Earnings, Earnings, Earnings will be the focus for Wall St. by Ken Mahoney
It’s amazing what a long weekend can do for your attitude. Investors returned from the Independence Day holiday in the mood to set off more fireworks as the Dow gained 5.3%, the S&P rose 5.4%, and the Nasdaq jumped an even 5%. Traders eager to buy stocks beat-up by a three-month selloff contributed toward the best performing session since July 2009.
Other figures show that the world took notice. European markets also gained, with Britain's FTSE 100 rising 0.5%, Germany's DAX advancing 0.5%, and France's CAC 40 climbing 0.5%. Asian markets likewise rallied after South Korea raised its benchmark interest rate, viewed as a positive sign for the economy. Japan's Nikkei rose 0.5%, Hong Kong's Hang Seng gained 1.6%, and the Shanghai Composite rose 2.5%.
Powering the rebound was optimism about the second-quarter earnings season which is projected to beat expectations. Analysts currently anticipate year-over-year growth of 27%, according to the latest figures from Thomson Reuters. With a measure of confidence restored, investors will be watching closely as 21 of the S&P 500 companies report this week. If the earnings season meets expectations, it will likely be good for the psyche of individual investors as they shift their focus away from global concerns and onto U.S. corporate fundamentals.
To some degree, recent gains will be put to the test as investors digest a cornucopia of key economic data scheduled for release this week including retail sales, business inventories, consumer sentiment, CPI, and more. Upcoming earnings and data have the potential to either brighten or dim hopes of an ensuing recovery.
Key things to watch this week:
Tuesday – International Trade, Treasury Budget
Wednesday – Retail Sales, Business Inventories
Thursday – Producer Price Index, Jobless Claims, Industrial Production
Friday – Consumer Price Index, Consumer Sentiment
HEADLINES:
Spain defeated the Netherlands to win the World Cup soccer final played in South Africa on Sunday, July 11, 2010. Spain won 1-0. At least several hundred thousand fans were expected to line the streets of the capital to celebrate Spain's first ever World Cup title.
Oil spewed largely unchecked once again into the Gulf of Mexico on Sunday as BP crews worked to replace a leaky cap with a new containment system they hope will finally catch all the crude from the busted well. Robotic submarines removed the cap Saturday that had been placed on top of the leak in early June. On Sunday, officials said the work was going according to plan. BP hopes the capping operation will be done within three to six days.
The average price of regular gasoline at U.S. filling stations fell to $2.7259 a gallon as crude oil prices declined and supplies of the motor fuel increased. Gasoline dropped 3.88 cents in the two weeks ending July 9, according to a survey of 2,500 filling stations nationwide by Trilby Lundberg, an independent gasoline analyst in Camarillo, California. In the same two week period, crude oil fell 3.5% and gasoline fell 4.5%.
The average rate for a 30-year mortgage fell to 4.57% last week, the lowest since Freddie Mac, the government-owned mortgage finance company, began collecting data in 1971. Borrowing costs have shrunk in recent weeks as investors concerned about the global economy have piled into the relative safety of US Treasury bonds, pushing yields down.
President Barack Obama's party could lose its House majority in this Fall's elections, his spokesman said Sunday, perhaps trying to jolt Democratic voters with the specter of GOP lawmakers rolling back White House policies. "I think there's no doubt there are enough seats in play that could cause Republicans to gain control. There's no doubt about that," press secretary Robert Gibbs told NBC's "Meet the Press."
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Sources:
Marketwatch
The Wall Street Journal Online
Barrons
CNN Money
http://www.ajc.com/sports/fiesta-time-spain-celebrates-568560.html
http://www.google.com/hostednews/ap/article/ALeqM5i-yfHJzPLDeBIhG5JDEF6VbaPR8QD9GT10M81
http://www.businessweek.com/news/2010-07-11/u-s-gasoline-drops-to-2-7259-gallon-lundberg-says.html
http://www.ft.com/cms/s/0/ab32bc1e-8d0b-11df-bad7-00144feab49a.html
http://www.google.com/hostednews/ap/article/ALeqM5iGp8jzk4pJyawzEXFnuwO5C5vBMQD9GT1J580
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