recovery in the PC market.
Intel (INTC: Research, Estimates) shares rose 6 percent among U.S. stocks trading in Europe Wednesday.
Ford Motor (F: Research, Estimates) posted earnings of 22 cents a share, excluding special items, down from 31 cents a share in the same quarter last year, but beating analysts' estimates by 3 cents a shares, according to earnings tracker First Call.
Dow component J.P. Morgan Chase (JPM: Research, Estimates) reported a profit of 89 cents a share, up from 50 cents last year and soaring past Wall Street's average forecast, based on a survey by First Call.
But Motorola (MOT: Research, Estimates) edged lower in Europe after the wireless technology developer posted better-than-expected earnings late Tuesday but lowered sales forecasts because of the SARS breakout in Asia. Lucent Technology (LU: Research, Estimates) shares slid 7 percent after the telecom equipment maker warned that second-quarter results would be weaker than expected.
Aerospace manufacturer General Dynamics (GD: Research, Estimates) said its earnings fell to $1.22 per share from $1.29 per share from the same quarter last year but beat Wall Street's average forecast by 5 cents a share, according to Reuters Research. The company said its sales rose 12 percent.
Among others reporting before the open, publisher Knight-Ridder (KRI: Research, Estimates) posted earnings of 13 cents a share on a pro-forma basis, coming in-line with analysts' average estimate. Software maker Network Associates (NET: Research, Estimates) also posted in-line profits, earning 11 cents a share for the quarter.
After the closing bell, IBM (IBM: Research, Estimates) leads the list of companies scheduled to issue second-quarter results. The computer products maker is expected to report earnings of 98 cents a share, up from 89 cents a year earlier. But some analysts are concerned that the improvement will merely reflect currency gains and acquisitions, and not real strength in Big Blue's core businesses.
Apple Computers (AAPL: Research, Estimates) and Advanced Micro Devices (AMD: Research, Estimates) also report quarterly results after the closing bell.
In other corporate news, Citigroup (C: Research, Estimates) said it would buy Sears, Roebuck's (S: Research, Estimates) credit card business for $6 billion in cash.
The government said the consumer price index rose 0.2 percent in June, matching economists' expectations.
Also due before the open is the industrial production report for June, which is forecast to have risen 0.1 percent, with capacity utilization holding at 74.3 percent. And business inventories for May are projected to have been unchanged, compared with a 0.1 percent rise in April.
The Dow Jones industrial average took a 0.5 percent hit from Fed chairman Alan Greenspan's mixed testimony about the economy before a House panel Tuesday; Greenspan is slated to appear before a Senate panel Wednesday with the same message. The Nasdaq composite index was less affected, down 0.1 percent. (see chart for details)
Asian-Pacific stocks ended mostly higher Wednesday, although Tokyo's Nikkei index lost 0.2 percent. European markets were mostly higher in midday trading. (Check the latest on world markets)
Treasury prices fell in early trading, adding to the losses posted Tuesday. The 10-year note yield rose to 3.96 percent from 3.94 percent late Tuesday and 3.71 percent Monday. The dollar advanced against the yen and euro.
Brent oil futures pulled back 11 cents to $28.87 a barrel in London, where gold was lower in early trading.
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