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Terranova: 'Amazon A Stock To Own Going Forward'

After hours, shares of Amazon surged as much as 11% after the company reported better-than-expected third quarter profit and a stronger sales outlook.

Specifically, the online retailer earned 45 cents a share in its third quarter on sales of $5.45 billion, compared with 27 cents a share on sales of $4.26 billion on the same period last year.

The company gave a fourth-quarter revenue projection of between $8.13 billion to $9.13 billion.

“Kindle has become the No. 1 best-selling item by both unit sales and dollars—not just in our electronics store but across all product categories on Amazon.com," Jeff Bezos, founder and CEO of Amazon.com said in a prepared statement.

“It's also the most wished for and the most gifted. We are grateful for and energized by this customer response. Earlier this week we began shipping the latest generation Kindle. Its 3G wireless works in the U.S. and 100 countries, and we've just lowered its price to $259," he added.

What’s the trade?

Of all the names that reported after the bell, Amazon is the stock to own going forward, says Joe Terranova. E-commerce is a huge growth area – it’s absolutely exploding -- and who’s the leader in the space? It’s Amazon. I expect this stock to take out historic highs.

RBC has a $120 price target on Amazon, reminds Pete Najarian. If Ebay is missing then Amazon is hitting.

The stock bounced off $93.30, adds Tim Seymour. I also like it going forward.

At 55 times earnings, it’s very hard for me to jump on the train, counters Karen Finerman. The earnings reports is great but I just can’t get on board.

> For complete coverage of Amazon earnings click here
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AFTER HOURS ACTION: CAPITAL ONE

Shares of Capital One jumped as much as 7% in extended trade after the credit card giant reported its first quarterly profit of the year.

Third-quarter net income available to common shareholders was $425.6 million, or 94 cents per share, and compared to a profit of $374.1 million, or $1.00 per share, in the same quarter last year

What’s the trade?

These results are the perfect example of why you shouldn’t fight the tape, muses Pete Najarian.

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AFTER HOURS ACTION: AMERICAN EXPRESS

Shares of American Express gained in extended trade after the firm reported a profit that topped Wall Street's expectations.

The credit card issuer said it earned 54 cents a share in the third quarter, excluding one-time items, down from 74 cents a share this time last year.

Sales in the most recent quarter came in at $6 billion, compared with revenue of $7.164 billion in the same period a year ago.

What’s the trade?

I’m watching what they say about consumers, says Karen Finerman. If consumer credit is getting stronger that bodes well for Bank of America.

> For complete coverage of American Express earnings click here

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DOW RECLAIMS 10,000

The Dow closed above the psychologically important 10,000 level on Thursday after several Dow components including 3M, Travelers and McDonald's posted solid earnings that lent credence to the idea corporate profitability has stabilized.

Financials were among the top gainers and turned sharply higher New York Fed President William Dudley said the Federal Reserve may not lose money on the emergency programs it put in place to fight the financial crisis.

Adding to the tailwind, PNC reported far-better-than-expected quarterly earnings than expected. The firm said credit quality deterioration eased and investment gains increased.

What’s the trade?

It kind of surprised me that the market used the comments from Dudley to rally the financials, muses Karen Finerman.

In financials it’s important to watch Goldman , reminds Pete Najarian. It turned and then the S&P followed.

I’m watching 1100 on the S&P, says Joe Terranova. I think we break above that level and resistance becomes support.

I agree with Joe, it feels like stocks want to go higher, adds Tim Seymour.





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