Tuesday, April 19, 2011

Mixed Action Despite Solid Earnings Reports

The market is mixed in early trading, with the S&P slightly higher while the Nasdaq is barely negative. There have been a lot of earnings reports to come out last night and this morning, and the reactions in stocks reporting has been fairly mixed.

Texas Instruments (TXN) and Seagate (STX) both missed estimates, and that is weighing on chip stocks and the tech sector at large.

Among banking stocks, Goldman Sachs (GS), Northern Trust (NTRS), and US Bancorp (USB) all reported solid earnings reports, but their stocks have traded lower since reporting. Sentiment for the financial group remains tepid at best, and most of the stocks in the group remain in corrections.

On the plus side, JNJ finally reported an improved outlook, and its stock has really popped higher. Also, transportation stock PCAR is up nicely after reporting earnings.

Asia's markets were lower across the board last night, led by a 1.9% decline in China. The 10-year yield is a bit lower to 3.36%. An the VIX is back down to 16.70. The VIX spiked 20% higher early yesterday, but faded as the session wore on and gave back most of its gains.

Trading comment: We added to many of our favorite names yesterday, starting with the more blue-chippish ones: VNO, DE, EMR, SRCL, AAPL, CTSH, IBM, etc. As for the more aggressive growth stocks we follow, I like to wait a bit longer for the correction to run its course, and then identify which ones are the first ones to break out hint to investors that they could lead any next leg higher.



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