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| Currency | US Dollar |
|---|---|
| British Pound to US Dollar | 1.984915 |
| Euro to US Dollar | 1.570845 |
| Japanese Yen to US Dollar | 0.009365 |
| Canadian Dollar to US Dollar | 0.981065 |
Shares of Microsoft (MSFT, news, msgs) tumbled in after-hours trading today as quarterly earnings and future guidance disappointed investors.
At the same time, the company said again it would not boost its $31-a-share bid for Internet company Yahoo (YHOO, news, msgs).
Microsoft shares fell 5% to $30.20 from a regular Nasdaq close of $31.80. The company, which is the publisher of MSN Money, reported earnings of 47 cents a share for its fiscal third quarter, 3 cents ahead of analyst estimates.
But revenue was $14.45 billion, marginally ahead of $14.4 billion a year ago, which included $1.7 billion that had been deferred from the second quarter of fiscal 2007 because of delays in the launch of the Windows Vista operating system.
Net income was $4.4 billion in the latest quarter, down 11% from a year ago's Vista-boosted results.
At the same time, net income included a $1.4 billion charge for an antitrust fine from the European Commission.
The disappointment came from the company's forecast for its fiscal-fourth quarter: revenue of $15.5 to $15.8 billion and earnings of 45 to 48 cents. The consensus Wall Street earnings estimate is 48 cents on revenue of $15.6 billion, in line with the consensus Wall Street estimate. In fiscal 2007's fourth quarter, Microsoft earned 31 cents on revenue of $13.4 billion.
The company sees fiscal 2009 earnings rising 13% to 18% because of continued strength from its main software businesses.
Microsoft's earnings came after the Dow Jones industrials closed up 86 points, or 0.7%, to 12,849. While the rally made many investors happy, the Dow had been up as much as 179 points at 2:30 p.m. The Standard & Poor's 500 Index was up 9 points, or 0.7%, to 1,389, and the Nasdaq Composite Index was up 24 points, or 1%, to 2,429.
The company did say it could launch a hostile takeover bid for Yahoo.
"Speed is of the essence" in making a merger work, Chief Financial Officer Chris Liddell said during a call with analysts, but he said Yahoo's management had "unrealistic expectations" of value.
If Yahoo doesn't start to negotiate by the weekend, he said -- as has CEO Steve Ballmer -- Microsoft may start a hostile takeover bid offering a lower price. But he also said Microsoft may choose to walk away from the $31-a-share cash-and-stock offer, originally valued at $44.2 billion.
Investors seemed to be taking Liddell and Ballmer seriously. Yahoo shares were down 2.8% today to $27.30 in regular Nasdaq trading and off an additional 1% to $27.03 in after-hours trading.
Lower crude, higher dollar fuel rally
The stock market's rally today was mostly the result of falling crude oil and a rising dollar.A surprise drop in jobless claims this week also helped the market.
Crude oil closed down $2.24 a barrel to $116.06 today. The price drop pushed energy shares lower. The Amex Oil Index ($XOI.X) was off 1.9% to 1,474, and the Philadelphia Oil Service Sector Index ($OSX.X) fell 1.5% to 319. Oil giants ExxonMobil (XOM, news, msgs) and Chevron (CVX, news, msgs) were the worst performers among the 30 Dow stocks, falling 1.7% to $92.60 and 2.1% to $92.40, respectively.
But the beleaguered airlines moved higher; the Amex Airlines Index($XAL.X) jumped 5.9% to 21.18. UAL (UAUA, news, msgs) was up 10.4% to $15.40 after announcing it's raising domestic fares 3% to 5% to cope with higher fuel costs.
- Video: Oil at $225 by 2012?
Oil's fall was driven in part by a dollar that was pushing higher after a report in The Wall Street Journal that the Federal Reserve may pause its rate-cutting campaign. Right now, the betting is that the Fed will cut its federal funds rate, now at 2.5%, to 2.25% next week.
The dollar was up 1.5% against the euro this afternoon, 0.4% against the British pound and 1% against the yen.
The dollar's gain knocked gold down $19.60 an ounce, or 2.2% to $889.40. Copper fell 0.7% to $3.875 a pound. Corn was down 2% to $5.763 a bushel.
