Earnings Reports Clearing Low Hurdles (BAC) (GOOG) (IBM) (INTC) (LUV) (MS) (MSFT) (UNH) (UNP)

Five Things in the News That Can Affect the Stock Market

Investors would like to accurately predict the stock market to exploit the available profitable economic opportunities. However, various economic trends and extraneous factors affect this perfect strategy as they indicate the success and failure of the stock market.

StocksToTrade Review: A Market Intelligence Tool That Takes the Gamble Out of Stock Trading

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Shell (RDS.A) Resumes Work at Prelude Floating LNG Facility

Royal Dutch Shell plc RDS.A recently confirmed that it resumed activities at Prelude floating liquefied natural gas (LNG) facility offshore Western Australia. The facility remained offline since February due to engineering glitches. This suspension followed an order from Australia's upstream regulator to perform additional work following three safety incidents that took place at the facility between September and January.

Credit Acceptance Gains on Consumer Loans and Active Dealers

Supported by a decent increase in consumer loans along with a rise in dealer enrollments, Credit Acceptance Corporation 's CACC revenues are anticipated to improve in the near term. Moreover, its share buyback policy remains impressive, through which the company is expected to continue enhancing its shareholder value.

Zacks

The overall favorable tone of the day’s news reports, both on the economic as well as earnings fronts, should help stocks maintain their positive momentum of recent days. On the economic front, we got better-than-expected Initial Jobless Claims numbers that reassuringly started going back down after unexpectedly rising last week. The housing number was on the softer side, but the CPI reading shows that inflation remains controlled and is not a problem. Headlines from Europe also remain helpful, with government bond yields continuing their recent downtrend.

The most important number from this morning’s economic data deluge was the 50K drop in weekly Initial Jobless Claims to 352K, taking this key number down to where it stood in April 2008. The four-week average dropped by 3.5K to 379K, maintaining its downtrend of recent weeks.

This key data series has experienced some wild swings in the last two weeks in both directions, likely reflecting seasonal distortions. But if we look beyond the last two weeks, it is unmistakably clear that claims are coming down. Continued favorable momentum on the labor market is the most important fundamental improving factor in the U.S. economy at present, which has the potential to put the recovery on a more sustainable trajectory.

On the earnings front, Bank of America (BAC) missed expectations, but not by a big margin as many had been fearing. Overall, this was a fairly reassuring report by the bank’s standards as it made progress in selling assets to strengthen its capital position and did not come out with big negative surprises in its mortgage business. Morgan Stanley’s (MS) results came ahead of expectations, though results in its institutional securities business that includes investment banking and trading were down significantly from the year-earlier level.

In other earnings news, UnitedHealth (UNH) beat EPS and revenue expectations and it reiterated its earlier 2012 guidance, which is in-line with current expectations. Railroad operator Union Pacific (UNP) came out with a strong EPS surprise on a modest revenue beat. Southwest Airlines (LUV) also came ahead of EPS expectations on in-line revenue numbers.

We have Microsoft (MSFT), Intel (INTC), Google (GOOG) and IBM (IBM) reporting after the close today.

What stands out for me in the current reporting season is the extent of beaten down expectations. It appears that it does not take much to make the market happy with earnings performance this time around.

BANK OF AMER CP (BAC): Free Stock Analysis Report

GOOGLE INC-CL A (GOOG): Free Stock Analysis Report

INTL BUS MACH (IBM): Free Stock Analysis Report

INTEL CORP (INTC): Free Stock Analysis Report

SOUTHWEST AIR (LUV): Free Stock Analysis Report

MORGAN STANLEY (MS): Free Stock Analysis Report

MICROSOFT CORP (MSFT): Free Stock Analysis Report

UNITEDHEALTH GP (UNH): Free Stock Analysis Report

UNION PAC CORP (UNP): Free Stock Analysis Report

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