Market News

July 13, 2010  Tue 7:13 PM CT

The rally showed no signs of letting up today after a rousing start to the earnings season.

The Dow Jones Industrial Average rose 146.75, or 1.44 percent, to 10363.02, while the S&P 500 added 16.59, or 1.54 percent, to 1095.34. The Nasdaq added 43.67, or 1.99 percent, to 2242.03.

Melissa Lee said on CNBC's "Fast Money" show that Intel (INTC) easily beat its earnings estimates, adding that its its CEO called it the best quarter in the company's history.

Tim Seymour said the company nailed the quarter on the top and bottom lines, with a strong response from retail customers.

Guy Adami agreed that Intel had a monster quarter, though he was skeptical whether the company could continue to report such hefty margins. Trading near $22.50 in the after-market, the stock is in no-man's land, he said.

Joe Terranova was impressed with Intel's guidance in the third and fourth quarters. Instead of the customary pullback off earnings, Intel shares should react differently because of the huge short interest in the stock that needs to be unwound, he said. logoKaren Finerman said Intel's report should have a positive spillover to names such as IBM (IBM), Hewlett-Packard (HPQ) and Dell  (DELL). Seymour said the nugget Intel's report is that PC sales haven't peaked.

Brian Kelly called Intel's earnings excellent, especially in the data storage area, where he liked Emulex (ELX). Kelly, who's been bearish on the market, said he had to respect Intel's message--namely, that businesses are spending on technology.

Terranova said money managers, as a result of the strength of Intel's earnings, will have to be in the technology space for the rest of the year.

Kelly said the solid earnings reports from Alcoa (AA), CSX (CSX), and now Intel show how pockets of the economy are doing well.

According to Herb Greenberg, a CNBC senior stocks commentator who was listening in on the Intel's conference call, CEO Paul Otellini said the company's strong numbers were being driven by Internet adoption and a surge in demand for servers.

Finerman and Terranova disagreed on what kind of trading was going on in the markets. Terranova argued that it's a market for stock pickers who are relying on overriding themes, while Finerman said stocks are moving collectively up and down on macro reasons.

Lee noted that Benihana (BNHNA) said after the close of the market that it was exploring strategic alternatives.

Looking at the market overall, Seymour pointed out the Nasdaq is the market to watch in the coming days and the performance of beaten stocks such as Microsoft (MSFT) and Google (GOOG).

INTC ChartOn a cautionary note, Finerman said she bought some puts today on the S&P 500, noting that she needed to act prudently on what has been an "enormous run." Terrranova said it remains to be seen whether the financials, which report their earnings later this week, can pick up the handoff from the companies that reported solid earnings in the last couple of days.

Chris Whalen, an analyst with Institutional Risk Analytics, had a gloomy view of the financials. He said the financials are "flopping up and down" in an economy that is still in a recessionary mode.

He said financials are ratcheting down their growth estimates. He also said investors should expect a high level of chargeoffs well into next year as credit issues continue to weigh on the banks. And he said the first quarter was probably the best quarter for the banks this year. "It's downhill from here."

On a more upbeat note, Expeditors International (EXPD) issued a strong pre-earnings release, in which it raised its second quarter guidance while noting how well its freight business is doing around the globe.

Gary Kaminsky, who has touted the stock in the past, said Expeditors once again demonstrated how it can grow organically in all economic markets.

Joe LaVorgna, an economist for Deutsche Bank, said Intel's report was noteworthy for what it said about an uptick in capital spending and how that might result in improvements for the labor market and retail sales.

LaVorgna said the initial jobless claims report on Thursday will be important because it could lead to a big employment number for July. If that's the case, he said, it's "off to the races."

In a "360-Degree" look at JP Morgan (JPM), the review was mixed. Paul Miller, an analyst with FBR Capital Markets, rated it a "buy," saying the comments of its CEO on financial regulatory reform could drive the stock.

Carter Worth, a chartist with Oppenheimer, was down on the stock, saying it has been performing poorly. Jon "DRJ" Najarian rated it a "buy" based on the recent rise in volatility in the stock.

Shifting to the oil drillers, Lee noted that Diamond Offshore (DO) had moved another rig from the Gulf. Robert MacKenzie, an analyst with FBR Capital Markets, said the administration's latest moratorium will spell trouble for the smaller public and private oil drillers but not the large ones like Diamond that have the resources to shift their rigs to other parts of the globe.

In the" Smash 'Em Up" segment, CNBC media editor Dennis Kneale said Rupert Murdock would be better off breaking up News Corporation (NWS), selling off its print assets, spinning off BskyB in Europe, unloading HarperCollins Publishers and getting rid of MySpace. He said he would hold onto the film operations.

In the final trades, Seymour liked Alcoa. Adami liked Kansas City Southern (KSU). Finerman liked Hewlett-Packard, while Terranova liked Freeport-McMoRan (FCX).

(Editor's note: optionMONSTER and exchange a select number of posts each day as part of a limited content-sharing agreement. Chart courtesy of tradeMONSTER.)

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