American International Group (AIG, news, msgs) was the Dow leader today with a 7.1% gain to $46.97. Financial stocks were the leading market sector after Merrill Lynch (MER, news, msgs) said it would maintain its dividend at 35 cents a share. Merrill Lynch was up 7.1% to $48.09. It rose an additional 0.5% to $48.35 in after-hours trading.
General Motors (GM, news, msgs) was the second-best Dow performer, up 5.6% to $22.11, after Ford Motor (F, news, msgs) surprised Wall Street with a first-quarter profit. Ford was up 12% to $8.41 and was the second-best performer among S&P 500 stocks.
Chip maker LSI Corp. (LSI, news, msgs) was the top S&P 500 stock, up 21% to $5.98 after first-quarter revenue and a forecast for the current period topped analysts' estimates. The Philadelphia Semiconductor Index($SOX.X) was up 1.6% to 392.
| Thur. | Wed. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Crude oil (NYMEX) (per barrel) | $116.06 | $118.30 | -$2.24 | 14.25% | 20.92% |
| Heating oil (per gallon) | $3.2583 | $3.3250 | -$0.0667 | 6.86% | 22.98% |
| Natural gas (per million BTU) | $10.7900 | $10.7810 | $0.0090 | 6.82% | 44.19% |
| Unleaded gasoline (per gallon) | $3.0186 | $3.0507 | -$0.0321 | 15.38% | 21.19% |
American Express beats estimates
Dow component American Express (AXP, news, msgs) said it earned 84 cents a share in the first quarter, 3 cents better than analyst estimates. Revenue was up 10.8% to $7.2 billion, in line with analyst estimates. Net income was down 6% to $991The company reaffirmed 2008 guidance with earnings growing 4% to 6% to $3.53 to $3.59 a share. The Wall Street consensus is $3.34 a share.
Shares were up 4.5% in after-hours trading to $47.23 from a regular close of $45.18.
Meanwhile, Altria Group (MO, news, msgs) said first quarter profit dropped 11% on charges and a decline in sales of cigarette and other tobacco products. Shares were down 1.8% in after-hours trading to $22.12 from a regular close of $22.53.
The cigarette maker said today net income fell to $2.45 billion, or $1.16 a share, from $2.75 billion, or $1.30 a share, a year ago.
The Richmond, Va.-based company earned 37 cents per share excluding one-time charges and results from its recently spun-off international division.
Investors snap up Apple shares
Apple (AAPL, news, msgs) shares were up 3.7% to $168.94 on the day after Wall Street embraced its second-quarter earnings.Late Wednesday, the tech giant said it earned $1.05 billion, or $1.16 per share, in its fiscal second quarter, a 36% increase from the $770 million, or 87 cents per share, the company earned in the same period last year.
Results topped analysts' expectations by 10 cents.
Apple said revenue jumped nearly 43%, to $7.51 billion, topping The Street's estimate of $6.9 billion. "We're seeing this Mac resurgence because of the sex appeal of the brand," said Barry Jaruzelski, a technology analyst at Booz Allen Hamilton, to Bloomberg News. "The MacBook Air is novel enough that it brings people into the Apple store, even if they're not in the market for it."
Apple sold 2.29 million Macintosh computers during the quarter, and 1.7 million iPhones. But Apple said it sold 10.6 million iPods, an increase of only 1% from a year ago.
Some analysts expressed concern after the company gave a weak forecast for the current quarter.
Apple Chief Financial Officer Peter Oppenheimer said fiscal-third-quarter earnings would be $1 per share on $7.2 billion in revenue; the consensus estimate is $1.09 per share on $7.35 billion in sales.
"It looks like the third-quarter-earnings view is a little below The Street. With the stock up 41% since the February low, it is going to take a lot of good news to propel the stock higher," said Oak Associates portfolio manager Robert Stimpson to Reuters.
Analysts also were disappointed by the company's gross margin, which narrowed to 32.9% and missed expectations of 35.8%. Gross margin is the percentage of sales revenue remaining after production costs.
Jobless claims decline; new-home sales fall
Worries about the economy and the consumer slowdown have been hitting companies' earnings results, but today there was some good news on the jobs front.For the week ending April 19, initial jobless claims fell by 33,000 to 342,000, the Labor Department reported. It was the lowest level since Feb. 16. Economists had expected claims to rise by 3,000 to 375,000.
The housing market is still struggling, however.
The Commerce Department this morning said new-home sales fell 8.5% in March to a annualized rate of 526,000 -- a 17-year low. The decline was worse than economists had expected.
