Media Quotes

Adam Sarhan Reuters Quote: US STOCKS-Wall St set to open higher for second day on profits


Tue Oct 16, 2012 9:12am EDT

* Johnson & Johnson, UnitedHealth Group raise profit views
* Goldman reports stronger-than-expected profit
* Citigroup CEO Pandit unexpectedly resigns, shares fall
* Futures up: Dow 58 pts, S&P 6.5 pts, Nasdaq 12.75 pts
By Ryan Vlastelica
NEW YORK, Oct 16 (Reuters) – U.S. stock index futures pointed to a higher open on Tuesday after the latest quarterly earnings and outlooks posted by Goldman Sachs, Coca-Cola and other major companies outweighed investor fears about the sluggish global economy.
Johnson & Johnson and UnitedHealth Group, both Dow components, raised their full-year profit views while Goldman Sachs boosted its dividend. J&J rose 1 percent to $69.26 while UnitedHealth was up 2.1 percent at $58.70 in premarket trading.
Goldman shares oscillated between gains and losses in premarket trading after posting earnings that beat expectations and revenue that more than doubled. Shares were up modestly before the bell.
Coca-Cola Co also reported a rise in earnings and revenue, though profits were pressured by foreign exchange rates. The stock rose 0.3 percent in premarket trading.
“Not only have the Dow components done very well today, but Goldman is extremely positive,” said Adam Sarhan, chief executive officer at Sarhan Capital in New York. “That a financial is able to have results like that in this kind of low-growth environment bodes well for the economy as a whole.”
Citigroup tumbled 3.1 percent after the company said in a surprise announcement that Chief Executive Vikram Pandit had resigned effective immediately, along with Chief Operating Officer John Havens. Michael Corbat, previously chief executive for Europe, Middle East and Africa, was named to succeed Pandit.
Citigroup Inc had rallied after its results on Monday, helping to calm concerns about financial shares.
“Pandit is leaving at the top of the game and leaving the company in great hands, but the timing of the move is shocking,” Sarhan said. “Why they didn’t announce it with the earnings is a question that needs to be answered.”
S&P 500 futures rose 6.5 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 58 points and Nasdaq 100 futures rose 12.75 points.
The quarterly earnings season thus far has been mixed, with some early pessimistic results giving the S&P 500 its worst week since June last week. However, Citigroup’s results helped spark a rally on Monday.
Profits of S&P 500 companies are seen dropping 2.3 percent this quarter from a year ago, according to Thomson Reuters data. With about 8 percent of S&P companies having reported, 58 percent have topped profit expectations – less than the average beat rate of 67 percent for the past four quarters.
Intel and IBM report after the market closes and are among the first major earnings reports of the tech sector, which has been marked by a number of profit warnings, including from Intel. Late Monday, Microchip Technology Inc said second-quarter revenue was likely to be below its earlier estimates due to soft demand.
U.S. consumer prices rose 0.6 percent in September as the cost of gasoline surged, posing a threat to consumer spending power. However, futures were little influenced by the CPI data.
While earnings have been the primary driver for equities in recent sessions, overshadowing some strong economic indicators, investors will keep an eye on the meeting of European leaders later this week. European shares rose 0.5 percent on growing hopes the meeting would advance plans to tackle debt problems in Spain and Greece.
U.S. stocks climbed on Monday, rebounding from last week’s losses, after Citigroup’s earnings and U.S. retail sales exceeded expectations.