Four days of gains have brought the S&P 500 up 6.59% this week to price levels that are testing 2009 highs. Stocks may look to continue this trend after better than expected earnings releases this morning. Following positive reports earlier in the week from Goldman Sachs and JP Morgan, Bank of America announced that they profited $3.4 billion, or 72 cents a share, in Q2, against expectations that it would gain just 28 cents per share.
Earnings from General Electric were also better than predicted, those revenue fell more than anticipated. GE earned $2.9 billion, or 26 cents a share, in Q2, a drop of 47% since Q2 2008, but higher than the median forecast of 23 cents per share. Revenue declined 17% to $39.1 billion, lower than forecasts for $42.2 billion.
Just a few minutes ago, Citigroup said its Q2 profits were bolstered by the sale of Smith Barney. The bank’s quarterly profits were $4.3 billion, or 49 cents per share ― quite a contrast to expectations that shares would lose 34 cents.
And if earnings reports aren’t enough, markets may receive consolation from the words of Nouriel Roubini, the professor at NYC’s Stern school otherwise known as Dr. Doom. Speaking at a conference yesterday, Roubini said “the free fall of the economy has stopped” and “the economy is still contracting but slowly.”
With the only data on the docket, Housing Starts, already behind us, markets will now use the remained of the session to adjust their trading positions ahead of the weekend. There is however one other event on today’s calendar, at 11 AM the House Financial Services Committee will hold a hearing to discuss the Obama Adminstration’s Financial Regulatory Reform Proposals.
Of particular note today is options expiration day in equities, which implies some choppy trading may lie ahead.