Citigroup, Nokia Report Better Than Expected Results

In spite of the weak housing posts, bleak unemployment numbers, higher foreclosures and still-contracting Philly Fed results, investors gained confidence in the financial system’s recovery after JP Morgan (JPM) reported strong first quarter earnings, which followed stellar numbers from Goldman Sachs (GS) earlier in the week. And banking majors continued their recent good run with Citigroup (C) reporting a first quarter profit this morning. The economic reports that were anything but encouraging failed to halt investors’ increased appetite for risk assumption Thursday, as traders bet on the potential for a economic recovery and pushed technology and consumer shares higher. The tech-heavy Nasdaq climbed 2.7%, bringing its year-to-date advance to 5.9%. The S&P 500 index rose 1.6%, after successfully closing above a key resistance level of 860. The DJIA gained 1.2% with twenty-four of its components heading northward. On the S&P, 405 of its 500 components recorded gains, as all ten sectors rose.

Tech-stocks were leading the sector gains, rising 3.3%, as large-cap companies advanced. Among the DJIA components, Hewlett-Packard (HPQ) topped the list of advancing issues, rising 5%, on reports the firm beat Dell (DELL) as the top US supplier of personal computers for the first time since 2001. Micron Technology (MU) jumped 10.7% after Barclay (BSC) upgraded the stock to “overweight” from “equal weight.” Sun Microsystems (JAVA) shares gained 4.4%, despite reports IBM (IBM) declined its offer to reinitiate merger talks. Nokia (NOK) reported better-than-expected first quarter results, and Google’s (GOOG) results after the session’s close beat estimates.

Weakness in the economy, however, persisted. Housing, which had been signaling some expected signs of bottoming, instead revealed a 10.8% March decline in housing starts to an annualized 510,000, following February’s 17.2% rise. Building permits were down 9% to 513,000, its worst post since record-keeping began in 1960. RealtyTrac revealed foreclosures jumped to 46% in March from the prior year on the end of mortgage firms’ moratorium. Weekly jobless claims showing a 53,000 drop in the top line number to a less-than-expected 610,000; however, continuing claims shot up 172,000 to 6,022,000, their highest since record-keeping began in 1967. And the Philly Fed index of manufacturing activity at -24.4 reflected an ongoing contraction, although it showed a declining pace of the slowing, from -35.0 prior, and the expected -32.0. Today’s University of Michigan sentiment index is projected to show a rise to 58.5 from 57.3, its second consecutive gain, but downside risks may attend the post. Among key Fed speeches, Kansas City Fed President Hoenig speaks at 8:30 AM ET and Fed Chairman Ben Bernanke at 12:30 PM ET.

Subscribe by RSS Subscribe by Email