Why The Dow is Waiting for Tomorrow
At market open it looked like a good day for the market. All three indices were up in early morning trading, but quickly fell off to lunchtime lows. From there they fought back to ... basically flat.
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Hurry up and wait
Of course, the big news today isn't really about today, it's tomorrow. A large number of Dow components, five to be exact, are reporting before market open. I imagine shareholders aren't keen about moving one way or another until they can get a beat on those major players. So which companies should investors watch tomorrow? Du Pont (NYS: DD) , McDonald's (NYS: MCD) , Johnson & Johnson (NYS: JNJ) , Verizon, and Travelers are all reporting before the bell, so look for a lot of pre-market movement.
What to Expect?
Du Pont is the first to announce with an early-bird-only 6:00 am earnings release. Wall Street is expecting $0.33 per share, a large drop from the $0.50 reported at this time last year. Trading at a P/E of 13.4, the company seems fairly priced, though.
McDonald's is expected to post $1.29, a nice jump from the $1.16 posted last year. After a stellar 2011, the golden arches are certainly looking for a repeat performance. It will be tough to do purely domestically, though, so watch for language about their growth in China.
Johnson & Johnson was plagued with product recalls in 2011, but it'll certainly take more than that to derail them. Trading for 15x earnings and sporting a 3.5% dividend, they are a great company no matter what. Whether they meet, miss, or beat tomorrow, this company is around for the long haul.
How to play earnings tomorrow
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At the time this article was published Austin Smith owns shares of McDonald's The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter serviceshave recommended buying shares of Johnson & Johnson and McDonald's.Motley Fool newsletter serviceshave recommended creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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