NASDAQ POSITIVE FOR 11 DAYS STRAIGHT
The Nasdaq rose on Wednesday posting its 11th straight daily gain, buoyed by solid profits from Apple and Starbucks . Now investors are sifting through the latest earnings reports from eBay and Qualcomm trying to determine if tech can keep the party going.
AFTER HOURS ACTION: EBAY
Shares of eBay climbed as much as 3% in extended trade after the company reported quarterly net profit and revenue that beat Wall Street expectations.
Excluding one-time items, eBay earned 37 cents per share, a penny above the 36 cents per share expected, on average, by analysts, according to Reuters Estimates.
Operating margins fell to 19.6 in the quarter from 24.8 percent a year earlier, the company said, hurt by the effect of the stronger U.S. dollar against foreign currencies.
“(But) it’s a lot less bad news than the Street expected,” explains CNBC’s Jim Goldman.
What’s the trade?
I think these earnings show stabilization, muses Joe Terranova. I’d play it by getting long Amazon ahead of their earnings.
> Click here for complete earnings coverage of eBay
AFTER HOURS ACTION: QUALCOMM
Share of Qualcomm traded lower in the after-hours after the company posted a smaller quarterly profit as demand weakened for its wireless chips because of slowing cellphone sales but it raised its revenue target for 2009, citing strong fundamentals.
Qualcomm Chief Executive Officer Paul Jacobs, who also serves as chairman, offered positive guidance, however saying the quarter saw strong licensing and royalty revenue from healthy demand in the previous quarter. Shipments of mobile chip sets were also strong, pointing to a recovery in the mobile phone market.
What’s the trade?
I’d wait for the stock to shake out and then buy the dip, counsels Joe Terranova. I think the company is giving conservative guidance. I like the sales and profits
I can’t get excited about this stock, counters Steve Grasso.
> Click here for complete earnings coverage of Qualcomm
TOPPING THE TAPE: APPLE
Shares of Apple surged on Wednesday after the tech titan smashed profit forecasts. The company continued to defy the global recession with a solid 13 percent jump in fiscal third-quarter net profit. It sold more than seven times as many iPhones -- 5.2 million units of its latest signature device -- as the year-ago period.
"The numbers are great. Their gross profits continue to surprise people and there is a return to product momentum ... a return to growth in the Mac business," says Andy Hargreaves, an analyst at Pacific Crest Securities. "And then the iPhone is doing tremendously well and that is a potent combination."
Is it too late to get into this trade?
It’s not too late to get into Apple, counsels Tim Seymour. The average Street target is now $195, I think the stock has plenty of room to run.
It agree that for the long-term Apple will go higher, adds Steve Grasso. Apple is a long-term buy.
Morgan Stanley was among the day’s top disappointments after the firm reported its third-consecutive quarterly loss falling further behind chief rival Goldman Sachs .
While Goldman posted a blowout quarter with strong gains in trading and profit, Morgan Stanley was saddled with red ink from the repayment of government bailouts and the accounting ramifications of improvements in its debt prices. Its loss was even wider than Wall Street had expected.
Meanwhile, Wells Fargo added to the pessimism after it posted disappointing second-quarter results as a big surge in bad loans overshadowed record profit.
What’s the trade?
I thought Wells Fargo issued a decent report, says Karen Finerman. I just think the expectations were very high after the recent run.
It seems to me that the earnings power for Wells going forward should be fantastic, adds Tim Seymour.
TOPPING THE TAPE: YAHOO
Speculation that Microsoft and Yahoo are once again talking about an online advertising partnership are heating up again, ahead of Microsoft’s Thursday’s report.
The renewed chatter largely stems from a report in All Things Digital that says the deal could happen within one week!
So far, neither company has commented and no deal emerged.
It just seems to me that Yahoo! is going to have to get a deal done, says Joe Terranova. As far as I can tell its Yahoo! that’s losing share to Bing.
It feels like a "spruce” job, adds Tim Seymour. To me that Carol Bartz is cutting costs to make the company attractive to sell, he speculates.
This chatter has been going on for a year and a half, reminds Karen Finerman. Personally, I don’t think we’re going to hear about a deal this week.
BULL MARKET OR BS?
Strong results for the April-June quarter have propelled major stock indicators more than 8 percent in the past seven days. And now some analysts are warning that a pullback seems likely.
Danielle Park Of Venable Park Investment Counsel tells Fast Money that she still expects stocks will retest the downside to some magnitude.
She's particularly concerned about weakness in overseas banks. “There are ominous shoes to drop in Japan and Europe,” she says.
However she's encouraged by the progress being made in technology. Tech should be leading if we're coming out of recession.
Although we didn't get to this on air, before the broadcast she recommended the following plays to our producers:
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Trader disclosure: On July 22nd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm Owns (MSFT), (PBG), (TYC), (YUM), (NOK), (WMT), (TGT); Finerman's Firm And Finerman Own (BAC) Preferred Shares, Finerman Owns (BAC); Finerman's Firm And Finerman Own (WFC) Preferred Shares, Finerman's Firm Is Short (WFC); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (USO), (MCO); Seymour Owns (AAPL), (MSFT), (SBUX), (UNG); Grasso Owns (BAC); Terranova Owns (MCD), (QCOM), (AMZN), (AXP), (MSFT), (SUN), (FTO); Terranova Works For (VRTS); Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
For Steve Grasso:
Stuart Frankel Clients Own (V), Grasso Owns (V)
Stuart Frankel ClientsOwn (OXY), Grasso Owns (OXY)
Stuart Frankel Clients Own (WMT), Grasso Owns (WMT)
Stuart Frankel Clients Own (GS), Grasso Owns (CSCO)
Stuart Frankel Clients Own (UNH)
Stuart Frankel Clients Own (DD)
Stuart Frankel Clients Own (INTC)
Stuart Frankel Clients Own (JPM)
Stuart Frankel Clients Own (MS)
Stuart Frankel Clients Own (AXP)
Stuart Frankel Clients Own (MHP)
For Joe Terranova:
Virtus Investment Partners Owns More Than 1% Of (ABD)
Virtus Investment Partners Owns More Than 1% Of (CBL)
Virtus Investment Partners Owns More Than 1% Of (CAL)
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (MEE)
Virtus Investment Partners Owns More Than 1% Of (DBC)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (DBA)
Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co
Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights
Virtus Investment Partners Owns More Than 1% Of (SKT)
Virtus Investment Partners Owns More Than 1% Of (TNB)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (WBMD)
For Danielle Park:
Park And Venable Park Investment Counsel Own (SPY)
Park And Venable Park Investment Counsel Own (XCB)
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