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Demand Upswing: Lots of Bullish Signs

Bob Pisani is off; this post was written by CNBC producer Robert Hum.

Stocks opened flat and fell further after S&P futures slipped about 5 points following a disappointing June durable goods report. The US Commerce Department reported demand for durables had its steepest drop since last August, falling 1.0 percent. That was significantly below economists’ expectations of 1.0 percent GROWTH. In addition to June’s surprising decline, May’s number was revised lower from down 0.6 percent to down 0.8 percent.

Despite the data this morning, there are a number of bullish signs across a variety of sectors reflecting an upswing in demand:

1) Norfolk Southern beat estimates ($1.04 vs. $0.99 consensus) as the railroad saw strong freight demand, particularly in transporting coal and general merchandise. Overall rail volumes were up 22 percent vs. a year ago.

Another positive signs: the company noted that all previously-furloughed train and engine employees have now been brought back. Additionally, only 8,000 cars remain in storage, down sharply from its peak of 35,000.

2) The International Air Transport Association (IATA) reported that air freight traffic soared 27 percent in June. Meanwhile, passenger traffic was up nearly 12 percent last month, led by a robust 16 percent increase in Asia. Passenger volumes are now slightly above the pre-recession highs set back in Q1 2008.

3) Corning’s results were better than expected ($0.58 vs. $0.52 consensus). Sales of its LCD TVs remained “robust,” gaining 7 percent from the prior quarter and jumping 24 percent year-over-year.

Encouraging signs ahead too: CFO James Flaws notes, “LCD glass demand was much stronger than we expected in the second quarter. We believe the glass demand level will remain robust in the third quarter." Additionally, the company believes that retail demand for LCD products “will remain healthy in the second half of this year.”

4) Sprint reported a wider loss, but the shares are trading up on some encouraging subscriber data. The phone carrier lost fewer contract subscribers than expected (228,000 subscribers lost vs. 763,000 subscribers lost in year-ago quarter). However, when including prepaid customers (those not subject to contracts), it saw its first subscriber gain in 3 years.

Furthermore, continued subscriber growth is seen ahead: CEO Dan Hesse notes “we feel we can confidently improve our subscriber forecasts for the second half of 2010 and deliver positive total net wireless subscriber additions for the remainder of the year."

5) Wyndham Worldwide (WYN) earnings topped estimates ($0.51 vs. $0.40 consensus). Sales also rose more than expected as occupancy at its hotels edged higher (50.2 percent vs. 48.9 percent in year-ago quarter).

Just like Sprint and Corning, the company’s CEO, Stephen Holmes, expressed optimism ahead: "Based on what we're seeing, we're seeing a strengthening and some momentum building...Each one of our businesses was ahead of our expectations and we felt that momentum would help us through the rest of the year."

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