Market Struggles For Gains, But CIT Soars
Stocks struggled for direction Friday, trading right around breakeven as worries over General Electric earnings threatened to thwart the market's week-long rally.
GE shares hit a sharp slide even though the company's earnings actually beat Wall Street estimates. Credit-quality issues that have dogged financial firms, though, put a damper on the report and prevented the Dow and S&P 500 from getting into positive territory. Tech stocks struggled as well after a week of outperformance.
CIT Group was among the big stories of the day as the major commercial lender weighed options to avoid bankruptcy, including talks with JPMorgan Chase and Goldman Sachs for a $2 billion to $3 billion short-term cash infusion. CIT shares were approaching 100 percent gains for the day.
An economic report showing an unexpected rise in new housing starts and building permitshelped stoke some enthusiasm.
And International Business Machines rose after beating earnings estimates and raising its outlook Thursday.
But General Electric reported a second-quarter profit of 26 cents a share, topping consensus estimates of 23 cents a share. Revenue of $39 billion was slightly below the $42 billion analysts predicted. (GE is the parent company of CNBC.)
At the same time, Bank of America beat expectations with earnings of 33 cents per share against estimates of 29 cents, but traders looked at warnings of tough sledding for the rest of of the year.
Citigroup helped stem the negative tide a bit, reporting a $4.3 billion profit helped significantly from a joint deal with Morgan Stanley regarding Citi's Smith Barney Unit.
Wall Street will attempt to make it a perfect week for the bulls — with the Dow, the S&P 500 and the Nasdaq rising in all four trading days so far this week.
The Nasdaq is riding a 7-session winning streak, gaining about 8% over that time. The Nasdaq last had a 7-session winning streak in September of 2006.
Earnings will likely determine whether those streaks will continue during the Friday session.
Google shares fell after its sales outlook disappointed investors.
On a positive note, toymaker Mattel gained after the company said that while sales of Barbie and other products fell in the second quarter, profit rose 82 percent.
Shares of Ford Motor moved higher as Credit Suisse analyst Christopher Ceraso doubled the price target for the automaker to $8 and said the company was likely to post a strong earnings surprise for the quarter.