Stock Market News for May 15, 2009

With Wal-Mart reporting its earnings yesterday, an eventful earnings season almost closed its books. Although the performance of companies during the quarter was not as bad as feared, it was not encouraging either. The 455 S&P firms that have reported their earnings so far posted a 35% y/y profit declines.  For the full year, analysts expect a 13% earnings fall among S&P firms to $56.57. Nevertheless, investors once again showed appetite for risk and went bargain hunting.  The S&P registered a 1.5% advance, and the NASDAQ added 1.0%. The DJIA edged 0.6% higher.

Financials were once again the leading gainers, with a 3.5% advance. JP Morgan (NYSE:JPM - Analyst Report) shares jumped 4.4%, Bank of America (NYSE:BAC - Analyst Report) added 2.7%, and Citigroup (NYSE:C - Analyst Report) was up 4.1%. Wells Fargo (NYSE:WFC - Analyst Report), fresh from its $8.6 billion stock sale, jumped 6.2% after Moody's (NYSE:MCO - Analyst Report) raised its ratings on the company’s preferred shares, saying there is an improved likelihood of maintaining the dividend payout. The rating agency put Bank of America (NYSE:BAC - Analyst Report) on review for an upgrade on consideration of its financial strength. Fortress Investment Group (NYSE:FIG - Snapshot Report), however, lost 5.3% after the company said an offering of its 40 million shares was priced at $5 each.  The 3-month LIBOR witnessed its biggest drop in three months, declining to a record low of 0.85%.

On Thursday, basic material shares jumped 2.2% and technology stocks were up 1.5%.  Among material stocks, Dow Chemical (NYSE:DOW - Analyst Report) surged 6.0%, AK Steel (NYSE:AKS - Analyst Report) was up 2.9% and Newmont Mining (NYSE:NEM - Analyst Report) added 1.7%.  CA’s (NYSE:CA - Snapshot Report) better-than-expected results helped technology firms register a 1.5% advance.  Reflecting improved Chinese demand for commodities, such as iron ore, coal and grains, the Baltic Dry Index jumped to its highest level this year.

Consumer spending nevertheless remained a core area of interest as several better-than-expected returns boosted sentiment yesterday, after Wednesday's 0.4% drop in April retail sales disappointed investors.  Although Wal-Mart (NYSE:WMT - Snapshot Report) reported inline earnings, its revenues came in below expectations.  Whole Foods (NASDAQ:WFMI - Snapshot Report) shares, however, added 2.8% after the company’s cost controls measures helped it post better-than-expected earnings. Nike (NYSE:NKE - Analyst Report) announced plans to lay off 1,750 jobs.  Nordstrom (NYSE:JWN - Snapshot Report), up 3.4% Thursday, posted better-than-expected first quarter earnings on inline revenues, and raised its full-year guidance.

Today's consumer price report is expected to have shown no change in April, with a 0.1% increase in core prices. NY Empire Manufacturing data is expected to come in at a negative 15.00.  Industrial production is expected to show a 0.6% m/m drop, with capacity utilization coming in at 68.9% from 69.3% prior.