Demand Improving in Many Sectors

Bad day for the dollar: the Euro, the Swiss franc, aand the Australian dollar are at a new high versus the dollar.

The theme today: demand is clearly improving in several sectors, which is propelling better-than-expected earnings from a number of companies:

1) CSX is up fractionally after reporting better-than-expected earnings ($1.06 vs. $1.04 consensus) and revenues. Volumes jumped 7 percent, led by a strong 20 percent surge in auto shipments.


Also helping: double-digit increases in metals, forest products, and intermodal volumes along with higher overall pricing.

Expect stronger demand and pricing power to continue too — the railroad says volume growth will exceed GDP growth and pricing will remain above inflation.

2) UTX rises 3 percent after earnings topped estimates ($1.11 vs. $1.07 consensus). Organic sales great 9 percent highlighted by a 26 percent surge in Carrier HVAC orders and an impressive 17 percent rise in orders at its Otis elevator segment.

The Dow component also raised its full-year outlook to $5.25-$5.40 vs. $5.36 consensus.

3) Freeport McMoRan up 5 percent pre open, posted earnings of $1.57, well above consensus of $1.26, on revenues of $5.71 billion, also well above consensus of $5.31 billion. Copper and gold sales were higher than expected, and the outlook for copper and gold production was strong. Want more? They announced a special $474 million dividend ($0.50 a share!) for the quarter, that's on top of the regular $0.25 dividend.

4) Computer software maker VMware up 11 percent pre-open, beat expectations and raised its forecasts. Cloud computing types will be happy, but Juniper had a weak outlook. EMC holds a controlling stake in VMW.

5) Before you get too excited, note there is still no improvement in housing: building products giant US Gypsum (think sheetrock) one of the few stocks trading down pre-open, reported an operating loss of $1.01, worse than consensus. "We are seeing signs of stabilization in U.S. commercial construction and positive trends in the repair and remodel segment, but the new residential construction market remains weak," CEO James Metclaf said.

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