U.S. stock futures rally on strong corporate earnings reports

Posted by Eric LeRiche | April 14, 2010 .

The Dow Jones Industrial Average (DJIA) closed above the 11,000 level for the second consecutive session on Tuesday, but the 10,950 level and the Dow’s 10-day moving average did all the heavy intraday lifting. Meanwhile, the S&P 500 Index (SPX) remains trapped between short-term support at the 1,190 level and round-number resistance at 1,200. However, the bulls may not be quite as timid today, as sentiment on Wall Street is being bolstered by strong quarterly earnings reports from Intel Corp. (INTC) and JPMorgan Chase & Co. (JPM). As a result, futures on the DJIA and SPX are trading roughly 27 points and 3 points above fair value, respectively. With the SPX closing at 1,197 and change last night, we could see this broad-market indicator finally make a serious run at resistance in the 1,200 region.

In earnings news, Intel Corp. (INTC) reported a first-quarter profit of $2.4 billion, or 43 cents per share, as revenue rose to $10.3 billion. Analysts were expecting earnings of 38 cents per share on revenue of $9.8 billion. Looking ahead, Intel issued a better-than-expected sales forecast for the second quarter, and raised its target for gross margins for the full year. In electronic trading, INTC is up more than 4% heading into the open.

JPMorgan Chase & Co. (JPM) posted first-quarter net income of $3.3 billion, or 74 cents per share. Total net revenue was $27.7 billion. Analysts were expecting a profit of 65 cents per share on revenue of $25.9 billion. In pre-market activity, JPM shares are up nearly 2% following the report.

Earnings Preview

On the earnings front, Yum! Brands Inc. (YUM) is slated to release its quarterly earnings reports.

Economic Calendar

The economic calendar comes fully loaded today, with the March consumer price index (CPI), the core CPI, March retail sales, February’s business inventories, weekly U.S. petroleum supplies, and the Fed’s Beige Book all slated for release. Weekly initial jobless claims hit the Street on Thursday, followed by the Philadelphia Fed’s manufacturing index and March’s capacity utilization and industrial production reports. Friday finishes next week with March’s building permits, March’s housing starts, and the University of Michigan’s consumer sentiment index for April.

Have fun!

Eric$

www.InvestorRules.com

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