11 Reasons Markets Retreated from Earnings This Week

Dow 12,341 S&P500 1,319 Nasdaq 2,764 Gold 1,485 Oil 109

Markets pulled back a little this week. Earnings season kicked off on Monday with Alcoa (NYSE:AA) and investors were not thrilled. Oil (NYSE:USO) is still only a few bucks below last week’s 2-year highs and Gold (NYSE:GLD) and Silver (NYSE:SLV) continued breaking new ground.

Now, for the 12 reasons markets moved this week:

Monday

1) Oil (NYSE:USO) prices are starting to push gas to scary levels. As earnings season kicks off, we are particularly concerned about how consumers are reacting to bigger hits at the gas pump. If you believe in buying the dip, Chevron (NYSE:CVX) continues to make 52-week highs after the stock has broken above prices not seen since 2008. Exxon Mobil (NYSE:XOM) and ConocoPhillips (NYSE:COP) have also benefited from the rise in gas prices. Don’t Miss Oil ETFS: The Top 10 Exchange Traded Funds for Your Oil Investing List.

2) The New York Stock Exchange (NYSE:NYX) gave the Nasdaq OMX Group (NASDAQ:NDAQ) and Intercontinental Exchange (NYSE:ICE) the finger. Although the NYX is reportedly getting a better bid from companies on the home front, Deutsche Börse is not sweetening the deal because the NYX has rejected rival bids from NDAQ and ICE. Too bad the Oscars are over, because this deal is going to get dramatic before the dust settles.

3) Earnings season kicked off after the bell. Alcoa (NYSE:AA) beat earnings by a penny, but revenues came in a tad lighter than expected. However, CEO Klaus Kleinfeld offered a positive outlook. The stock was halted after a quick rise, but is now down 3.88% after hours. Don’t Miss our Cheat Sheet to Alcoa’s Earnings! Or, Check Out: Chart of the Day: S&P 500 Quarterly Earnings Recap.

Tuesday

We did not post a market recap because I was traveling. We will resume full coverage next week.

Wednesday

1) Financials (NYSE:XLF) were in focus. JPMorgan Chase (NYSE:JPM) announced so-so earnings, but investor reactions were mixed. Jamie Dimon tried to hold the spotlight with disappointing news about a dividend freeze at JPM, but the Feds waltzed in and sanctioned all the other big name banks for bad mortgage and foreclosure practices. Get more details in our new installment “Investing in Financials: Jamie Dimon Deflates the Party, Feds Slap Mortgage Lenders“.

2) Technology stocks (NASDAQ:QQQ) outperformed. Investors bid up shares of Chinese search engine Baidu (NASDAQ:BIDU) as rumors over a joint venture social network with Facebook continue to spread. Investors also were happy with the taste of Apple (NASDAQ:AAPL) as people start placing bets on how big the retailers new cloud service will be to Apple’s ever-expanding bottom line. In other positive news, Riverbed Technologies (NASDAQ:RVBD) pre-announced positive earnings which added to the lust for everything tech.

3) General Electric (NYSE:GE) said it would pay unpaid US taxes … NOT! In a hilarious prank, the Yes Men issued an official looking press release stating “GE would send its $3.2 billion tax refund from 2010 back to Washington.” This didn’t move markets, but it sure moved a lot of people in GE (NYSE:GE) corporate.

Thursday

1) Financials (NYSE:XLF) got slammed again. Yesterday JPMorgan Chase (NYSE:JPM) announced so-so earnings, but today the selling continued as Goldman Sachs (NYSE:GS) stole the spotlight for prospective perjury as outlined in a new Senate subcommittee report. Makes us wonder whether Lloyd Blankfein is the next Barry Bonds. Apparently investors are worried because Goldman’s stock was down 2.73% today. At least the Bank of Ozark (NASDAQ:OZRK) was up 3% after beating earnings.

2) Investors moved money into silly IPOs like Zipcar (NASDAQ:ZIP). If you made 60% on your money selling your pre-IPO shares at the open this morning, you probably love Zipcar right now. If you tried to buy some anytime after that you’re most likely at a loss because anyone who had shares is locking in gains on the company without a business model. 1999? An IPO with more long term viability was McDonald’s (NYSE:MCD) Latin American franchisee Arcos Dorados Holdings Inc. (ARCO). The stock soared 27%. Finally, shares of shipping company Boxships (TEU) dropped 8.3% on their opening day of public trading.

3) Google (NASDAQ:GOOG) missed earnings! Investors and traders waited all day to hear what Larry Page had to offer during his first earnings release as the new CEO. Net income rose to $2.3 billion, ($7.04 a share) from $1.96 billion ($6.06 a share) year-over-year. Net revenues came in at $6.5 billion, beating analyst expectations for $6.3 billion. However, earnings per share of $8.08 missed Wall Street’s expectation for $8.11 a share. Google is trading down 4.8% after-hours. Now Check Out Wall St. Cheat Sheet’s coverage of Google Earnings.

Friday

1) Econ data renewed investor confidence. Consumer confidence and reasonable Consumer Price Index data came in above Wall Street’s expectations. But if you care about food (NYSE:RJA) and energy (NYSE:XLE) costs, things are still looking bleak for consumers as spring unfolds.

2) Earnings were a mixed bag. Although companies are insanely profitable, quarter-over-quarter comps are getting tougher as the economic recovery continues. Bank of America (NYSE:BAC) and Google (NASDAQ:GOOG) are great examples of how much disappointment might lie ahead this earnings season. Don’t Miss: Here are the Two Reasons Investors Kicked Google Below the Belt.

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