Day Ahead: BofA Swings to Loss

 | Apr 16, 2014 | 8:55 AM EDT  | Comments
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It may turn out to be a bumpy ride, but Wall Street appears ready Wednesday morning to build on the late-day rally that pulled U.S. markets out of the dumps Tuesday.

Meanwhile, better-than-expected inflation data have boosted European stocks, while positive signs of growth in China's economy rallied Asian markets overnight. Among commodities, gold and oil futures were moving higher recently. And the yield on 10-year U.S. Treasuries rose slightly to 2.64%.

Housing starts rose 2.8% in March, with 946,000 new units compared with an upwardly revised 920,000 the previous month. But the figure fell short of estimates of 965,000 starts. Last month, building permits fell just short of the 1 million estimate. Meanwhile, falling mortgage rates spurred a 4.3% gain in mortgage applications last week, according to the Mortgage Bankers' Association. Applications had fallen 1.6% in the previous week.

Still to come: March industrial production will be released at 9:15 a.m. ET, and the Federal Reserve's beige book for April comes out at 2 p.m.

Banks lead earnings releases this morning, including reports from Action Alerts PLUS holdings Bank of America (BAC) and U.S. Bancorp (USB). Bank of America swung to a first-quarter loss of a nickel per share on one-time charges stemming from mortgage products rooted in the financial crisis. Meanwhile, U.S. Bancorp matched earnings estimates of $0.73 per share.

Elsewhere in the banking sector, PNC Financial (PNC) posted mixed results: Net income was a whopping $0.18 above what analysts expected, but the firm missed revenue calls. Credit Suisse (CS) missed Wall Street estimates on a 34% drop in first-quarter earnings.

Two health care names round out this morning's docket: Abbot Labs (ABT) bested estimates by a nickel per share but fell just short of revenue forecasts, and St. Jude Medical (STJ) beat estimates by a penny per share.

Late Tuesday, Internet pioneer Yahoo! (YHOO) beat first-quarter adjusted earnings estimates by a penny per share on in-line revenue, even as net income fell about 20% from a year earlier. But, given a potential windfall from the company's 24% stake in Asian Internet giant Alibaba Group -- which is soon set to publicly debut -- investors had reason to rally shares by 9% in premarket trading.

Also reporting last night was chipmaker Intel (INTC), which beat first-quarter EPS estimates by a penny on sales that just missed views. And rail operator CSX (CSX) surpassed earnings views by $0.03 per share on in-line revenue.

Later today, we're due to hear from charitable trust holdings Google (GOOG, GOOGL) and IBM (IBM), as well as American Express (AXP), Capital One Financial (COF), Kinder Morgan (KI), Kansas City Southern (KSU) and SanDisk (SNDK), among others.

Elsewhere, independent investment bank Moelis (MC) raised $163 million last night, offering 6.5 million shares at $25 apiece. That price was below the expected range of $26 to $29.

Finally, Federal Reserve Chair Janet Yellen and the Dallas Fed's Richard Fisher will be at the lectern today in separate appearances.

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