Commenting on the jump in stocks of Coca-Cola, Philip Morris, and Lockheed Martin and today’s trading Gorilla Trades strategist Ken Berman said:
While the majority of stocks are trading in the green at midday, the major indices are mixed at midday as the Nasdaq pulled back slightly this morning following yesterday’s strong rally. The European stimulus deal has been all the rage this morning, as after negotiating for almost five full days, the leaders of the European Union (EU) agreed on an $825 billion recovery fund. Even though, the structure of the fund has been tweaked towards loans instead of grants, investors hailed the agreement and risk assets rose across the globe overnight.
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"Surreal doesn't even begin to describe this moment," Seth Klarman noted in his second-quarter letter to the Baupost Group investors. Commenting on the market developments over the past six months, the value investor stated that events, which would typically occur over an extended time frame, had been compressed into just a few months. He noted Read More
Coca-Cola, Philip Morris, and Lockheed Martin's Stock Jump After Earnings
The U.S. financial sector got a huge boost in early trading, with especially Wells Fargo (WFC, +6.4%) pulling its weight, but other large-cap banks also spearheading in the rally. The earnings season continued this morning with the reports of Coca-Cola (KO, +2.4%), Philip Morris (PM, +4.8%), and Lockheed Martin (LMT, +2.1%), among others, and the three giants all published bullish numbers. All three stocks jumped higher at the open, and their sectors were also buoyed by the positive surprise, and IBM (IBM, + 1.1%) staged a post-earnings rally as well, in the face of the pullback in the tech sector.
Dow: 27,002, + 321 or 1.2%
S&P 500: 3,272, + 20 or 0.6%
Nasdaq: 10,730, - 37 or 0.3%
Russell 2000: 1,494, + 26 or 1.8%
Market breadth has been very strong this morning as yesterday’s trends reversed, with advancing issues outnumbering decliners by a 5-to-1 ratio on the NYSE at midday. Only 2 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 196 stocks hit new 52-week highs. The major indices have been hovering around their daily VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to a choppy and mixed afternoon. The EU-deal led to a healthy rally in the energy, financial, and industrial sectors, while defensive issues and tech stocks have been lagging the broader market this morning, but the relative strength of small-caps is an encouraging sign for bulls. Stay tuned!