Another day of earnings leads to another round of favorable results. We saw great results coming out of Microsoft and GE, which both enjoyed nice returns in the market today, and the Dow Jones Industrial Average
Now let's look at Friday's Dow laggards.
Bank of America
B of A was the hardest hit of all the Dow stocks today, trading with heavy volume and closing on a 4.68% drop. The downhill tumble is a continuation from yesterday, when the bank released disappointing first-quarter earnings. Profits were down 68% for the quarter, after taking into account the $4.8 billion pre-tax accounting charge related to changes in the value of the bank's debt.
Besides Thursday's earnings report, broader questions about this year's outlook are taking their toll. Management continues to restructure the company by strengthening its balance sheet, improving efficiency, and implementing cost-saving measures, but although these actions sound great, they're coming with a high price tag today. The sell-off can partly be attributed to skepticism over management's plans, as seen in a split of analyst estimates: KBW and Citigroup raised their price targets, while Mike Mayo helped the contrarian view and issued a "sell" rating.
The technology sector was a bit of a mixed bag, with SAP and United Technologies up while others turned lower. Hewlett-Packard found itself caught in ebb tide, dropping 73 points and closing at $24.53 as it coasts into the weekend. HP has growing inventory levels and could see some big things coming up, but we'll know more when the company reports earnings in a month. Monday also will be interesting with the first-quarter GDP consumer report being published.
After being the darling last week and opening earnings season on a high note, Alcoa braved through a week sprinkled with news of possibly slowing economic growth. The stock dropped 67 points on the day, marking three consecutive days of decline. Once again, Alcoa will be a stock to keep your eyes on Monday as economic growth numbers come out.
And the beat continues
With the Dow ending up Friday and closing out the week above the 13,000 threshold, we can look back and see how the market has adjusted as it digests the first-quarter earnings reports. With the majority of companies so far exceeding expectations and riding the momentum to greater returns, now would be a good time spot the opportunities waiting for us all. To help you out, our analysts have prepared a great report on "5 Stocks Investors Need To Watch This Season." This report gives you a heads up on five great companies spanning a few sectors. Make sure you look over your copy of this free report before earnings season ends!