Hot Stock Minute

Stocks Bounce Back, Coke Pops, Goldman Fizzles

Stocks rebounded today on strong earnings reports from several companies in the S&P 500. All the major indexes closed more than 1% higher. Commodities like gold and oil also recouped some of their recent losses. On the economic front, the Commerce Department reported that construction of new homes jumped far more than expected. Overall housing starts climbed 7%; their highest level since the financial crisis.

Goldman Sachs (GS) tumbled 1.7% despite a blockbuster earnings report released before the bell. The company posted profits of $4.29 per share, beating expectations of $3.88. That's an increase from $3.92 one year ago. Overall revenues came in at $10.1 billion versus estimates of $9.7 billion. Goldman says it was able to beat estimates thanks to gains in its underwriting business, but it warned that macroeconomic uncertainty is causing clients to curtail trading.

Coca Cola (KO) popped 5.6% on its earnings report which was also released this morning. The company earned 46-cents a share versus estimates of 45-cents. Revenues were $11.04 billion, also ahead of estimates by $100 million, and yet $100 million below the same quarter one year ago. Coke says its overall business was boosted by a rise in sales in Europe and emerging markets. Coke has been climbing along with the broader markets since the start of the year.

Johnson & Johnson (JNJ) also had the right prescription for shareholders this morning with its quarterly report. The company says it earned $3.5 billion or $1.22 per share. Excluding items like litigation expenses, that rose to $1.44 per share, beating expectations of $1.40. J&J credits the beat to strong sales of its prescription drugs. It was also helped by the return on non-prescription medicines that were previously recalled, however sales of medical devices fell short of expectations. The stock has been under pressure since last week when JP Morgan downgraded it to neutral from overweight.

NETGEAR (NTGR) spent the day in the wrong gear with shares closing down 7.8%. The stock began falling after yesterday's closing bell when the company lowered its first quarter earnings guidance. NETGEAR warned that trouble with a new line of data storage products has led to a dip in shipments. The company is now calling for quarterly adjusted earnings of 45-cents to 50-cents a share, down from expectations of 59-cents.

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