U.S. stocks extended the latest winning streak to three days and the Dow, after facing afternoon rejection during a number of sessions over the past 10 trading days, finally closed above the 11000 mark for the first time in 18 months. This is now the third, I’m going to say secular, run through 11K after initially breaking through in May 1999.
A plan, this time with specifics (although it would take unanimous consent to implement), to bail out Greece from its debt financing problems helped stocks in pre-market trading. The hope that the first-quarter earnings season would post good results helped momentum just enough to hold onto half of the early-session gains – and the current earnings season will be a good one, it’s a couple of quarters out when things may get sketchy, as we’ll get to below.
First-quarter earnings season kicked off last night after the closing bell, but won’t begin in earnest for another week. Within three weeks time we’ll have about 30% of S&P 500 members in and a pretty good idea of how the season will turn out.
The fourth quarter of 2009 ended a nine-quarter string of declining earnings as ex-financial S&P 500 earnings per share rose 13.8%. This quarter the market expects 25%, and we should get that as industrials will finally begin to help out and consumer discretionary will have the easiest comparisons (remember what was occurring a year ago) in a very long time, if not ever. (Earnings results are matched against the year-ago period.)
Six of the major 10 industry groups led the broad market higher. Financials performed the best, with utility and technology shares not far behind. Basic material and health-care led the losers for the third-straight session. Telecom and consumer discretionary shares rounded out the sectors that ended in the red.
Click here to read the full Daily Insight
Brent Vondera, Senior Analyst
www.acrinv.com
Tuesday, April 13, 2010
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