US market climbs on upbeat corporate earning Pre-Market Open Commentary for 24 April 2013 ( CO. REG. NO. 199904258C ) DJIA: 14719.46 +152.29 Nasdaq Composite: 3269.33 +35.78 Good morning, fellow investors US market took a nosedive in midday trading following a false Twitter post of explosions in the White House but finished a volatile Tuesday on a strong note on upbeat earnings and positive reading on the housing market. All the three major indices gained more than 1%. Chemical maker DuPont reported stronger than expected first-quarter results than exceeded expectations on profit and although the firm missed on revenue estimates, market was encouraged by its strong forward growth outlook for seeds and pesticides which reinforced its shift into food and agriculture and away from paint pigments. Du Point’s share rose 4.1%. United Technologies also reported stronger than expected first-quarter profits but missed on revenue expectations, partly undermined by a weak European market and soft commercial aerospace and defense sales which dragged the share price 0.8% lower. Sentiment was also boosted after Netflix announced a strong set of 1QFY13 results with earnings per share of 5 UScts compared to losses of 8 UScents in 1QFY12 on the back of revenue growth of 17.3% to US$1.02bil, a sign that the original “House of Cards” video series is paying off. Netflix shares surged 24.4%. After market closed, Apple reported stronger than expected earnings and increased the amount of cash it will return to shareholders. However, its outlook fell short of expectations with 3QFY!3 revenue forecast of between US$33.5 bil and US$35.5 bil, against expectations of US$38.25 bil and gross margin are expected to continue to slide to between 36% and 37% on the back of lower revenue and a different product mix. Market welcomed Apple’s move to return excess capital to shareholders and in 2QFY13, the firm has increased its dividend by 15% to US$3.05 a share and will expand its share repurchase program to US$60 bil from the US$10 bil level that was announced last year. Apple’s share price surged 5% initially in after-hours trading but closed with a 0.5% dip. Also lifting sentiment was a positive housing market reading which signaled that the housing market recovery remained on track. New home sales rose 1.5% in March to a seasonally adjusted annual rate of 417,000 units following a 7.6% drop in Feburary. All the three major US indices surged with the Dow Jones Industrial Average gaining 1.05% while the S&P 500 rose 1.04% to 1578.78. The Nasdaq Composite index climbed 1.11%. Market will take leads from results of major corporate including Sprint Nextel, Qualcomm and Zynga as well as durable goods order report on Wednesday. Crude oil for June delivery dipped US$0.01 a barrel, or 0.01%, to settle at US$89.18 a barrel. In Singapore today: Asian stock markets finished lower, led by sharp losses from the Shanghai Composite index (which closed 2.6% lower) after a preliminary survey of factory managers showed that expansion of China’s factory activity eased in April, renewing fears of a slowdown in the world's second largest economy. The flash HSBC Purchasing Managers' Index for April fell to 50.5 from 51.6 in March but was still stronger than the reading of 50.4 in February. Tracking regional losses, Singapore shares traded lower with the STI index extending early session losses in the afternoon to close 24.57 points, or 0.74%, lower at 3284.35. For every share that rose, 2.1 fell. Turnover was thin with 1.8 bil shares with a value of $1.3 bil traded. Expect the local bourse to advance following strong positive leads from Wall Street and European markets on the back of strong corporate profitability. |