U.S. stocks and exchange traded funds (ETFs) followed overseas markets by opening in positive territory this morning as investors looked to ignite a new rally on new unemployment data and quarterly earnings reports.
The Labor Department reported that new claims for unemployment insurance increased by 25,000 to a seasonally adjusted 584,000, higher than the 570,000 expected by analysts. But on a positive note, the same report indicated that the number of Americans receiving unemployment benefits fell to 6.2 million from 6.23 million last week. Analysts anticipated an increase to 6.3 million.
As for earnings reports, they were lead by the world’s largest publicly traded oil company, Exxon Mobil (XOM), which witnessed a 66% drop in profits. The company reported second-quarter earnings of $0.81/share and fell short of Wall Street’s expectation of $1.02/share. Despite this news, the Energy Select SPDR (XLE) gained 1.2% in morning trading; XOM is 22.9%.
- Colgate-Palmolive (CL) stated that its cost-cutting measures overshadowed a weaker U.S. dollar and consumer spending sentiment and reported an increase in its quarterly earnings. The toothpaste maker reported profits of $1.07/share beating analysts’ expectations of $1.05/share.
- Electronics company Motorola (MOT) impressed both itself and Wall Street when it reported earnings of $0.01/share. This profit was primarily driven by scaling back on costs and slashing of jobs.
- Chemical giant Dow Chemical (DOW) kept the ball rolling by reporting quarterly earnings of $0.05/share and beating Wall Street’s expectations of a loss of $0.08/share.
- Although enrollment fell at health insurer Cigna Corp. (CI), the Philadelphia-based company reported an increase in earnings of 60% on a more favorable interest rate, or $1.58/share as compared to the $0.96/share forecast by analysts.
In other news, bond prices fell as investors moved out of safer investments and into stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.71% from 3.67% late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.18% from 0.17% late Wednesday. The iShares Lehman 7-10 Yr Treasury (IEF) was down 0.1% in morning trading.