Stock Market Opening Report: July 20, 2012

(By Rich Bieglmieir) With no scheduled news to stand in the way on Friday, the trend should remain friendly. The Dow and S&P are flirting with three month highs, while the NASDAQ has some catching up to do.
 
It is momentum and decent earnings that are taking stocks higher as every major economic announcement on Thursday disappointed. Jobless claims were 20,000 higher than anticipated; existing home sales fell when the street predicted gains, and the Philly Fed made it three for three messy results.
 
The hope of Fed intervention builds with each passing dreary economic report as the days on the calendar flip closer to the FOMC meeting on July 31 and August 1. Remember, anticipation of the central bank's plans accounts for nearly 4% of annual stock market returns since 1994.
 
Goldman Sachs says not to expect more Wall Street welfare from Bennie and the Inkjets until September's get together, but if the employment number really sucks on August 1, the timeline could get pushed up.  
 
Unless some unwelcomed news crashes the party without an invitation, stocks should close the week on a high note.
 
As for earnings, it has been so far so good for the second quarter. With roughly 10% of the report cards in, sales are up 3.67% compared to the same quarter in 2011, operating profits adding 5.08% year-over-year, and as reported earnings have accelerated by 8.23%.
 
If the pace can keep it up for the next six weeks, then Wall Street will have good reason to keep on buying; however, we suspect the race will slow somewhat in the weeks ahead.
 
At the moment, technical and earnings are working, favorably, against a backdrop of poor economic results, while EU drama has all but disappeared – problem solved?
 
Have a great weekend, and we will see you next week.