Wall Street continues to see notable strength during early afternoon trading on Friday as investors react positively to some promising corporate earnings news and government reports on new home sales and durable goods orders.
On the corporate front, Ford's (F) first-quarter results came in better than analysts had anticipated, with the auto giant reported a narrower than expected loss.
The company reported an after-tax net loss of $0.75 per share, compared to a profit of $0.20 per share, a year ago, but analysts expected a loss per share of $1.23. While the loss continues to indicate weakness in the auto sector, the better-than-expected result shows that improvements are being made at Ford.
Meanwhile, Microsoft (MSFT) posted third quarter earnings that came in line with expectations after excluding special charges. The software giant reported third quarter earnings of $0.33 per share, including two charges that reduced earnings by $0.06 per share. Analysts had expected Microsoft to earn $0.39 per share.
In economic news, while a report released by the Commerce Department showed a modest decrease in new home sales in the month of March, the annual rate of new home sales came in well above economist estimates due to an upward revision to February sales.
The report showed that new home sales fell 0.6 percent to an annual rate of 356,000 in March from a revised February rate of 358,000. Economists had expected new home sales to remain unchanged compared to the 337,000 originally reported for the previous month.
Earlier, a separate report from the Commerce Department showed that durable goods orders fell 0.8 percent in March following a downwardly revised 2.1 percent increase in February. Economists had expected orders to fall 1.5 percent compared to the 3.5 percent increase that had been reported for the previous month.
In other news, banks will be notified privately today regarding their performance in the stress tests conducted by federal regulators, although the results will not be made public until May 4th. However, the methodology used by regulators will be revealed today.
The nation's 19 largest banks underwent stress tests to assess their soundness in the midst of the greatest financial crisis since the Great Depression. The tests began in late February as a way to determine whether or not banks had sufficient capital to navigate the difficult financial environment.
While the major averages have moved off their best levels of the day in recent trading, they currently remain firmly in positive territory. The Dow is currently up 125.44 at 8,082.50, the Nasdaq is up 35.87 at 1,688.08 and the S&P 500 is up 13.65 at 865.57.
Most of the major sectors have shown strong upward move over the course of the trading day, with the broad based strength helping to push the major averages firmly into positive territory.
Gold stocks are turning in some of the best performances amid a continued increase by the price of the precious metal. With gold for June delivery rising $4.70 at $911.30 an ounce, the Amex Gold Bugs Index is up 5.9 percent, moving further off the one-month closing low set last Friday.
Significant strength is also visible in the housing sector, as reflected by the 5.7 percent gain currently being shown by the Philadelphia Housing Index. The index has risen to a six-month intraday high as traders react positively to the new home sales data.
Networking stocks are also seeing considerable strength, driving the Amex Networking Index up 5.1 percent. Juniper Networks (JNPR) is helping to lead the sector higher, rising 14 percent after reporting adjusted first quarter earnings in line with analyst estimates.
A variety of other sectors have also shown significant moves to the upside, with oil service, steel, and software stocks currently posting notable gains.
Meanwhile, brokerage stocks continue to buck the downtrend, dragging the Amex Securities Broker/Dealer Index down 2.5 percent after it ended the previous session at a more than five-month closing high.
Stocks In The News
Among individual stocks, Mohawk Industries, Inc. (MHK) is posting a 25.6 percent gain after the company provided strong guidance for the second quarter. At their high for the session, shares of Mohawk were at their best intraday level in six months.
Looking to the second quarter, the company expects earnings per share to be in the range of a loss of $0.43 to $0.52 per share, while analysts expected earnings of $0.27 per share
Additionally, Eastman Chemical Co. (EMN) is up 21.3 percent after reporting first quarter earnings from continuing operations, excluding items, that declined to $0.25 per share from $1.48 per share in year-ago quarter but came in above analyst estimates of $0.14 per share.
Meanwhile, Honeywell (HON) is down 4.3 percent after cutting its full-year outlook. The company currently expects fiscal 2009 earnings to range between $2.85 and $3.20 per share, with sales in the range of $32.3 to $33.2 billion. Previously, the company projected 2009 earnings between $3.20 and $3.55 per share and sales in the range of $33.6 to $35.3 billion.
In overseas trading, stock markets across the Asia-Pacific regions closed mostly lower on Friday, with Japan's benchmark Nikkei 225 Index closing down 1.6. Hong Kong's Hang Seng Index bucked the downtrend, however, edging up 0.3 percent.
Meanwhile, the major European markets are holding near their highs of the day in late trading, with the U.K.'s FTSE 100 Index up 3.4 percent, while the French CAC 40 Index and the German DAX Index are posting gains of 3.1 percent and 3.0 percent, respectively.
In the bond market, treasuries have come off their lows of the day but remain below the unchanged line. Subsequently, the yield on the benchmark 10-year note is up 3.7 basis points at 2.964 percent.
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