Stocks: German confidence, earnings lend support

@CNNMoneyInvest April 20, 2012: 8:36 AM ET
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NEW YORK (CNNMoney) -- U.S. stocks were poised to open higher Friday, after a German business confidence survey came in stronger than expected and earnings from Corporate America remain strong.

The Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were up about 0.5%. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Encouraging news came in before the opening bell from Germany, where a reading on business confidence unexpectedly increased for the sixth straight month. The ripple effect helped turn around European markets, and give a boost to the euro and oil prices.

Frriday is otherwise a light day on the economic calendar, with no major U.S. reports due, but investors will continue to get first-quarter results from several large firms.

Ahead of the opening bell, General Electric (GE, Fortune 500) reported earnings of 34 cents a share on $35.2 billion in revenue, just ahead of analyst estimates. Shares rose 1% in premarket trading.

Quarterly earnings this round have been surprisingly strong. Of the 113 companies in the S&P 500 that had reported quarterly results as of early Friday, 92 beat expectations, while 12 matched and just 9 came up short, according to Capital IQ. Analysts are expecting overall S&P 500 first-quarter earnings to climb 6%, with revenues edging up 5%.

Anxieties remain, however, about the European crisis and the question of whether large economies such as Spain and Italy may be drifting towards crisis.

Over the past few months, the European Central Bank has pulled out all the stops to prevent a credit crunch by providing banks with €1 trillion in ultra-low cost financing. But the potency of the ECB's two long-term refinancing operations, or LTROs, appears to be fading, as yields on Spanish and Italian bonds have shot higher in recent weeks.

Investors are hopeful that global finance officials will announce new resources for the International Monetary Fund during the IMF and World Bank's spring meeting in Washington. Analysts with the Eurasia Group expect the IMF to announce $400 billion in additional funding at the conclusion of the meeting this weekend.

"Certainly there will be more money, but we've really moved into the big leagues in terms of how much it might take if Spain goes over the edge," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland. "It's not clear if the IMF or any other entity will have the money to prevent that."

Stocks finished lower Thursday, as a trifecta of downbeat U.S. economic reports overshadowed encouraging earnings results.

World markets: European stocks were higher in midday trading. Britain's FTSE 100 (UKX) rose 0.3%, while France's CAC 40 (CAC40) added 0.4% and the DAX (DAX) in Germany gained 0.9%.

Asian markets ended mixed. The Shanghai Composite (SHCOMP) added 1.2% and the Hang Seng (HSI) in Hong Kong edged higher 0.1%, while Japan's fell Nikkei (N225) 0.3%.

Companies: McDonald's (MCD, Fortune 500) shares gained 1.9% in premarket trading Friday after the fast-food giant reported earnings and revenue in line with expectations.

Technology manufacturer Honeywell (HON, Fortune 500) beat expectations on both earnings and revenue, and shares climbed 3.5%.

Microsoft (MSFT, Fortune 500) shares gained 3.6% after the company reported earnings Thursday that beat analyst estimates.

Shares of processor developer AMD (AMD, Fortune 500), which also beat expectations Thursday, rose 1.6%.

Flash memory producer SanDisk (SNDK, Fortune 500)'s stock fell more than 14% after the company missed earnings expectations in reporting its quarterly results Thursday and said it expected a similarly weak performance in the current quarter.

Currencies and commodities: The dollar fell against the euro and the British pound but gained against the Japanese yen.

Oil for May delivery rose 63 cents to $102.90 a barrel.

Gold futures for April delivery rose $4 to $1,644.60 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.98% from 1.95% late Thursday.  To top of page

Index Last Change % Change
Dow 17,356.87 288.00 1.69%
Nasdaq 4,644.31 96.48 2.12%
S&P 500 2,012.89 40.15 2.04%
Treasuries 2.15 0.08 3.72%
Data as of 4:39pm ET
Company Price Change % Change
Bank of America Corp... 17.26 0.54 3.23%
General Electric Co 24.66 0.17 0.69%
Apple Inc 109.41 2.66 2.50%
Cisco Systems Inc 26.81 0.22 0.85%
Microsoft Corp 45.74 0.58 1.28%
Data as of 4:00pm ET
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.04%4.13%
15 yr fixed3.04%3.09%
5/1 ARM3.22%3.22%
30 yr refi4.08%4.18%
15 yr refi3.11%3.16%
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