Stocks Gain With Help From Earnings

4:30 PM, Jul 15, 2011 --

• DJIA up 42.61 (+0.3%) to 12,479.73
• S&P 500 up 7.27 (+0.6%) to 1,316.14
• Nasdaq up 27.13 (+1%) to 2,789.80

GLOBAL SENTIMENT

• Nikkei up 0.4%.
• Hang Seng down 0.3%.
• Shanghai Composite up 0.4%.
• FTSE-100 steady.

UPSIDE MOVERS

(+) GOOG beats with Q2 results.

(+) C beats with Q2 results.

(+) CLX gets $76.50 going private offer.

(+) HK sold for $38.75 a share.

(+) MAT beats with earnings.

(+) VICL continues evening gain that followed pact with Astellas Pharma.

(+) CY downgraded

(+) WBS misses with results.

DOWNSIDE MOVERS

(-) RAH continues evening decline that followed earnings miss.

(-) TSYS downgraded.

(-) DCTH selling shares.

(-) SKH downgraded.

MARKET DIRECTION

Stocks end just in positive territory after a volatile Friday. Stocks got an early earnings boost on back of results from Google (GOOG) and Citi (C) but surrendered those gains as the results of European bank stress tests loomed. When those test results came in slightly better than expected, or at least as expected, U.S. stocks recovered anew. The main averages dropped 1% to 2% for the week, however.

The European Banking Authority (EBA) said that out of the 90 European banks, eight of them failed stress tests - fewer than what the market was anticipating.

Also, President Obama signaled this morning that he is ready to move ahead with cutting deficits at the same time the national debt limit is raised. He said the move would provide a "unique opportunity to do something big" and stabilize the U.S. economy for decades. The government is facing an Aug. 2 deadline to raise the debt ceiling. Failure to do so could mean "effectively a tax increase for everybody" if the government defaults, because interest rates would soar, the president said.

In the latest economic data, the July Thomson Reuters/University of Michigan consumer sentiment index fell to 63.8, reaching the lowest level since March of 2009, from 71.5 in June. Economists surveyed by MarketWatch had expected the barometer to tick down to 71.3. Before the bell, the U.S. Department of Labor reported that the U.S. June Consumer Price Index fell 0.2% with the core rate increasing 0.3%. The move was mostly in line with analysts forecasts.

In company news:

Petrohawk (HK) surged on news BHP Billiton (BHP) will buy the company for $12.1 billion, paying a premium of 65% to raise its presence in shale fields, underground rock formations rich in oil and gas.

Cracker Barrel Old Country Store (CBRL) announced today that due to its cost reduction and organization streamlining initiative, it will reduce its workforce, eliminating about 60 management and staff positions, mostly in its home office in Lebanon, Tenn. The company expects to save $10 million a year on a pretax basis as a result of the workforce reduction.

In healthcare M&A, Teva Pharmaceutical Industries Ltd. (TEVA) is down $0.20, or 0.41% to $48.23, after the company announced today that it has completed the acquisition of effectively 100% of the outstanding shares of Japanese Taiyo Pharmaceutical Industry Co. Ltd. for $934 million in cash. Also, Valeant Pharmaceuticals (VRX) announced today that it signed an agreement to acquire the assets of the Ortho Dermatologics division of Janssen Pharmaceuticals.

Clorox (CLX) gained as investor Carl Icahn has offered to take the company private in a $12.6 billion deal. Clorox shareholders would receive $76.50 per share in cash under the terms of the offer. Clorox confirmed the offer.

News Corp. (NWS) on Friday announced that News International Chief Executive Officer Rebekah Brooks will resign immediately, in the wake of a phone hacking scandal at the media group's former tabloid, News of the World. In a statement, the company said Brooks will be replaced by Tom Mockridge, who joins from Sky Italia, where he has been chief executive officer since its launch in 2003.

In the latest earnings news:

- Citigroup (C) is higher after the bank reported Q2 net income of $3.3 billion, or $1.09 per diluted share, on revenues of $20.6 billion. Second quarter net income grew 24% from the prior year period and 11% from the first quarter 2011, while net revenues were 7% lower versus the prior year period and 5% higher than the first quarter 2011. The analyst consensus was for revenues of $19.94 billion and EPS of $0.97.

- Shares of Google (GOOG) are up almost 13% at $597.32, after it announced results for the second fiscal quarter of this year. The internet search giant reported Q2 non-GAAP EPS of $8.74 per share, vs. the Street view of $7.85 per share. Revenue, ex TAC, was $6.92 billion, well ahead of the analyst consensus of $6.55 billion on Thomson Reuters.