A late, Dow-led rally leaves all major indexes in the green
Tuesday, following a mixed session earlier in the day. With Tuesday's
close, a stock winning streak stretched to six days for the Dow
industrials and 10 days for the Nasdaq Composite Index. So far,
earnings results have given bulls the upper hand but some investors
caution that some consolidation may be on tap before the market can go
much higher.
Stocks gave up an early lead when a fresh bankruptcy warning
emerged from small business lender CIT Group (
) and clouded what had
been mostly upbeat earnings results last night and today.
Blue-chips were the last to join a mid-day decline after opening
higher on results from industrial bellwether Caterpillar (
). The
tech-heavy Nasdaq dipped deeper into negative territory despite a solid
earnings report and strong guidance from Texas Instruments (
) on
Monday night.
Federal Reserve Chairman Ben Bernanke told Congress rates would
likely stay low for a while and that he sees some tenative signs of
economic stabilization. Those comments had limited effect on the
markets as Bernanke has detailed some of his outlook in a WSJ Op-Ed,
but more testimony is ahead on Wednesday.
The Fed boss sought to assure investors and Congress that the
Central Bank will be able to reel in its extraordinary economic
stimulus and prevent a flare up of inflation once a recovery is firmly
rooted. Still, any such steps will be far off in the future. The
central bank's focus remains "fostering economic recovery," he said,
according to an Associated Press report.
Caterpillar, a main driver of the Dow, reported Q2 EPS of $0.60 vs
$1.14 a year earlier. Excluding redundancy costs, profit was $0.72 per
share. The Thomson Reuters mean analyst estimate was for $0.22 per
share. Sales and revenues of $7.975 billion were down 41% from $13.624
billion in Q2 2008. The Stret looked for $8.86 billion.
The company is updating its outlook for 2009 by tightening the
sales and revenues range and improving profit expectations. For sales
and revenues, the range has been tightened to $32 billion to $36
billion. The 2009 profit outlook is a range of $0.40 to $1.50 per share
including redundancy costs of about $0.75 per share.
