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Stocks Extend Gains on Earnings Beats and Falling Jobless Claims

Dan Berman
Hot Stock Minute

Stocks closed higher again today, but gave back some gains after reports that Germany's central bank president doesn't support the ECB's Outright Monetary Transactions program. For much of the day, markets were boosted by a number of earnings beats and encouraging numbers from the Labor Department. Continuing a pattern we've seen quite a bit this earnings season, most companies are beating profit estimates, even when revenues are down. The major economic data out today were weekly jobless claims which fell more than expected to a seasonally adjusted 339,000. That's a drop from last week's report which came in at 352,000 new claims.

3M (MMM) was marred by a major miss. Shares fell nearly 3% on the company's disappointing quarterly report which was released this morning. 3M says it made $1.61 per share when estimates were for $1.65. Revenues were $7.634 billion, almost $200 million below the consensus.

Another Dow component, Exxon Mobil (XOM), fell over 1% after beating on earnings even though it missed on revenues. Exxon, the largest U.S. company by market capitalization, earned $2.12 a share, on revenue of $108.8 billion. Analysts has expected $2.05 per share on $119.83 billion. The company said it was boosted by its chemicals business. Oil and gas production both fell.

Southwest Airlines (LUV) ended the day flat on its earnings report. The airline posted profits of 8-cents a share, beating estimates for 2-cents, but down from 13-cents a year ago. Revenue also exceeded the consensus. The company is warning that furloughs of FAA workers could could hurt it in the coming quarter. Still, Southwest says bookings for May and June have been solid.

Zynga (ZNGA) fell over 6% today in wake of its earnings. Zynga surprised by swinging to a profit of a penny per share, but revenues slipped nearly 18% missing estimates. The company says it's struggling as older games lose popularity and newer ones fail to find a following the way Farmville did. This has been a wild week for Zynga which had actually been up more than 5% during the regular trading day yesterday. Shares also spiked on Monday amid false reports that the company was being bought out.

Shares of The Cheesecake Factory (CAKE) climbed 5% on news that the company had a nice slice of profits for the first quarter. The restaurant logged earnings of 47-cents a share. That's up 22% from a year ago and beat estimates of 42-cents. Revenue was also higher than expected at $463-million. The company also announced licensing agreements to open three restaurants overseas. It got upgrades from Jeffries, RBC and Susquehanna after the report was released.