The market is mixed after getting off to a good start but less than stellar economic news has cooled the enthusiasm. Earnings continue to dominate the headlines but the bulls are having trouble breaking through the upper resistance levels we outlined in the morning update.
The consumer confidence report came in at 50.4 for July which was only slightly below expectations of 51 but down from last month’s reading of 54.3. However, to put things in perspective, the decline follows last month’s nearly 10-point drop, from 62.7 in May. This report takes a pulse of the American consumer on how they feel about the economy, jobs and their outlook and it clearly shows they are still holding back on spending.
Elsewhere, the Standard & Poor’s/Case-Shiller 20-city home price index posted a 1.3% increase in May from April as 19 of 20 cities showed price gains month over month. Of course, this was helped by the federal tax incentives which attracted some buyers into the market but we expect prices to remain flat or down for housing over the next six months.
Turning to earnings, Dupont (DD, $40.52, up $1.53) is up 4% after reporting better-than-expected results. The company said profits came in at $1.2 billion, or $1.26 a share, versus $417 million, or $0.41 a share, in the year-ago period.
Revenue jumped 25% to $8.6 billion while analysts were expecting $8.3 billion/ $0.94 a share. DuPont also raised its 2010 earnings forecast to $2.90-$3.05 a share, up from $2.50-$2.70 and above Wall Street’s expectations of $2.64 a share.
U.S. Steel (X, $45.93, down $2.96) is getting pounded and is down 6% today after reporting a negative numbers for its most recent quarter. Before the open, the company reported a loss of $25 million, or $0.17 a share, versus a loss of $392 million, or $2.92 a share, in the year-ago period. Revenue rose to $4.7 billion from $2.1 billion. Excluding items, U.S. Steel would have earned $0.45 a share but blamed the weakening of the euro against the dollar during the quarter for the miss.
And this just in, Apple (AAPL, $262.69, up $3.41) plans to sell an unlocked iPhone 4 in Canada starting on Friday. The company is moving in Research In Motion’s (RIMM, $53.82, down $1.71) own backyard and plans to allow customers to shop around for a service plan.
As we head to press, the Dow is currently holding a slight gain of 27 points and is at 10,552 while the S&P 500 is up a point to 1,116. The Nasdaq is lower by 4 points and is at 2,292. Upside targets are Dow 10,600; S&P 1,125; and Nasdaq 2,300. To the downside look for Dow 10,400, S&P 1,100; and Nasdaq 2,250.
We will be back in the morning with another full update at 9am. We have updated our current trades as we have one company reporting earnings before the bell on Wednesday. Subscribers, check the Members Area for our latest comments.]]>