Market Happenings for Thursday, April 19, 2012

Pre-market, the futures are up a bit but near flat. Gainers this morning include GILD, EBAY, FFIV, SLM and MS while losers include QCOM, SWK, XRAY, EMC and PCAR.

The Market

This morning Bank of America (BAC) reported that its quarterly net income had declined sharply versus last year, though this drop came after an accounting adjustment of nearly $5 billion. After factoring out non-operating expenses, the company’s earnings more than doubled from a year ago, and shares rose 3% in early trading. Bank of America posted 3 cents of EPS, versus analysts’ expectations for 12 cents. Revenue of $22.28 billion missed expectations for $22.51 billion.

Morgan Stanley (MS) reported a 6-cent loss, but would have earned 71 cents per share without accounting for changes in the value of its debt. Analysts had been expecting the bank to post 44 cents of EPS. Revenue of $8.91 billion (excluding DVA) compared to expectations for $7.31 billion.

Overall, corporate earnings this quarter have come in better than expected. Of the 77 companies in the S&P 500 that had reported their quarterly results as of Wednesday evening, 63 beat expectations, while eight matched and only six have missed.

European stocks were mixed in afternoon trading and Asian markets ended mixed.

The national average price of gasoline fell 8-tenths of cent to $3.891 per gallon.

Earnings Reports

Earnings reports (sorted by mkt cap): MSFT-Microsoft (consensus $0.57), PM-Phillip Morris International (1.19), VZ-Verizon Communications (0.57), BAC-Bank of America (0.12), UNH-UnitedHealth Group (1.18), EMC-EMC Corp. (0.36), UNP-Union Pacific (1.63), DD-EI du Pont de Nemours (1.53), DHR-Danaher (0.71), FCX-Freeport-McMoRan Copper & Gold (0.87), MS-Morgan Stanley (0.40), COF-Capital One Financial (1.38), BAX-Baxter International (1.00), TRV-Travelers Cos. (1.52), BBT-BB&T Corp. (0.58).

Financial Calendar

0830 ET Weekly initial unemployment claims expected -10,000 to 370,000, previous +13,000 to 380,000. Weekly continuing claims expected +49,000 to 3.300 million, previous -98,000 to 3,251 million.

1000 ET Mar existing home sales expected +0.7% to 4.62 million, Feb -0.9% to 4.59 million.

1000 ET Mar leading indicators expected +0.2%, Feb +0.7%.

1000 ET Apr Philadelphia Fed manufacturing index expected -0.5 to 12.0, Mar +2.3 to 12.5.

1100 ET Treasury announces amounts of 2-year T-notes (previous $35 billion), 5-year T-notes (previous $35 billion) and 7-year T-notes (previous $29 billion) to be auctioned Apr 24-26.

1300 ET Treasury auctions 5-year TIPS.

1630 ET Weekly money supply report and Fed balance sheet.

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