Stock Market Today: Third Big Bank Beats Estimates

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Coming off the second best week of the year, the stock market today was little changed in early trading.

Shortly before noon, the Dow Jones Industrial Average added 5.99, or 0.04%, to 15,470.29. The Standard & Poor’s 500 Index and the Nasdaq were both up less than one point.

Last week, U.S. stocks logged a third straight week of gains. The Dow finished up 2.2%, to 15,464.30, an all-time high. The S&P, up 3% for the week to 1,680.19, also ended in record territory.

Meanwhile, the tech heavy Nasdaq enjoyed its seventh consecutive week of gains, its longest winning stretch since July 2011. Up 3.5% last week, the benchmark sits at its highest level in some 13 years.

Second-quarter earnings season kicked into high gear this week starting with much better-than-expected earnings from Citigroup Inc. (NYSE: C) on Monday.

However, holding back the stock market today was the Commerce Department’s weak retail sales report showing a growth of just 0.4% in June, compared with the expected 0.8%. Excluding a surge in auto sales, retail sales were actually flat last month.

Moreover, fresh data revealed China’s economy grew at a slower 7.5% pace in the second quarter compared to a year ago. The Asian nation’s “goldilocks” report—not too hot, not too cold—matched the government’s target and consensus estimates.

Tuesday we get numbers from Goldman Sachs Group Inc. (NYSE: GS), Johnson & Johnson (NYSE: JNJ), The Coca-Cola Co. (NYSE: KO) and Yahoo! Inc. (Nasdaq: YHOO).

Wednesday we hear from Bank of America Corp. (NYSE: BAC), International Business Machines Corp. (NYSE: IBM), Intel Corp. (Nasdaq: INTC), American Express Co. (NYSE: AXP) and eBay Inc. (Nasdaq: EBAY).

Thursday brings reports from Verizon Communications Inc. (NYSE: VZ), Morgan Stanley (NYSE: MS), Google Inc. (Nasdaq: GOOG) and Microsoft Corp. (Nasdaq: MSFT). Also, Dell Inc. (Nasdaq: DELL) holds a special shareholder meeting about the ongoing take-over/take-private saga.

We wrap up the week with earnings from General Electric Co. (NYSE: GE) on Friday.

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A number of economic reports, including readings on the CPI, housing market, Beige Book and the Fed’s balance sheet could also move markets in the days ahead. And central bankers continue to make the rounds with a speech from member Esther George on Tuesday.

Wednesday, Fed Chairman Ben Bernanke delivers his semi-annual testimony to Congress on monetary policy. Investors will be closely listening for any clues about the central bank’s intentions on economic stimulus.

Movers in the Stock Market Today

If you’re investing in any of the following companies, don’t miss this news pushing their share prices today: 

  • AT&T Inc. (NYSE: T) slipped 1% after announcing a deal late Friday to buy Leap Wireless Intl Inc. (Nasdaq: LEAP) for $1.2 billion in cash. But shares of the prepaid wireless provider leapt 115%. The deal allows AT&T, the second largest U.S. carrier, to quickly build its presence in the growing pre-paid market. “The combined company will have the financial resources, scale and spectrum to better compete with other major national providers for customers interested in low-cost pre-paid service,” AT&T said in a statement.
  • Alexion Pharmaceuticals (Nasdaq: ALXN) saw heavy volume after rumors swirled Swiss drug giant Roche was raising financing to buy Alexion, which makes drugs for rare diseases. Alexion is valued at more than $22 billion, leaving some analysts to see any deal with Roche too pricey.
  • The Boeing Company (NYSE: BA) bounced 2.22% after British investigators said a Dreamliner fire last Friday at London Heathrow Airport was not linked to its batteries, a source of Boeing’s past problems.
  • Citigroup Inc. (NYSE: C) climbed 1.14% after reporting a 26% rise in profits thanks to a rebound in trading and stronger home prices that reduced mortgage losses. The most global of the big banks, Citi earned $1.25 per share, handily beating the $1.17 analysts were expecting. Net income for the third-largest U.S. bank came in at $3.89 billion, up from $3.08 a year ago. The stock is up roughly 28% year-to-date and has doubled in the past year. CEO Mike Corbat has been moving to cut costs and increase earnings since October when the board tapped him to replace ousted Vikram Pandit.
  • Oracle Corp. (NYSE: ORCL) began trading at its new home, the NYSE, after ditching the Nasdaq for the Big Board. With a global market cap of $156.4 billion, ORCL’s move is the largest market transfer in exchange history. Investors welcomed the move, sending ORCL shares up 1.52%
  • Tiffany & Co. (NYSE: TIF) rose 3.13% after Stifel boosted the stock to “Buy” from “Hold,” and gave shares a $92 price target. The “Gatsby” effect (increasing wealth among Americans) was cited for the upgrade.
  • VVUS Inc. (Nasdaq: VVUS) fell about 1% after announcing it is delaying its annual shareholder meeting by at least three days, following claims First Manhattan Co. made false statements to shareholders about the introduction and marketing of its obesity drug Qsymia. VVUS wants First Manhattan to correct those alleged statements.

While we look for opportunities as the stock market heads higher, our income specialist Robert Hsu explained how investors can cope in the new bond market. Don’t miss his just-released analysis: Wading Through the Bond Market Bloodbath

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