Markets Get Twin Boost From Oil, Earnings

(RTTNews) - The major U.S. index futures are pointing to a mixed opening on Tuesday, with risk appetite getting firmed up as earnings news flow continues to be positive.  Goldman and Johnson & Johnson were among the ones to have released stand out quarterly results. Oil is up over $41-a-barrel and the dollar is weaker. Asian stocks ended mostly higher, with Japan leading the pack, as it clawed back most of its previous session's losses amid the weakening of the yen.

Stocks across the Atlantic are buoyant amid domestic earnings optimism and a positive German economic sentiment reading. On the domestic data front, housing starts for March were a bit disappointing, although starts are still at elevated levels. Oil's move could play a big part in determining if the upward momentum would be sustained.   U.S. stocks advanced solidly on Monday, as oil trimmed most of its early steep losses and earnings news was fairly encouraging.    The major averages opened lower, as oil slumped, but they recouped their losses in early trading. After rising steadily till early afternoon trading, the averages moved roughly sideways, closing firmly positive for the session    The Dow Industrials added 106.70 points or 0.60 percent before ending at 18,004, moving back above the 18,000 level for the first time since July 20th, 2015. The S&P 500 Index ended up 13.61 points or 0.65 percent at a more than 5-month high of 2,094 and the Nasdaq Composite Index closed 21.80 points or 0.44 percent higher at 4,960.    Twenty-seven of the thirty Dow components advanced in the session, with Chevron (CVX), Microsoft (MSFT), Disney (DIS) and Visa (V) leading the gains. On the other hand, Apple (AAPL) fell sharply.    Among the sectors, biotechnology and energy stocks saw notable strength, moving higher along with most of the other major sectors.    On the economic front, the National Association of Home Builders reported that its housing market index, reflective of confidence among homebuilders, came in unchanged at 58 in April, while economists expected a 1-point improvement to 59. Among the sub-indexes, the sales expectations index rose 1 point to 62, and the present sales condition index remained elevated at 67 despite a 2 point-drop in April. The index measuring prospective buyer traffic was up 1 point at 44.    Currency, Commodity Markets    Crude oil futures for May delivery are rising $0.45 to $41.64 a barrel after slipping $0.58 to $39.78 a barrel in the previous session. Though oil ended lower, it did well enough to recoup most of its losses from the Asian session, when it was down about 6 percent.    Meanwhile, an ounce of gold is currently trading at $1,252.20, up $17.20 from the previous session's close of $1,235. On Monday, gold rose $0.40.    On the currency front, the U.S. dollar is trading at 109.26 yen compared to the 108.82 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1353 compared to yesterday's $1.1313.   Asia    Most Asian markets advanced, led by the Japanese market, as risk sentiment firmed up following Wall Street's rebound overnight and oil's upside.    The Japanese market advanced strongly, recovering from the previous session's sell-off. The yen's retreat from a 1-1/2 year higher lent support to the export-heavy market. The Nikkei 225 Index opened higher and moved roughly sideways throughout the session. The index ended up 598.49 points or 3.68 percent at 16,874.    A majority of stocks moved to the upside, with financial and export stocks seeing notable strength. Mazda Motors and Sumitomo Mitsui Financial were among the best performers of the session.    Australia's All Ordinaries Index hovered in positive territory throughout the session before ending 49.80 points or 0.96 percent higher at a 3-month high of 5,255. Material and energy stocks rallied strongly and financial and telecom stocks also saw marked strength. However, consumer staple, industrial and real estate stocks came under selling pressure.    Hong Kong's Hang Seng Index ended a volatile session up 274.71 points or 1.30 percent at 21,436, and China's Shanghai Composite Index closed at 3,043, up 9.16 points or 0.30 percent.    On the economic front, the minutes of the Reserve Bank of Australia's April monetary policy meeting suggested that it is not unduly worried about a stronger Australian dollar. At the meeting, the central bank held rates unchanged at a record low 2 percent for the tenth straight meeting. The minutes indicated that the central bank may not affect a rate cut in the near term.     Europe    European stocks opened higher and advanced further in early trading. The averages in the region are currently notably higher amid the release of some corporate results and oil's gains.  The German market is leading from the front, with the key DAX Index up more than 2 percent, receiving a shot in the arm from the German economic sentiment reading, which is at a 4-month high.   In major corporate news, French dairy company Danone reported lower first quarter sales, hurt by a stronger euro. However, on a like-for-like basis, sales were higher.     Buoyed by solid sales of cancer drugs, Roche reported higher first quarter sales and affirmed its guidance for 2016. Paint maker Akzo Nobel's first quarter earnings topped expectations.    In its production update, Rio Tinto (RIO) reported higher iron ore production and shipments for the first quarter, although it cut is production guidance for 2017. L'Oreal reported a year-over-year increase in first quarter sales.     Remy Cointreau reported strong fourth quarter sales, thanks to solid performances by its U.S. and China units. AB InBev announced that it has agreed to sell some of SABMiller's beer brands to Japan's Asahi for $2.55 billion ahead of its acquisition of SABMiller.    On the economic front, the results of a survey by the ZEW Institute showed that economic sentiment among Germans was better than expected in April. The economic confidence index rose to 11.2 in April compared to a reading of 8 expected by economists.    Eurostat reported that construction output in the eurozone fell 1.1 percent month-over-month in February following a 2.4 percent increase in January. Annually, construction output climbed 2.5 percent, slower than January's 4.9 percent growth.    Data released by the European Central Bank showed that the current account surplus of the euro area fell to 19 billion euros in February from 27.5 billion in January, as the surplus on trade in goods as well as primary income narrowed and secondary income was in a deficit.    U.S. Economic Reports     After reporting a sharp increase in new residential construction in the previous month, the Commerce Department released a report showing that U.S. housing starts pulled back by much more than expected in March.

