Wall Street Extends Its Rally Ahead of Fortune 500 Results
Friday saw Wall Street sustaining its now six-week long rally, ending the week with a meager advance, but an advance nonetheless. Earlier in the week both JPMorgan Chase and Goldman Sachs had reported positive first quarter results, and investor confidence in the financial sector was further boosted as Citigroup posted better than expected results, adding weight to the speculation that things may be bottoming out. The three Fortune 500 companies reported results that, although being lower than the same time last year, topped all estimates. As is the case with Goldman Sachs, JPMorgan Chase has indicated that it would be looking at repaying TARP funds “as soon as possible”.
The next two weeks are likely to generate a flurry of activity among investors as top Fortune 500 companies release their first quarter results. The growing optimism appears to be creating an air of excitement and anticipation, with many investors jumping back into the market they had viewed with skepticism and trepidation not too long ago. Among the influential Fortune 500 companies expected to post first quarter results during the next few days are Bank of America, American Express, Microsoft, Yahoo, IBM, Apple, Eli Lily, Texas Instruments, and Halliburton.
The annual Fortune 500, compiled and published by the well-respected Fortune magazine, lists the top 500 companies in the United States according to their gross revenue, excluding the impact of excise taxes collected by the companies. The Fortune 500 includes both publicly and privately-held companies that make their revenues available to the public. U.S. retail giant Wal-Mart, which has held the top spot for six of the past seven years, dropped to second place on the Fortune 500 list released yesterday, with Exxon Mobil taking the top spot with $442.9 billion in revenue and earnings of $45.2 billion. However, overall earnings for companies listed on the Fortune 500 dropped by a dramatic 85 percent, from $645 billion in 2007 to $98.9 billion in 2008, underscoring just how serious the financial crisis really is and how it is affecting all sectors of the economy. This is the biggest one year decline in the 55 year history of the Fortune 500. Fortune magazine also publishes the highest ranking 100 firms on their Fortune 100 list, as well as the broader ranking Fortune 1000, all of which investors will no doubt be examining with great interest.