Visa, Intel Power the Dow's Jump

Citigroup's stock bounces after company earnings top analyst expectations despite big revenue declines in mortgage lending and bond trading.

Apr 14, 2014 at 2:30PM
Daily Fool

After its recent slide, the market has kicked things up a notch today, with the Dow Jones Industrial Average (DJINDICES:^DJI) posting a 84-point jump as of 2:30 p.m. EDT. Led by Visa (NYSE:V) all but 10 of the blue-chip index's member stocks are in the green. Intel (NASDAQ:INTC) is also up big ahead of the chipmaker's earnings report tomorrow, while strong results have given Citigroup (NYSE:C) a lift today outside of the Dow. Let's catch up on what you need to know.

Visa set for an outperform?
Visa's stock has jumped 2% today to the top of the Dow after Robert W. Baird upgraded it from neutral to outperform. Despite Visa's struggles as of late -- the stock has fallen more than 11% year to date alongside the market's decline -- the company has managed to keep revenue rising across the board, particularly in its most recent quarter when operating revenue jumped more than 10%.

Today's announcement that retail sales picked up 1.1% in March is only good news for Visa and other credit card giants, a sign that American consumers are embracing shopping once again with the cold winter weather past and the economic picture brightening every day. The future's not entirely perfect, with the company facing a $5 billion lawsuit from Wal-Mart over card-swiping fees, although Visa has been adept at increasing its presence across the U.S. market. Keep an eye on Visa's earnings report on April 24, but the economy's increasing momentum adds strength to this iconic stock.

Earnings anticipation's helped Intel pick up 1.1% today to rank among the Dow's leaders. Despite the gain, however, analysts aren't all that high on Intel's projections for tomorrow. On average, Wall Street projects the company's earnings for the quarter to fall from the year ago's $0.40 per share to $0.37, although analysts believe revenue will pick up by 1.9% on average. The PC market's decline has hampered Intel's performance in a big way as of late, and analysts and investors will keep a close eye on whether the company can keep revenue growth on pace in its data center unit, which took home 7% revenue growth last year. For the company to thrive in the long term, it will need to ramp up diversification across growing tech niches such as mobile, where Intel plans to expand greatly the number of tablets running on its chips, and up-and-coming areas of promise such as the Internet of Things.

Citibank Mosco

Citibank in Moscow. Source: Wikimedia Commons, User Lite

Finally, Citigroup stock hit a 4% gain after the company's earnings surprised investors with a beat. The company's adjusted earnings jumped 4%, with a per-share result of $1.30 easily topping average analyst estimate of $1.13 for the quarter. While Citigroup suffered the same decline in mortgage and bond-trading revenue that has slammed earnings across big banks so far this quarter -- and took down Citi's own revenue by 1% year over year -- today's result is a big breath of fresh air for concerned investors who last month dealt with the company's failure to get Federal Reserve approval for its capital allocation program. Today's earnings are no miracle result for Citi, which still has plenty of work to do to appease regulators once more, but the company's 13% gain in stock trading and a downbeat start to financial sector earnings are a reminder that things could have been worse for one of America's largest banks.

Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Intel and Visa. The Motley Fool owns shares of Citigroup, Intel, and Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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