The report said housing starts tumbled by 8.8 percent to an annual rate of 1.089 million in March after jumping by 6.9 percent to a revised 1.194 million in February. Economists had expected housing starts to dip by about 0.9 percent to a rate of 1.167 million compared to the 1.178 million originally reported for the previous month.

Building permits, an indicator of future housing demand, also slumped by 7.7 percent to a rate of 1.086 million in March from a revised 1.177 million in February. The decrease surprised economists, who had expected building permits to climb 2.8 percent to a rate of 1.200 million from the 1.167 originally reported for the previous month.   Stocks in Focus    IBM (IBM) reported better than expected first quarter adjusted earnings per share and revenues. However, revenues were down modestly, dropping for the 16th straight quarter. The company's full year adjusted earnings per share guidance was lukewarm.    Netflix' (NFLX) first quarter earnings per share topped estimates, while its revenues were shy of estimates. The company's new subscriber growth forecast for the second quarter was weak.    Rambus (RMBS) reported above-consensus non-GAAP earnings per share for its first quarter, while its revenues missed estimates. The company's second quarter revenue guidance was weak.    Illumina (ILMN) released preliminary first quarter results, expecting first quarter revenues below Street expectations. The company attributed the shortfall to lower than expected sales of HiSeq 2500, 3000 and 4000 instruments.     Whirlpool (WHR) announced that its board authorized a $1 billion share repurchase program. The company's board also approved an 11 percent increase in its quarterly dividend.    Discover Financial Services (DFS), Fulton Financial (FULT), Intuitive Surgical (ISRG), Linear Technology (LLTC), Manhattan Associates (MANH), VMware (VMW) and Yahoo (YHOO) are among the companies due to release their financial results after the close of trading.    Johnson & Johnson's (JNJ) first quarter adjusted earnings exceeded estimates and its sales matched estimates. The company raised its 2016 adjusted earnings per share guidance.

Goldman Sachs (GS) first quarter earnings were ahead of expectations, while its revenues trailed expectations.

UnitedHealth (UNH) reported better than expected first quarter results and issued upbeat guidance for the full year.

Philip Morris (PM) reported below-consensus results for its first quarter but raised its earnings per share guidance for the full year.

Rockwell Automation (ROK) announced the elevation of company insider Blake Moret as its CEO and the transition of the incumbent CEO Keith Nosbusch to the role of Chairman, effective July 1st, 2016.

Brinker International (EAT) reported better than expected first quarter results but its revenues were below estimates.

TD Ameritrade (AMTD) reported first quarter earnings per share that were in line, while its revenues trailed estimates.