Stock Market News for April 15, 2010 - Market News

Investors found plenty of reasons to send stocks rallying Wednesday.  While J.P. Morgan and Intel’s better-than-estimated earnings numbers fueled expectations for a strong earnings season, a slew of positive economic data offered upbeat signals about a strengthening economic recovery.

J.P. Morgan (NYSE:JPM) noted its credit card and mortgage payment delinquencies among borrowers with payments one month behind had improved.  However, its operations continued to suffer from souring consumer loans even as CEO Jamie Dimon noted the economy was in a better shape than before.  Dimon said he was hopeful of a "moderate recovery in the US, bolstered by increased business and consumer spending." The bank reported earnings of 74 cents a share, a 55% surge from year-ago numbers, and was a big force behind the market’s surge yesterday.  Shares in J.P. Morgan closed up 4.1% and Intel jumped 3.3%.

The Dow Jones industrial average jumped 103.69, or 0.9%, to 11,123.11, its third straight session above 11,000.  The index is up 2.1% in five days.  The S&P 500 index climbed 13.35 points, or 1.1%, to 1,210.65, its first close above 1200 since Lehman’s collapse in September 2008.  The broader index is up 79% from its 12-year lows of March 2009.

Companies offered promising comments and guidance, setting a strong tone to corporate earnings, already expected to show 37% earnings growth and a 10% revenue gain.

Tech shares gained 1.8%, largely on the strength of Intel’s numbers as the chipmaker also took the lead in propelling the markets higher.  News that Apple (NASDAQ:AAPL) was planning to delay the global iPad launch until the device catches up with strong US demand also kept technology shares in demand.

However, financial shares were in the forefront of yesterday’s rally, rising 2.4%, as J.P. Morgan’s quarterly numbers set the bar high for earnings from the sector.  Banking analysts Mike Mayo advised "the worst of credit trends seems to be over for the big banks," and raised his ratings on Goldman Sachs (NYSE:GS), and Bank of America (NYSE:BAC) to "buy" from "outperform," and upgraded JP Morgan (NYSE:JPM) to "outperform" from "underperform." Mayo took his price target for Citigroup (NYSE:C) to $4 from $3.

An unexpected drop in US weekly crude inventories took crude prices up $1.79 to $85.84 and sent oil and gas sector shares up 1.1%. Consumer service sector shares rose 1.1% as a March retail sales report posted well above expectations.  Health care sector share fell 0.2%, while sectors such as basic materials (+1.0%), consumer goods (+0.4%), telecommunications (+0.1%), and utilities (+0.1%) all ended the day in the green.

This morning China reported first-quarter GDP growth of 11.9%, beating estimates of 11.7%. China's economy expanded at its fastest pace in almost three years, with sequential quarterly growth also high, up 11.3% on a seasonal basis.  However, the strong showing came with fears of more tightening measures. Some analysts noted such moves were necessary to prevent overheating.

Europe continued to give jitters, however.  Yields on Greek bond jumped and the euro fell against the greenback as Greece's longer-term notes suffered from worries that austerity measures, if implemented, would have a telling effect.  The ECB adopted a rather unusual tone, noting "global imbalances [which] continue to pose a key risk to global macroeconomic and financial stability...The stakes are high to prevent a disorderly adjustment in the future that would be costly to all economies."

Fed-speak continues plentiful today, with addresses from Lacker, Bullard, Lockhart and Volcker. Earnings are due from Advanced Micro (NYSE:AMD), Intuitive Surgical (NASDAQ:ISRG), Google (NASDAQ:GOOG) and PPG (NYSE:PPG).

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