Earnings Day

by Larry Levin

Today's trade was not so much about the oil market's rally (again) with a hurricane in the Gulf, but rather the earnings coming out after the close. As I write this, the earnings are a definite disappointment; the S&P500 futures are down -12.00 points with the Dow futures down -112 points after the close. Will oil exacerbate this drop tomorrow, or will the hurricane veer off course causing oil to fall?

Apple reported a fiscal third-quarter profit of $1.07 billion, or $1.19 a share, up from $818 million, or 92 cents a share, during the same period a year ago with revenues rising 38%. However, Apple warned of slower sales next quarter. With that comment, the stock is now down 10% from the close.

SanDisk was down by as much as 13% after the company said its second-quarter net loss was $68 million, or 30 cents a share. Last year, it earned $28 million, or 12 cents a share.

Thanks in large part by lower expenses and a favorable exchange rate, Merck reported modestly higher second-quarter earnings on largely flat sales. MRK was down -6.2% by the close, and is down another -6.9% after the close.

Texas Instruments reported a surprising 4% drop in its second-quarter net profit as the chip giant staggered from an unanticipated decline in demand in June. The company said demand slowed unexpectedly in June after distributors cut down inventory levels and did not replenish them late in the quarter, the company said in a release. Texas Instruments also cited a sales decline for its wireless business in the quarter. After hours, TXN is down -12.55%.

In the latest chapter of the current novel, The American Consumer Is Tapped Out, American Express is used to make the point. American Express reported a stunning 38% drop in second-quarter earnings tonight and warned that it won't be able to meet long-term financial targets until the economy improves. The credit card company also said that even its most creditworthy, long-standing customers felt the effects of the economic slowdown that's currently sweeping the U.S. After hours AXP is down nearly -12%.

If AXP is feeling the pinch, even from its better customers, surely Bank of America, Citigroup, Wachovia and others will be feeling it soon.

Real Time Trading Signals*for

Trade Date: 7/21/08

E-Mini S&P Trades*
(before fees and commissions):

1) Engf (jumped) buy @ 8:50am at 1267.00 = -1.50 (1 lot)

2) 80% sell @ 11:20am at 1259.25 = -1.75*2

3) Engf sell @ 11:50am at 1261.75 = +1.50 (1 lot)

4) Engf buy @ 12:35pm at 1262.00 = -1.25 (1 lot)

5) Algorithm trades (6)...combined total...-6.00


E-Mini Russell Trades*
(before fees and commissions):

1) No ER trades filled today.


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