Thursday, April 9, 2009

Wall Street Set To Rally On Wells Fargo Profit Forecast

. Thursday, April 9, 2009

By stockOzone team

US stocks were poised to rally on Thursday after Wells Fargo projected first quarter earnings that topped analyst estimates.

At 8:52 am ET, Standard & Poor's 500 Index futures jumped 20.60 points to 843.20. Dow Jones Industrial Average futures rallied 157 points to 7950. Nasdaq Composite Index futures advanced 23.50 points to 1322.50.

Shares of Wells Fargo & Co. (NYSE: WFC) jumped over 20% before the opening bell after it said that it expects to report first quarter profit of roughly $3 billion, or 55 cents a share. Analysts on average are currently expecting profit of 31 cents a share for the first quarter. The bank said that it expects revenue to climb roughly 16% to $20 billion. Wells Fargo is due to report its first-quarter results on April 22.

A release by Department of Labor on Thursday showed that the number of Americans filing first- time claims for unemployment benefits decreased 20,000 to 654,000 in the week ending April 4. The four-week average of seasonally adjusted initial jobless claims, a less volatile gauge, declined 750 to 657,250. Continuing claims for the week ending March 28 climbed 95,000 to a record 5.84 million.

According to Commerce Department, U.S. trade deficit narrowed to $26 billion, the smallest since 1999 as imports of goods and services declined 5.1% to $152.7 billion.

Shares of Textron Inc. (NYSE: TXT) jumped in pre market action on media reports that a consortium of United Arab Emirates companies and a Kuwaiti firm is close to a deal to buy US aircraft manufacturer and defense contractor .

Wal-Mart Stores Inc. (NYSE: WMT) reported same store sales that fell short of analyst estimates. The retail giant said that same-store sales in the U.S. rose 1.4%, excluding fuel. Analysts on average were looking for increase of 3.2%.

Late on Wednesday, Moody's Investors Service downgraded its credit ratings on Berkshire Hathaway Inc. (NYSE: BRK-A) from Aaa to Aa2, saying that "extraordinary market pressures have reduced the excess cushion available from National Indemnity and the other affected operations to support potential funding needs of the parent company."

Overseas, Asian stock markets finished with strong gains. European stocks climbed in afternoon trade. Oil too jumped in the electronic trade at New York Mercantile Exchange before the opening bell.

Disclosure: Author does not own any of the stocks discussed here.

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