U.S. stocks are roughly unchanged this morning, with the S&P 500 (^GSPC 0.02%) and the narrower, price-weighted Dow Jones Industrial Average (^DJI -0.11%) down 0.11% and 0.7%, respectively, as of 10 a.m. EDT. The S&P 500 is shooting for its ninth consecutive "up" day; if it succeeds, it will mark the longest winning streak achieved since November 2004.
Hewlett-Packard's board gets some new blood
Dow component Hewlett-Packard (HPQ 1.55%) has just added former Microsoft technologist Ray Ozzie to its board of directors. On the one hand, Ozzie brings exceptional knowledge and experience of the technology industry to HP's board: He founded two software companies that were ultimately bought by industry heavyweights and inherited the role of "chief software architect" at Microsoft from Bill Gates himself. While such expertise is welcome, the real problem with HP's board is that it is rudderless. Meanwhile, Ozzie seems to me too independent and intellectual to fill the leadership gap.
Another bank, another beat
In the wake of the earnings beats by Wells Fargo, JPMorgan, and Citi, Goldman Sachs (GS -0.23%) is the latest among the too-big-to-fail set to top expectations. In fact, Goldman blew past the $2.82 consensus earnings-per-share estimate in the second quarter, earning $3.70.
Before we start handing out high-fives, let's keep that performance in perspective. Goldman is doing a decent job at keeping its personnel costs in check: Compensation and benefits eat up 43% of revenue, which is consistent with the first quarter. Nevertheless, this remains an organization run for its employees, not its shareholders. Indeed, for all its vaunted profitability, it's a thin stream of profit that trickles down to the latter group. Goldman's annualized return on average common shareholders' equity was just 10.5% in the second quarter. That's hardly the sort of number that makes investors salivate. In fact, analysts reckon it's barely above the bank's 10% cost of capital.
Besides, with the civil trial of former Goldman banker Fabrice Tourre having started yesterday, Goldman has more pressing concerns regarding another, highly prized form of capital: reputational capital.
