Stocks Edge Higher on Earnings News
Stocks closed slightly higher Friday after seesawing earlier, allowing the market to score a sixth straight week of gains. General Electric (GE) and Citigroup (C) earnings were better than expected as the market closed out a somewhat trendless week looking for clues about the state of global economies, says S&P MarketScope.
There was muted reaction to news that the Michigan Consumer Sentiment Index rose to 61.9 in April from March's 57.3 reading.
On Friday, the 30-stock Dow Jones industrial average edged up 5.90 points, or 0.07%, to 8,131.33. The broad S&P 500 index rose 4.30 points, or 0.50%, to 869.60. The tech-heavy Nasdaq composite index added 2.63 points, or 0.16%, to 1,673.07 -- following Thursday's 2.7% gain.
Treasuries were lower, sending the yield on the 10-year note up to 2.93%. The dollar index rose. Gold futures fell to $868, while and crude oil rose to $50.66.
Among companies in the news, Citigroup (C) posted $0.18 first quarter loss, vs. $1.03 loss a year ago, on 99% revenue rise. Wall Street was looking for a loss of $0.34. Citi says the $0.18 loss reflected the reset in January 2009 of conversion price of the $12.5 billion convertible preferred stock issued in a private offering in January 2008. It Says this did not have an impact on net income but resulted in a reduction to income available to common shareholders of $1.3 billion or $0.24 per share; without this reduction, EPS were positive. S&P believes trading results at current levels are unsustainable, and it maintained a hold opinion. The shares fell 0.36 to 3.65.
General Electric (GE) reported $0.26, vs. $0.43, first quarter EPS from continuing operations on a 9% revenue drop. It says first quarter results consistent with its GE Capital investor meeting on March 19 and the framework provided last December, which included a smaller but still-profitable GE Capital and 0%-5% earnings growth in its Industrial segments.
Google (GOOG) reported $4.49, vs. $4.12, first quarter EPS on 6.2% revenue rise. S&P says revenue was below expectations, reiterates strong buy.
Biogen Idec (BIIB) posted $1.05, vs. $0.83, first quarter non-GAAP EPS on 10% revenue rise. Revenue was seen as below expectations. It confirms 2009 forecast for revenue growth in the high single digits, non-GAAP EPS above $4.00.
Fed Chairman Ben Bernanke, in a speech at the Kansas City Federal Reserve Bank's conference, said innovation in credit markets must not be stifled, but complexity designed to confuse customers and drive up lending fees would not be tolerated. Bernanke also said that the pain from the most severe recession in a generation would linger for a while.