Wall Street news today, July 15, 2014: U.S. markets rallied on Monday as concerns over European debt subsided and investors took a more optimistic stance on second-quarter profit season. The financial sector led the charge ahead of their earnings this week. Today's futures were mixed as the markets prepare for Federal Reserve Chair Janet Yellen's semiannual testimony before Congress.
Investors will also keep a close eye today on earnings reports from Yahoo! Inc. (Nasdaq: YHOO) and Goldman Sachs Group Inc. (NYSE: GS), among others.
Here's what you should know to make your Tuesday profitable:
Dimon Days: Shares of JPMorgan Chase & Co.(NYSE: JPM) were up more than 2.5% in premarket hours after the company beat analyst expectations for the second quarter. The company reported net earnings of $25.3 billion, or $1.46 a share, well ahead of Street expectations of $1.29 per share and revenue of $23.8 billion. Despite the positive news, the company still reported an 8% decline in second-quarter revenue, citing weakness in the mortgage markets and reduced trading revenues.
Then There Were Two: In a move that will reduce America's 400-year-old tobacco industry to a duopoly of two large competitors, Reynolds American Inc.(NYSE: RTI) announced it will purchase Lorillard Inc. (NYSE: LO) for $27.4 billion including debt. Shares of both companies were down more than 4% in premarket hours. Reynolds' acquisition provides size and scale to compete against tobacco giant Altria Group(NYSE: MO), which maintains more than half of the nation's market share.
For-Profit Problems: Shares of Apollo Education Group Inc.(Nasdaq: APOL) slipped more than 3.5% in afterhours trading on a report that the U.S. Education Dept. will review federal financial aid programs at the firm's University of Phoenix. The for-profit education industry has come under intense scrutiny in recent years after enrollments surged after the financial crisis. Apollo rival Corinthian Colleges Inc.(Nasdaq: COCO) recently closed or sold more than 100 of its campuses after the government investigated charges of grade fixing, incomplete job placement data, and other problems within the marketing of their education programs.
Merger Mania: The consolidation continues. This morning, specialty chemicals manufacturer Albemarle Corp.(NYSE: ALB) announced plans to purchase its rival Rockwood Holdings Inc.(NYSE: ROC) for $6.2 billion. Shares of Rockwood surged more than 10% on news of the deal.
Cuts on the Rise: Bloomberg reports that Microsoft Corp.(Nasdaq: MSFT) is planning to slash more than 5,500 jobs as the company absorbs Nokia Oyj's handset business. This is the largest workforce reduction by the company in five years. Microsoft purchased the Nokia handset division last year for $7.2 billion. Shares of Microsoft were up marginally in premarket hours.
Earnings Reports: Stay tuned for earnings reports from Johnson & Johnson (NYSE: JNJ), Goldman Sachs Group Inc. (NYSE: GS), Comerica Inc. (NYSE: CMA), Wolverine World Wide Inc. (NYSE: WWW), CSX Corp. (NYSE: CSX), Yahoo! Inc. (Nasdaq: YHOO), and Intel Corporation (Nasdaq: INTC).
Today's Economic Calendar: Today's schedule features testimony to Congress by Federal Reserve Chair Janet Yellen, an update on retail sales across the country, and the Empire State manufacturing survey.
Full U.S. Economic Calendar July 15, 2014
ICSC-Goldman Store Sales at 7:45 a.m.
Retail Sales at 8:30 a.m.
Empire State Manufacturing Survey at 8:30 a.m.
Import and Export Prices at 8:30 a.m.
Redbook at 8:55 a.m.
Business Inventories at 10 a.m.
Federal Reserve Chair Janet Yellen speaks at 10 a.m.
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.