Good day for earnings, big industrials leave full-year guidance unchanged. Of 19 large companies that have reported since the close yesterday, 18 beat earnings expectations, but several—including big multinationals like United Technologies—came in light on the top line.
My biggest fear? That big global industrials reporting today would lower full-year guidance on concerns over global guidance. It did not happen, though several noted the second quarter might be slightly weaker than expected.
a) Multi-industry: A big day for this group, which makes lots of things (tools, machines, auto parts, pumps, building supplies, heating ventilation and air conditioning, etc.) that are sold to companies all over the world; it's the stuff that's behind the walls of all the buildings and a good indicator of global growth.
There were bottom-line beats from United Technologies, Ingersoll-Rand, Illinois Tool Works, and Johnson Controls, though all of them came in a tad light on the top line. United Tech's organic growth was negative two percent. The main issues: A weaker Europe and defense cuts (Sikorsky helicopter) were problems. No change to guidance.
Ingersoll-Rand is taking an 11-cent charge for restructuring and reiterated its 2013 outlook, though second-quarter guidance was below expectations.
Illinois Tool Works also maintained 2013 guidance, though second-quarter guidance had mid-point below consensus.
Johnson Controls also left 2013 guidance unchanged.
The good news: 2013 is intact. The bad news: These companies are counting on a step-up in earnings in the third quarter. That is why many (Ingersoll-Rand, for example) are so big on restructuring.
Speaking of industrials: JPMorgan upgraded Caterpillar to "overweight," saying "we believe that most of the downside risk has been priced into the stock at this point, and that risk/reward favors owning the stock." With good reason: The stock has gone from $100 to $80 and change in a couple of months.
c) Defense: Lockheed Martin beat, but said 2013 revenue would come in at the low end of guidance due to the U.S. budget cuts.
e) Xerox is accelerating its restructuring to become more of a services company and less of a hardware company. It beat, but warned that second-quarter profit would come in below estimates. It must be optimistic about the restructuring, saying it will meet its full-year target of $1.09 to $1.15 a share.
1) Home builders up after Barclays upgraded U.S. building products and home building to "positive" from "neutral."
(Read More: Bulls Come Back to Home Builders)
2) China Flash April PMI disappoints, down to 50.5 in April from 51.6 in March, missing expectations by a point. Most of Asia traded lower. Europe was entirely in the green, as Flash PMI there was in line with expectations, though Germany disappointed.
3) Goldman Sachs, which went short gold just before it's significant drop two weeks ago, has closed it's short position, for a potential gain, it claims, of 10.4 percent. In typical Goldman fashion, it declared: "Our bias is to expect further declines in gold prices on the combination of continued (exchange-traded fund) outflows as conviction in holding gold continues to wane as well as our economists' forecast for a re-acceleration in US growth later this year."
—By CNBC's Bob Pisani