Filed under: Before the bell, Earnings reports, Deals, General Electric (GE), Wal-Mart (WMT), Costco Wholesale (COST), News Corp’B’ (NWS), Genentech Inc (DNA), Economic data
Futures turned lower this morning after a weaker-than-expected earnings report from General Electric (NYSE: GE). The company said first-quarter earnings fell 8% to 44 cents a share, well below analysts’ expectations of 51 cents. CEO Jeffrey Immelt blamed the disappointing results on declines in financial services earnings, saying breathtaking disruption in the capital markets in March resulted in an inability to complete asset shares.
Stocks rallied yesterday for the first time in three days, spurred by a drop in weekly unemployment claims and some good news from discount retailers Costco Wholesale (NASDAQ: COST) and Wal-Mart (NYSE: WMT). The Dow Jones industrial average rose 54.72 points or 0.44%; the S&P 500 was up 6.06 points or 0.45%; and the Nasdaq Composite, boosted by Takeda Pharmaceuticals’ deal to acquire Millennium Pharmaceuticals, rose 29.58 points or 1.27%.
Genentech (NYSE: DNA) said Q1 net income rose 12% to $790 million, or 74 cents a share, from $706 million, or 66 cents, a year earlier, even though sales of anti-tumor drug Avastin disappointed.
The turmoil in the airline sector continues this day. Frontier Airlines (NASDAQ: FRNT) filed for Chapter 11 bankruptcy, according to Bloomberg News, but said it would continue operating flights. Frontier is the fourth US airline to file for bankruptcy in the last month, amid soaring fuel costs. Meanwhile, Southwest said its fuel costs would be $500 million higher in 2008 than 2007. American Airlines said it would cancel hundreds more flights today, after canceling more than 900 Thursday.
Yahoo! (NASDAQ: YHOO)’s directors will meet today to discuss options. According to the Wall Street Journal, many insiders expect a Microsoft (NASDAQ: MSFT) deal — without News Corp (NYSE: NWS).
Also in the news today, import and export prices for March will be released at 8:30 a.m. EST. Economists predict a 1.8% rise in import prices, which would “underscore the growing risk of inflation,” according to Bloomberg News. The April University of Michigan’s Consumer Sentiment Index is set to be released at 10:00 a.m. Economists expect the index to drop slightly to 69 from 69.5, according to Briefing.com.
The US dollar remained under pressure ahead of the G-7 meeting of the world’s major central bankers and finance ministers in Washington this day. They’re expected to issue a statement at 6:30 p.m. ET.
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