Market Insider

Financials and Tech Earnings Dominate


Bank of America and Morgan Stanley are on tap Thursday with early morning earnings reports, while some of the biggest tech names — Google, Microsoft, Intel — weigh in after the bell.

NYSE Traders

There are a few economic reports, including weekly jobless claims, which rose unexpectedly last week. The string of lower claims reports in December and early January has been an encouraging sign of progress in the labor market, and another move higher would be viewed as a setback. The claims report, CPI and housing starts are all reported at 8:30 a.m. EST. The Philadelphia Fed survey is reported at 10 a.m.

Stocks continued to drift higher in a typical January effect move Wednesday, with the S&P 500 finishing above 1,300, at its highest level since July. The S&P 500 was up 1.1. percent at 1,308, while the Dow rose 0.8 percent to 12,578.

“If they can blow out above 1,312 (on the S&P), then you get into the high 1,320s, and the ultimate goal is 1,350, and that’s where the key resistance is at,” said Art Cashin, director of floor operations at UBS. “You’re getting right into  a usually unattractive time for the market — late January, sometimes into March and even May, depending on how you look at it.”

Wednesday’s market was helped by the best reading on the National Association of Home Builders index since mid-2007, as well as reports that Greece could be close to a deal with creditors. The early morning earnings report from Goldman Sachs , while lower, did top expectations and was also a positive for market sentiment.

Traders have shrugged off this quarter’s earnings as being fairly lackluster so far, and there is an expectation the market could start to react unless the next wave of numbers are stronger. But still the rising stock market could begin to draw in more investors, afraid to lose out on recent gains.

“Today you were very clearly living on hope. Lots of rumors there will be a Greek deal struck by the weekend. Interestingly enough, the U.S. market believed the rumors more than the European markets did,” said Cashin. Greek officials meet private creditors again Thursday to continue negotiating debt restructuring, critical to Greece’s next aid payment.

Cashin said Bank of America is the number traders are watching. “That’s the big one with a lot of questions about it, and we’ll be going through that with a fine toothed comb,” he said.

Earnings are also expected from Blackrock, Freeport McMoran, United Health, Southwest Air, and Union Pacific before the opening bell.  IBM and American Express also report after the closing bell.

Earnings to Watch

Oil Drill

Oil futures firmed in evening trading Wednesday, crossing above $101 per barrel, after API reported stock piles fell by 4.8 million barrels last week. Analysts expected to see a build of 2.8 million barrels. EIA oil inventory data is released Thursday morning, as is weekly natural gas data at 10:30 a.m.

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