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Dow, S&P 500 Rise to All-Time Highs; Morgan Stanley Beats; Dell Rises on Delayed Vote

Dan Berman
Hot Stock Minute

Stocks broke new ground today, hitting record highs as Ben Bernanke spent his second day on Capitol Hill. The major takeaway from his testimony has been that there's no concrete timetable for scaling back the central bank's bond buying program. Bernanke has also emphasized that there could be a big lag between the end of quantitative easing and a rise in interest rates. As for today's economic data, weekly jobless claims took a healthy fall. The Labor Department reports 334,000 new claims were filed last week. That was a drop of 24,000 and the lowest level in four months.

Morgan Stanley (MS) has joined the list of banks beating earnings estimates for the quarter. Shares jumped 4% as the company posted profits of 45-cents a share when expectations were for 43-cents. Compare that to last year's figure of just 16-cents. Revenue was $8.3 billion compared with estimates of $7.89 billion. The company says it was helped by increased activity in equities trading. It also announced plans to buy back up to $500 million of in stock.

UnitedHealth Group (UNH) rose 6% after topping earnings estimates. UNH posted $1.40 a share when expectations were for $1.25. It did however, slightly miss on revenue with $30.41 billion in sales compared to $30.49 billion. The company cited robust membership growth and lower-than-expected medical costs for its results. UnitedHealth is now raising the lower end of its forecast for the full year.

Verizon (VZ) also beat on earnings but missed slightly on revenue. Shares fell 1.5% on the news. The company reported earnings of 73-cents a share, a penny above estimates. Revenue was $29.79 billion compared with expectations of $29.82 billion. The company says growth is being fueled by the wireless unit; it added 941,000 devices to its subscription plans. The majority of gains came from existing customers adding more devices to their plans as opposed to new customers.

Dell (DELL) climbed almost 2% on news that the company was delaying a shareholder vote on a leveraged buyout. But even with the gains, share prices remain below the $13.65 offered in the buyout. The vote was put off after several major shareholders indicated they would be voting against the plan proposed by company founder and CEO Michael Dell along with Silver Lake Management. It's likely that opponents of the plan are leaning toward a counter proposal offered by activist investor Carl Icahn. In his latest bid, Icahn wants Dell to buy back shares at $14 apiece and offer a warrant for every four shares held. Those warrants would allow for the purchase of additional shares for $20 within seven years.

eBay (EBAY) fell nearly 7% on its earnings report even though results matched estimates of 63-cents a share on revenue of $3.88 billion. The problem is the company is warning "headwinds" in the second half of the year, coming from Europe and Korea. eBay has been focusing on mobile shoppers, international expansion and partnerships with local physical stores. Shares of eBay are up 41% over the past year, but have underperformed the market in 2013, up 7%.

It was a similar story with Intel (INTC). Shares fell nearly 4% though its numbers were pretty much in line with expectations: 39-cents a share on $12.8 billion in sales. The problem: profits were 54-cents a share last year. Intel says it's suffering from declining computer sales and weakness in China. Looking forward, the company cut its full-year revenue forecast and is scaling back capital spending. Shares of Intel are down 8% over the last year, though they have climbed 13% since the start of 2013.