Change text size

• Email This Article
• Print This Article
• Digg This
• Delicious
• Subscribe

Stocks are expected to open higher, led by the Internet sector following strong earnings results from Google (GOOG).  Trading may be cautious, however, ahead of the Fed’s latest meeting on interest rates.  Approximately forty-five minutes before the start of trading in New York, index futures on the Dow Jones Industrial Average ($INDU) gained 15 points, while Nasdaq ($COMPQ) futures were up 4.

No economic news is due out today, but Federal Reserve officials conclude a two-day meeting at 2:15 p.m. ET. The Federal Reserve Open Market Committee [FOMC] is expected to announce another ¼ point hike in its Fed Funds rate at that time.  The committee is also expected to reiterate its pledge to continue raising its borrowing costs at a “measured” pace to help fight inflation.

Stocks may advance despite the Fed’s vigilance.  Internet stocks are expected to open higher after Google posted profits well ahead of analyst estimates.  Shares have skyrocketed $26.00 to $217.90 this morning.  The company posted a sevenfold increase in profits.  Earnings per share rose to 92 cents a share, on sales of $1.03 billion.  Analysts were looking for profits of 72 cents a share on sales of $936 million.  

Other dot com stocks, Ebay (EBAY), Yahoo (YHOO), and Amazon.com (AMZN), rose in reaction to the news.  Amazon.com releases earnings after the closing bell.  Analysts expect 40 cents a share on revenues of $2.44 billion from the online retailer.

Among the other stocks to watch, Nvidia (NVDA) is trading higher after posting better-than-expected fourth quarter profits and sales.  Shares of the chipmaker rallied $1.15 to $24.50.  Adobe (ADBE) might also show strength after the software maker raised its fourth quarter sales and earnings outlook.  

One Dow component, Boeing (BA), is out with earnings this morning.  Shares of the aerospace and defense company might show weakness after reporting a drop in fourth quarter profits due to charges for the discontinuation of 717 jets and costs for a tanker program

Yesterday, stocks rose and the S&P 500 Index ($SPX) gained ground for the fifth time in six trading sessions.  It appears that investors are becoming more optimistic that profits can continue growing despite forthcoming rate increases from the Federal Reserve.  As a result, anxiety levels are also falling, while stocks are climbing.  For example, the CBOE Volatility Index ($VIX), which is sometimes called the “fear gauge”, edged down .79 to 12.03 on Tuesday.  
  

Frederic Ruffy 
Senior Writer 
Optionetics.com ~ Your Options Education Site

• Email This Article
• Print This Article
• Digg This
• Delicious
• Subscribe

Recent Articles by Frederic Ruffy, Optionetics.com

• January 23, 2009
  Closing Wrap-Up, January 23
• February 25, 2008
  Stock Talk: Visa Proposes Largest IPO Ever
• February 25, 2008
  Morning Watch, Feb. 25
• February 22, 2008
  Sentiment Journal: Boooooooo!
• February 22, 2008
  Morning Watch, Feb. 22