Stock Market News for July 20, 2010 - Market News

Some optimism returned to the Street on Monday after Friday’s hammering, helping stocks post modest gains even as investors confronted some conflicting signals about the economic recovery and mixed earnings reports. However, even as demand for riskier assets rose, investors proceeded with caution amid lingering doubts about the economic revival.  

The Dow industrials made good more than half of their last week’s losses, rising 0.6% to 10,154.43.  The broader S&P 500 index advanced 0.6% to 1,071.25 and the tech-heavy Nasdaq composite index, helped by strength in its technology components, rose 0.9% to 2,198.23.

There was some optimism about technology stocks but technology bellwether IBM’s IBM after-the-close earnings disappointed investors.  IBM’s weaker-than-expected revenue intensified after-hours selling as investors overlooked its upbeat earnings outlook.  Its shares fell in after-hours trading after tacking on 1.4% in regular trading.  Earnings for the quarter rose 12.5% y/y, but revenues of $23.7 billion were below Zacks estimates of $24.2 billion due to a weak dollar that lowered overseas sales by $500 million.  For 2010, IBM IBM expects earnings of $11.25, a nickel higher than its prior estimate.

Shares in Boeing BA jumped 2% in regular trading yesterday after the planemaker said Dubai’s Emirates has placed a $9.1 billion order for 30 of its large body 777-300ER jets.  However, the shares retreated in after-hours trading.  Microsoft MSFT was another notable gainer among technology names, rising 1.4% as UBS UBS raised its fourth quarter earnings estimate on the company to 47 cents from 45 cents a share.  Intel INTC closed up 2.7%.

However, shares in Bank of America BAC fell 2.7% and led the decliners on the DJIA after Goldman Sachs GS took the stock off its Conviction Buy List even as at least three other brokerage firms cut their price targets on the firm’s shares.

Investors sent Halliburton HAL stock flying to the top of S&P 500 chart after the company comfortably beat estimates.  The company reported second quarter operating earnings of 52 cents a share that was above estimates of 36 cents, versus 29 cents a year earlier, on better-than-expected revenues of $4.39 billion that beat estimates of $4.08 billion.

Action on the S&P500 was upbeat as all ten industry sectors closed with gains. Leading the gains were utility shares (+1.4%), technology (+1.1%), oil and gas (+0.9%), industrials (+0.7%), telecommunications (+0.6%), health care (+0.4%).  Sectors such as basic material, consumer goods, and consumer service recorded gains of 0.2% while financial shares as a whole advanced 0.1%.

Texas Instruments TXN earnings came in-line with Zacks projections.  The company reported earnings of 62 cents, sharply up from year-ago numbers of 20 cents, on a 42% revenue jump to $3.5 billion, below Zacks expectations of $3.52 billion.  Texas Instruments noted lower chip sales to a single customer was the reason behind its lower-than-expected revenue.  The firm said it expects third-quarter earnings of 64 cents to 74 cents a share on revenues of $3.55 billion to $3.85 billion.