Monday, May 9, 2011
With nothing major on the economic calendar and the earnings season winding down, stocks will likely lack a clear direction today. But lingering positivity from Friday’s strong jobs report may keep overall sentiment favorable.
The strong jobs report on Friday helped offset some of the negative sentiment from soft economic readings earlier in the week. These reports had raised questions about the economy’s growth momentum in the current quarter folllowing the first quarter’s anemic growth pace.
It was these concerns that caused the sharp pullback in commodity prices and created an air of tentativeness in the stock market. The positive Friday report addressed some of these concerns. But questions about the economy are likely to dominate market sentiment in the coming days.
We did not have any household names reporting earnings reports today. And those that did report painted an overall mixed picture. We had Tyson Foods (TSN) modestly miss on EPS, as margin pressures due to rising input costs offset strong top-line gains. Louisiana-Pacific (LPX), the building products maker, also came up short, as did AES Corp (AES), the electric utility.
On the positive side, Dril-Quip (DRQ), the oilfied equipment maker, reported better-than-expected adjusted results. And McDonald’s (MCD) came ahead of expectations in April same-store sales numbers.
Sheraz Mian
Director of Research
Zacks Investment Research
