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Stock Market Update for 07/21/2011

July 21, 2011

stock market updateStocks have moved mostly higher in early trading on Thursday, as traders react positively to some upbeat earnings news. The major averages have shown notable moves to the upside after ending the previous session modestly lower.

In the past few minutes, the major averages have edged down off their highs for the young session but remain firmly positive. The Dow is up 95.66 points or 0.8 percent at 12,667.57, the Nasdaq is up 10.74 points r 0.4 percent at 2,824.97 and the S&P 500 is up 11.64 points or 0.9 percent at 1,337.48.

The early strength on Wall Street is partly due to better than expected quarterly results from Morgan Stanley, with the financial services giant jumping by 5.6 percent.

While Morgan Stanley reported a loss of $0.38 per share compared to a year-ago profit, the loss was much narrower than the $62 per share loss that analysts had expected. The company also reported stronger than expected revenue growth for the quarter.

After the close of trading on Wednesday, Intel (INTC) reported second quarter adjusted earnings of $0.59 per share on revenues of $13.1 billion. Analysts had expected the semiconductor giant to earn $0.51 per share on revenues of $12.82 billion.

For the third quarter, Intel estimates revenues of $14 billion, plus or minus $500 million, above the $13.48 billion consensus estimate.

American Express (AXP) also reported second quarter earnings and revenues that exceeded expectations, while AT&T (T) reported second quarter earnings that came in line with estimates.

In other corporate news, Express Scripts (ESRX) announced an agreement to acquire Medco Health Solutions (MHS) for $29.1 billion in cash and stock. Medco shareholders will receive $28.80 in cash and 0.81 shares of Express Scripts for each Medco share they own upon closing of the transaction.

Stocks are also benefitting from news that Germany and France have reached an agreement on the strategy to extend financing to Greece. The agreement came ahead of a European summit on the Greek debt crisis.

Morgan Stanley is helping to lead the financial sector higher, while considerable strength has also emerged among transportation stocks. The Dow Jones Transportation Average is rising by 1.9 percent amid particularly strong gains by Landstar (LSTR) and Union Pacific (UNP).

While tobacco, natural gas, and defense stocks are also seeing early strength, considerable weakness has emerged among electronic storage stocks. Seagate Technology (STX) and Western Digital (WDC) are turning in two of the storage sector’s worst performances.

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