Year over year, new-home sales are down 36.6%.
The median price of a new home fell 13.3% last month to $227,600, and the supply of homes for sale increased to 11 months' worth of inventory, the highest since September 1981.
Slowing economy slams Starbucks
Starbucks (SBUX, news, msgs) was the second-worst performing S&P 500 stock today, falling 10.4% to $15.99 today after warning late Wednesday that its fiscal-second-quarter results would be lower than expected."The current economic environment is the weakest in our company's history, marked by lower home values and rising costs for energy, food and other products that are directly impacting our customers," said CEO Howard Schultz in a press release.
- Video: Food producer pinch
Starbucks said earnings would be 15 cents per share, 4 cents lower than a previous forecast and lower than The Street's estimate of 21 cents per share.
Stock Charts (Year)
Starbucks
Motorola
The company will give a three-year outlook on Wednesday.
Newell Rubbermaid (NWL, news, msgs) was the worst S&P 500 performer today, falling 10.6% to $21.19 after the consumer products maker cut its full-year outlook on higher costs.
Ford's earnings rev up
Ford shares took off when the company surprised investors with a stronger-than-expected quarter.Ford said it earned $100 million, or a nickel per share, up from a net loss of $282 million, or 15 cents per share, in the same period a year ago, suggesting that CEO Alan Mulally's turnaround plan is working. Analysts had expected a loss of 15 cents per share. Profit from continuing operations came in at $525 million, or 20 cents per share.
Revenue fell 8% to $39.4 billion, but "there are signs of progress that Ford just may, in fact, be fixable," said Lehman Bros. analyst Brian Johnson to Bloomberg. Mulally's plan has Ford becoming profitable in 2009. The automaker has eliminated 46,300 jobs in North America since 2006.
Motorola's loss widens
Things at Motorola (MOT, news, msgs) just got worse.The troubled company this morning reported a first-quarter loss of $194 million, or 9 cents per share, worse than the loss of $181 million, or 8 cents per share, in the first quarter of 2007. Analysts had been looking for a loss of 7 cents per share.
Shares fell 2.5% to $9.25 on the news.
More from MSN Money
Last month, after pressure from shareholders, including billionaire investor Carl Icahn, Motorola said it would spin off its handset business. Loss of market share and disappointing results forced Ed Zander to step down as CEO in November.
| Thur. | Wed. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Treasurys | |||||
| 13-week Treasury bill | 1.220% | 1.200% | 0.020 | -9.63% | -61.15% |
| 5-year Treasury note yield | 3.104% | 2.955% | 0.149 | 22.45% | -10.16% |
| 10-year Treasury note yield | 3.827% | 3.730% | 0.097 | 10.42% | -5.15% |
| 30-year Treasury bond yield | 4.544% | 4.485% | 0.059 | 4.58% | 1.91% |
| Currencies | |||||
| U.S. Dollar Index | 72.775 | 72.050 | 0.725 | 0.85% | -5.11% |
| British pound in dollars | $1.9736 | $1.9728 | 0.0008 | -0.51% | -0.79% |
| Dollar in British pounds | £0.5067 | £0.5069 | -0.0002 | 0.52% | 0.80% |
| Euro in dollars | 1.5699 | 1.5689 | 0.0010 | -0.33% | 7.41% |
| Dollar in euros | € 0.6370 | € 0.6374 | -0.0004 | 0.33% | -6.90% |
| Dollar in yen | 104.24 | 104.31 | -0.07 | 4.44% | -6.80% |
| Canadian dollar in U.S. dollars | $0.986 | $0.986 | -$0.0001 | 0.88% | -0.67% |
| U.S. dollar in Canadian dollars | $1.015 | $1.015 | $0.0002 | -0.87% | 0.69% |
| Commodities | |||||
| Gold | $889.40 | $909.00 | -$19.60 | -4.06% | 6.13% |
| Copper | $3.8750 | $3.9005 | -$0.03 | -1.76% | 27.43% |
| Silver | $16.7680 | $17.2760 | -$0.51 | -5.21% | 12.39% |
| Corn | $5.7625 | $5.8775 | -$0.12 | 1.59% | 26.51% |
| Crude oil (NYMEX) (per barrel) | $116.06 | $118.30 | -$2.24 | 5.37% | 20.92% |
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