Corporate Results Boost Markets
Following the negative impact recent events in Japan have had on markets worldwide, investors have been given a reason for optimism as Wall Street recorded the best month of 2011 and finished last week, and the month of April, on a high note. The Dow Jones industrial average finished at 12,811 representing an increase of 0.4% (47 points) for the day, 2.4% for the week, and 4.3% for the month. The Standard & Poor’s 500 ended the day 0.2% (3 points) higher, with an increase of 2% for the week and 3.3% for the month. The Nasdaq composite rose less than 0.1% (a point) for the day, but clocked up a rise of 1.9% for the week, and 4.2% for the month of April.
Fortune 500 stalwart, Caterpillar (NYSE:CAT), experienced an increased demand for heavy machinery resulting in a boost to its bottom line – and its shares, which closed Friday up 2.5%. Before opening bell on Friday, Chevron Corp (NYSE:CVX) and Merck & Co (NYSE:MRK), both Dow components, reported earnings that exceeded expectations. Higher energy prices were behind Chevron’s positive results, while Merck tripled its profit for the quarter based on strong sales of drugs.
Nasdaq, however, was held back by Research in Motion (NASDAQ:RIMM) shares which dropped by 14% in response to an observation by the manufacturers of BlackBerry that they anticipate a weakening of sales. Also on the tech front, Microsoft (NASDAQ:MSFT) stock dropped 4% on Friday when the positive effects of excellent Office and Kinect sales were outweighed by the 40% drop in Netbook sales.
There will be plenty of action on Wall Street in the week ahead as corporate results continue to trickle in, and market-shifting economic reports are released. Among the more than one hundred companies due to report this week are Pfizer (NYSE:PFE); Kraft Foods (NYSE:KFT); Visa (NYSE:V); MasterCard (NYSE:MA); Colgate Palmolive (NYSA:CL); CBS Corp (NYSE:CBS); and Prudential Financial (NYSE:PRU).
Market related reports include April’s manufacturing index from the Institute for Supply Management, and construction spending data from the Commerce Department, both due on Monday. Monthly auto sales figures will start coming in on Monday as well. Tuesday brings the March factory orders report from the Commerce Department. On Wednesday, investors will start focusing on jobs related information such as the April private sector employment report from ADP, which is considered to be an indicator of what to expect from Thursday and Friday’s jobs reports compiled by the Labor Department.