Stocks Jump In Late Rally
STOCKS JUMP IN LATE RALLY
The S&P rose in volatile trade on Thursday as better-than-expected results from several regional banks lifted financial shares, overshadowing disappointing economic data and anemic outlooks from economic bellwethers like UPS.
Investors discovered some renewed optimism about banks after PNC reported a profit more than twice as great as analysts expected largely due to the acquisition of National City, which helped offset a surge in nonperforming commercial loans.
Strategy Session with the Fast Money Traders
The financials seem to be dominating this market, muses Pete Najarian. When the financials turned, the entire market followed. Also, the Vix is much lower than it was a few months earlier, he adds. That suggests investors are far less nervous about banks than they were.
To me it feels like the market is getting stale, counters Guy Adami. There might be more upside action but I don’t think it will be explosive.
AFTER HOURS ACTION: MICROSOFT
After hours shares of Microsoft made gains after the software giant reported numbers that were in-line with estimates, albeit lower than last year.
Excluding one-time items, the software giant reported a profit of 39 cents a share in its fiscal third quarter, on a topline of $13.65 billion.
In the same period last year, Microsoft turned in a profit of 47 cents a share on revenue of $14.45 billion
This quarter was not good for Microsoft, says Jeff Macke. I don’t really get why they stock is higher after hours.
The stock is trading near the $20 level and that’s been resistance, adds Guy Adami. I'd expect trouble up here.
The stock is trading higher because Microsoft said they're ahead of schedule on cost reduction plans, explains UBS Software analyst Heather Bellini. I’m cautious, but if they’re getting costs under control I think investors may grow bullish due to the introduction of Windows 7.
THE OBAMA TRADE: CREDIT CARD CHARGE HIGHER
Shares of Mastercard and Visa closed higher after President Obama urged U.S. credit card company executives to stop unfair rate increases and be more transparent and accountable, tapping into popular outrage over abusive lending.
"Its been out of balance, so we need to create a new equilibrium where credit is flowing, those who are issuing credit are able to make a reasonable profit, but doing so in a way that's responsible, and consumers are not finding themselves in a bad situation they didn't anticipate,” Obama said.
It seems to me the President is saying the companies have to be responsible and not the people who can’t pay their credit card bills, bristles Jeff Macke. Bring back debtor's prison.
AFTER HOURS ACTION: AMERICAN EXPRESS
After hours shares of American Express climbed as much as 5% after the company reported earnings that declined from last year but easily outstripped analysts' estimates.
The credit card issuer, a component of the Dow Jones Industrial Average , reported earnings of 32 cents a share on revenue of $5.9 billion in the first quarter. Those numbers compare with a profit of 84 cents a share on a topline of $7.186 billion last year.
The company was expected to report a profit of 12 cents a share on sales of $6.447 billion, according to a consensus estimate compiled by Thomson Reuters.
It seems to me that investors have discounted these stocks, muses Guy Adami. I think it’s interesting, here.
I also think Amex was probably overdone on the downside, adds Tim Seymour.
AFTER HOURS ACTION: AMAZON
Amazon.com Thursday posted higher quarterly net income, with revenue rising 18 percent in the sluggish global economy, beating Wall Street expectations and its shares rose.
The global online retailer said first-quarter net income rose 24 percent to $177 million, or 41 cents per share, from $143 million, or 34 cents per share, a year earlier.
Analysts, on average, had been expecting earnings of 31 cents, according to Reuters Estimates.
Amazon is a great merchant, says Jeff Macke. That’s the takeaway from the numbers.
I like these numbers too, muses Pete Najarian. But I want to know how they’re going to build on the numbers going forward.
CHARTOLOGY: MICROSOFT, AMAZON TOMORROW
How will the stocks that are very active after hours on Friday perform at the open. For insights we turn to the charts and technical analyst Dan Fitzpatrick.
He says patterns in Amazon’s chart suggest to him that this stock is ripe for a pullback. "It's had a 30% run," he explains. "I think the risk is to the downside because the stock is so far extended."
However, because Microsoft has been underperforming the Nasdaq this month, he doesn’t think it takes much for Mr. Softee to move higher. "If it stays above $20 it could go to $25," says Fitzpatrick. "And the line in the sand on the downside is probably $17."
To see Fitzpatrick’s full analysis please watch the video.
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Trader disclosure: On Apr 23rd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (SDS), (AGN), (WYNN), (GE), (LVS), (IMAX); Seymour Is Short (AAPL); Seymour's Firm Is Short (POT); Seymour Owns (BAC), (EEM), (TCK); Najarian Owns (AMZN) Calls; Najarian Owns (BX) Call Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (MCD) & (MCD) Calls; Najarian Owns (MS) & (MS) Calls; Najarian Owns (PALM); Najarian Owns (RIO) Calls; Najarian Owns (XHB) Cal Spread; Najarian Owns (XLB) Call Spread
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