Discuss Market Comments 07/22/11

Testing the upper range - Another nice rally on Wall Street yesterday, after the one day pause on Wednesday. The Dow jumped 152.5 points; Its second triple digit gain of the week despite being less than two-weeks from a possible U.S. default. The market seems to always keep us guessing...

Current Daily Market Commentary

Market Commentary for 7/22/11

 

[jkenjohnson]

My rant for the day - AMD is up 9% (pre-market) because their earnings beat analyst's estimates by a penny. The prediction was 8 cents per share, but actual earnings were 9 cents per share. What the ????? Wow, earnings were up by a penny, let's drive the stock up 9%. I don't understand the stock market at all.

 

[tsptalk]

Earnings (and guidance) are everything to a stock. An .08 estimate that is beat by a penny is a 12.5% beat . The stock (starting at $6 and change) is justified in being up 12.5%. If it missed by a penny (.07 vs. .08) the stock is justified being down by 14%.

It would be the same if the $65 stock has a 0.80 estimate and came in at 0.90. That stock would easily trade over $70.

I don't trade on fundamentals, but it's actually refreshing to see a stock move with earnings. It would be easier to do research.

You probably didn't really want to hear that.

 

[jkenjohnson]

Alcoa recently beat their anticipated earnings and my shares went down in value?

 

[tsptalk]

Alcoa actually just met estimates after beating the year before in the 2nd qtr. so it was a little bit of a disappointment.

On 7/11/2011, AA reported 2 quarter 2011 earnings of $0.32 per share. This result was in-line with the consensus of the 14 analysts following the company and beat last year's 2 quarter results by $0.19.

And I just checked and it says that AMD only met estimates so I don't know why the pop. They must have had some optimistic BS in their announcement.