Stocks May See Further Upside On Influx Of Positive Earnings

By IBTimes Staff Reporter | July 21 2009 8:50 AM

RTTNews - After staging a strong rally to kick off the week, stocks are likely to see some further upside on Tuesday, as traders digest a slew of largely positive earnings. The major index futures are currently all in positive territory, with the Dow futures up by 54 points.

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Five Dow components are among the companies that have reported their quarterly results, with Caterpillar (CAT) reporting a second-quarter profit of $0.60 per share, down from $1.74 per share in the year-ago quarter. Wall Street analysts expected the company to earn $0.22 per share.

Coca-Cola (KO) revealed adjusted second-quarter net income of $0.92 per share, down from $1.01 per share in the same quarter last year. Nonetheless, the firm beat analyst forecasts of $0.89 per share.

Chemical giant DuPont (DD) reported adjusted second-quarter net income of $0.61 per share, surpassing expectations of $0.53 per share for the quarter. Meanwhile, net sales for the quarter declined compared to the same period last year and fell short of estimates.

Merck (MRK) posted adjusted second quarter net income of $0.83 per share, compared to $0.86 per share in the previous year quarter. The results exceeded analysts' consensus estimate of $0.77 per share.

Additionally, United Technologies (UTX) disclosed second quarter net income of $1.05 per share, compared to $1.32 per share in the year ago quarter. Results for the recent quarter include $0.22 per share in restructuring costs and $0.06 per share from a one-time gain. The earnings inched past analyst forecasts of $1.04 per share.

While Schering-Plough (SGP) and Lockheed Martin (LMT) also reported results that beat estimates, State Street (STT) disappointed. After the closing bell today, traders will be presented with quarterly results from Apple (AAPL), Yahoo! (YHOO) and Advanced Micro Devices (AMD).

Aside from earnings, traders will pay close attention to testimony from Federal Reserve Chairman Ben Bernanke, who will be speaking before the House Financial Services Committee beginning at approximately 10:00 a.m. ET.

Stocks posted strong gains on Monday, boosted by promising earnings results and reassuring news from commercial lending giant CIT Group (CIT). The Dow advanced by 104.21 points to 8,848, the Nasdaq climbed by 23 points to 1,909 and the S&P 500 rose by 11 points to 951.13.

Crude oil futures are rising in early commodities trading, climbing by $0.56 to $65.85 a barrel after advancing by $0.71 to $65.29 per barrel in the previous session. The price of gold is also on the rise, advancing by $0.90 to $949.70 an ounce.

On the currency front, the U.S. dollar is mixed against the major European currencies, slipping to $1.4240 against the euro while rising to $1.6458 versus the pound. Against the yen, the buck is moving higher and is now valued at 94.29 yen.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. While Japan's benchmark Nikkei 225 Index posted a 2.7 percent gain, China's Shanghai Composite Index fell 1.6 percent.

Meanwhile, the major European markets are all moving higher, with the German DAX Index and the French CAC 40 Index advancing by 1.3 percent and 1.5 percent, respectively, while the U.K.'s FTSE 100 Index is posting a 1 percent gain.

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