Earning reports pull US stocks higher

Intel and JP Morgan Chase give good lift to the Dow

Strong earning reports from a couple of key industry players and some strong economic data helped US stocks move up and end higher for the fifth straight session to a new 18-month high on Wednesday, 14 April, 2010. The earning reports mainly came from the technology and banking industry.

At the end of the day on Wednesday, the Dow Jones Industrial Average ended higher by 103.69 points at 11123.39. Nasdaq ended higher by 38.87 points at 2504.86. S&P 500 ended higher by 13.35 points at 1210.65.

Seven of ten economic sectors ended higher for the day led by technology, financial and consumer discretionary sectors. Healthcare and telecom sectors ended in the red. Intel and JP Morgan Chase were the main Dow winners.

Among the widely anticipated earning reports, Intel announced that it brought in $0.43 per share on $10.3 billion in revenue to exceed Wall Street's consensus estimate. Intel even issued a strong forecast for its second fiscal quarter. On the other hand, in the financial sector, shares of JPM Chase were propelled to their best single-session percentage gain in six months after the company beat the consensus forecast with first quarter earnings of $0.74 per share and revenue of $28.2 billion. Bank of America is next in line as the company will report its earning on Friday morning.

Among economic data for the day, the Commerce Department in US reported on Wednesday, 14 April 2010 that U.S. retail sales rose a better-than-expected 1.6% in March, spurred by fresh demand for autos, building materials and new spring clothes. Sales totaled $363.2 billion - the fifth gain in six months. Excluding autos and trucks, sales climbed 0.6% to $300.5 billion.

Also, the Labor Department in US reported on Wednesday, 14 April 2010 that U.S. consumer prices rose 0.1% on a seasonally adjusted basis due mainly to increased costs for fresh fruits and vegetables. The government's core consumer price index, measuring the rate of retail-level inflation after excluding food and energy, was unchanged in March. Separately, February business inventories increased a slightly stronger-than-expected 0.5%.

Crude oil prices ended its losing streak and ended higher on Wednesday, 14 April 2010. Prices went up as energy department reported unexpected drop in crude inventories for last week. Market had anticipated that the weekly inventory report would show substantial rise in crude inventories. The lower dollar also aided in rising crude price.

On Wednesday, crude-oil futures for light sweet crude for May delivery closed at $86.73/barrel (higher by $1.62 or 1.9%). Prices had dropped in last five sessions. Last week, crude ended higher by just 0.6%. For the month of March, crude rose 5.1%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 7.7%.

The EIA reported today an unexpected decrease in crude stockpiles for week ended 9 April. The EIA data showed supplies decreased by 2.2 million barrels in the week. The EIA's latest weekly data also showed total motor gasoline inventories decreased by 1.1 million barrels, while distillates, which include heating oil and diesel, increased by 1.1 million barrels.

Market was expecting weekly inventory report to show that crude stockpiles will increase by 1.6 million barrels, while gasoline stocks will be down by 1.26 million barrels for last week. Distillates stocks, which include heating oil and diesel, were expected to be up by 1 million barrels.

In the latest monthly report, the Organization of the Petroleum Exporting Countries on Wednesday left unchanged its forecast for global oil demand in 2010. Consumption is projected to increase by 900,000 barrels a day this year, the oil cartel said in its monthly report.

Fed Chairman Bernanke offered a testimony to the Joint Economic Committee today. Bernanke said he is particularly concerned about the fact that in March 44% of the unemployed had been without a job for six months or more, but offered no new position on Fed thinking.

For every stock declining, more than three posted gains on the New York Stock Exchange, where more than 1.1 billion shares changed hands. Composite volume topped 5.9 billion.

Barring Infosys, all Indian ADRs ended with strong gains on Wednesday. Tata Motors and Wipro Tech were the main winners soaring 2.6% each.

Tomorrow morning, three economic reports are scheduled to be released before the open. They are initial claims, continuing claims and empire manufacturing index. Other than that, earning reports will continue to dominate.