U.S. stocks were indicated to open higher Friday as index futures rose in premarket trading. Citigroup (”C”) was higher ahead of the Wall Street open after reporting better-than-estimated first-quarter revenue and issuing bullish guidance. Google (”GOOG”) was sharply higher after a solid earnings report late Thursday. A favorable report from Caterpillar (”CAT”) also attracted attention. Scores of other reports due Friday were likely to influence major indexes.
Friday's session could see some volatility due to options expiry, notes S&P MarketScope.
Bonds off as equities indicated higher. Dollar higher as euro pulls back from near-record high earlier in week. Sterling up. Gold futures lower. Oil futures lower even though as Pickens predicted higher prices.
On Thursday, the blue-chip Dow Jones industrial average inched higher by 1.22 points, or 0.01%, to finish at 12,620.49. The broader S&P 500 index added 0.85 points, or 0.06%, to close at 1,365.56. The tech-heavy Nasdaq composite index declined 8.28 points, or 0.35%, to end the session at 2,341.83.
No major economic reports were scheduled for release Friday.
Citigroup posted a first-quarter loss of $1.02 per share, vs. $1.01 EPS one year earlier, on a 48% revenue drop. The banking giant noted significant writedowns in subprime related direct exposures in fixed income markets and highly leveraged finance commitments. Citi recorded writedowns and credit costs of $6 billion, which was sharply lower than recent market speculation of writedowns of up to $22 billion.
Google reported first-quarter EPS of $4.84, vs. $4.43 in the 2007 fourth quarter on a 7% sequential revenue rise. Revenue rose 42% year-over-year. Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of its AdSense partners, increased approximately 20% over the year-earlier quarter. The company expects to continue to make significant capital expenditures.
Caterpillar announced first-quarter EPS of $1.45, vs. $1.23 one year earlier, on an 18% revenue rise. The equipment maker continues to expect another record year with sales and revenues increasing 5%-10% and EPS increasing 5%-15% from 2007 despite further weakening in North America.
In energy markets Friday, May West Texas Intermediate crude oil futures were lower at $113.20 per barrel.
The dollar index was up 0.60 to 72.21 as stock index futures surged.
Among Friday's other stocks in the news, Capital One Financial (”COF”) reported first-quarter EPS of $1.47, vs. $1.62 one year earlier (including one-time items) as more reserves for credit losses and other factors offset a 14% revenue rise.
Honeywell International (”HON”) reported first-quarter EPS of 85 cents, vs. 66 cents one year earlier, on an 11% revenue rise. Honeywell raised its 2008 sales guidance by $700 million to $36.8-$37.4 billion, and moved EPS guidance to $3.70-$3.80, the high end of its previously stated range.
Sandisk (”SNDK”) posted first-quarter non-GAAP EPS of 21 cents, vs. 19 cents one year earlier, on an 8% revenue rise. The company says pricing was challenging throughout the quarter due to industry-wide excess supply which hurt product gross margin. It forecasts second-quarter revenue of $875-$950 million, which is seen ahead of current Street views.
Xerox (”XRX”) reported adjusted first-quarter EPS of 27 cents, vs. 24 cents one year earlier, on a 13% revenue rise.
Schlumberger (”SLB”) reported lower-than-expected first-quarter EPS $1.09, vs. 96 cents one year earlier, on a 15% revenue rise.
European indexes were trading higher Friday. In London, the FTSE 100 index gained 0.97% to 6,038.30. In Paris, the CAC 40 index climbed 1.68% to 4,943.73. Germany's DAX index added 1.86% to 6,806.42.
Markets in Asia ended mixed Friday. Japan's Nikkei 225 index rose 0.58% to 13,476.45. In Hong Kong, the Hang Seng index fell 0.25% to 24,197.78.
Treasury market
Treasuries were heading lower as stock index futures surged on some better than expected earnings results from Citigroup and Google. Some market payers are speculating the Federal Reserve will cut rates only 25 basis points at its Apr. 30 policy meeting, then go on hold to see how economy performs in coming months. The 2-year Treasury note was off 05/32 to 99-06/32 for a yield of 2.1912%, the 10-year note was off 13/32 to 97-26/32 for a yield of 3.776%, and the 30-year bond was off 13/32 to 97-04/32 for a yield of 4.555%.
The bond market was awaiting speeches by Richmond Fed President Lacker, Boston Fed President Rosengren, and Philadelphia Fed chief Plosser.