U.S. Stocks Rally, Dow Jumps Most in Three Months, on Intel

[denem]

Source: Bloomberg

July 15 (Bloomberg) -- U.S. stocks rallied, sending the Dow Jones Industrial Average to its best gain in three months, after Intel Corp. forecast sales that beat analysts’ estimates and gauges of manufacturing improved. Treasuries fell for a third day and the dollar and yen dropped.

Intel jumped 7.3 percent, the most since March, after saying computer makers boosted chip orders in anticipation of stronger demand. General Electric Co. and Caterpillar Inc. added at least 5.2 percent as the Federal Reserve’s gauge of New York manufacturing and better-than-expected industrial output spurred optimism the economy is recovering. American Express Co. surged 11 percent after saying write-offs will be less than forecast.

The S&P 500 added 3 percent to 932.68 at 4:05 p.m. in New York, extending its biggest three-day advance since March. The Dow climbed 256.72 points, or 3.1 percent, to a one-month high of 8,616.21. The MSCI World Index of 23 developed nations surged 2.8 percent, the most since April 9.

“There’s no doubt that the catalyst started with the report from Intel,” said Tom Wirth, senior investment officer at Chemung Canal Trust Co., which manages $1.5 billion in Elmira, New York. “It seems obvious to me that there’s more optimism, that we’ve seen the bottom and things are getting progressively better.”

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a6Zuiij9HAGo

---

"We’ve seen the bottom and things are getting progressively better"? The uncelebrated shadows of barely hidden Hoovervilles grow more slowly, perhaps.

[truthisfreedom]

1. Computers must be breaking down at a phenomenal rate.

[denem]

2. The Vista recovery.

I have to admit it's getting better, a little better all the time, It can't get no worse.

[dixiegrrrrl]

4. Actually, this is what happened

Deninnger took Intel's profit statement apart, and found the real truth:

The bigger problem for Intel is its P/E - now well over 20, its just too high - unless we get a very strong economic recovery.
Sequential revenue was up $879 million dollars. But compared to a year ago it was down $1.4 billion - and remember, the recession began in December 2007!
it tells us that the recession is deeper now (for Intel) than it was in the second quarter of last year.

Additionally, selling price, even excluding the Atom, was down slightly on a per-piece basis, telling us that customers are "shifting down" the price scale.

Also important was guidance: The firm intends to continue to spend heavily on R&D (good), up slightly. It expects a "seasonal" expansion in demand and revenue (in other words they believe people will still buy computers to go back to school, etc.) But capital spending is expected to be down by 10% or $500 million, which does not bode well for expansion of output capacity (nor for semiconductor fab equipment suppliers!)

full details at link, article is last of 3 on the page.
http://market-ticker.denninger.net/archives/P1.html

[truedelphi]

5. Thank you for this information. n/t

[denem]

7. Faulty Logic by Deninnger

"... compared to a year ago (earnings were) down $1.4 billion ... tells us that the recession is deeper now (for Intel) than it was in the second quarter of last year."

As indeed do the market indices: July 18 2008, S&P500 1260.68, July 15, 2009 932.68. The Question is whether the recession was deeper in the second quarter of THIS year when properly compared with the first.

[gratuitous]

3. Clearly, President Bush's policies were working today

Just trying to get a jump on Fox & Friends' breathless reportage for tomorrow.

[goclark]

12. Let's send him a thank you note

for leaving our country in such great shape. :sarcasm:

[taught_me_patience]

6. Sucker's rally

all of Intel's "growth" (revs were down 20% yoy) was in Asia.

[denem]

8. Nope. US earning rose solidly compared with Q1.

[taught_me_patience]

9. Q2 vs. Q1 doesn't mean shit

Q2 2009 vs. Q2 2008 was down 20%.

[taught_me_patience]

10. CIT - Dead

http://finance.yahoo.com/news/CIT-Announces-That-bw-984603536.html?x=0&.v=1

Green Shits abound.

[KoKo]

11. But...it was all based on "Low Volume" once again. They want our money

that's under the mattress and that of those who jumped into CD's and Treasuries after the BOMB.

It's all just Media Spin. No volume but put out a "teaser" that you should call your 401-K or IRA Administrator and tell them "It's time to get me back in!"

The wish and dreams of "Green Shoots" that are "Brown Manure" just keeps being pushed and pushed. "They" figure that one day the SUCKERS are gonna come back...if they keep pushing their lies.

:-( Yeah...I'm a "Perma-Bear."

[WriteDown]

13. Who is this "they" you speak of?

Obama? Geitner? Cheney?