Trader Talk

New Signs of Hope for Stocks?

Bob Pisani is off this week, this post was written by CNBC producer Robert Hum

Stocks opened fairly flat, while commodity stocks have lagged a bit with most commodities declining in early trading.

Despite the lackluster move in stocks after the open, a better-than-expected weekly jobless claims report did help futures move off their earlier lows this morning. In the last week, jobless claims fell to 550,000, better than the 560,000 level economists had expected and down from the 570,000 level in the prior week. Additionally, continuing claims fell to 6.1 million, its lowest level since April.

Also providing a little lift to futures throughout the morning was a handful of more optimistic corporate outlooks today:

a) Procter & Gamble shares rise 1 percent after the consumer products maker reaffirmed its organic sales and earnings outlooks for the current (Q1) quarter and full year. The Dow component also sees organic sales returning to growth in its second quarter.

b) General Mills is also up about 1 percent after it now sees its fiscal Q1 earnings topping current internal forecasts. The optimism comes as cost pressures from rising commodity prices have eased.

c) Texas Instruments is up 1 percent after boosting its Q3 outlook. The semiconductor manufacturer now sees revenues at $2.73 billion - $2.87 billion vs. $2.69 billion est. Earnings are seen at $0.37-$0.41 vs. $0.35 est.

d) Corning shares are fairly flat despite issuing a more optimistic outlook on its third and fourth quarters. The maker of LCD glass sees demand improving in its current third quarter. It now expects volumes to fall only 5 percent from the second quarter (compared to its prior forecast of a 5 percent to 10 percent decline in volumes).

Additionally, Q4 volumes are seen as strong as the third quarter – which is stronger than the company had previously thought.


1) Airlines are flying higher after JPMorgan said does not expect any forthcoming airline bankruptcies as long as demand and jet fuel prices remain stable. AMR and Delta are all rising about 8 percent.

Meanwhile, JPMorgan also upgraded US Airways and UAL which are soaring 16 percent and 19 percent, respectively.

2) Monsanto falls 8 percent after providing a disappointing 2009 and 2010 outlook on weakness it its glyphosate-based herbicides due to greater competition. The seed company sees its current year earnings at the low end of its previously-issued range of $4.40-$4.50.

Weighing more on the stock is the firm’s expectations of 2010 earnings between $3.10 and $3.30, a range that’s significantly below the Street’s expectations. Analysts are currently expecting 2009 earnings of $4.41 and 2010 earnings of $4.08.

3) Men’s Wearhouse reported better-than-expected Q2 results, but issued a disappointing Q3 outlook. Second quarter earnings for the men’s apparel retailer beat estimates ($0.63 vs. $0.61) amid a 3.5 percent decline in same-store sales.

Looking ahead, the retailer sees earnings short of analyst expectations ($0.27-$0.30 vs. $0.32 est.) as its apparel same store sales will continue to fall 2 percent to 3% and gross margins will remain under pressure.



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