As I said a few days ago, the best shot for upward momentum (heck the only shot) is solid earnings. Well, thats what we're getting. Wells Fargo(WFC), United Technologies(UTX), JP Morgan(JPM), Nokia (NOK). Add that to severe pessimism and oversold conditions, and we were due for a bounce. The question is can we hold this momentum and carry it for awhile? If earnings continue to surprise, I think that answer is yes.
The solid results from Nokia are encouraging. Their valuation has gotten so cheap because of fears of the iphone hurting their sales, among other things. Here are a few quotes from the announcement:
"Looking at the rest of the year, we are optimistic and have had good feedback about the broad range of new products we expect to sell in our device business," Nokia Chief Executive Olli-Pekka Kallasvuo said in a statement."
In terms of volume, company had its biggest sales growth in Asia, Latin America, the Middle East and Africa. Sales of Nokia phones were up 10 percent in North America and flat in Europe.
However, the closely watched average selling price of Nokia phones continued to fall because of higher volumes of cheaper phones sold in emerging markets and a negative impact of the weak dollar, Nokia said.
The average price for a Nokia handset was $117, down from $125 in the first quarter of the year and $143 in the second quarter of 2007.
I think there are more gains to be had here. Its a solid stock at a good valuation. They have a strong global brand, which continues to strengthen.
As for the rest of the market, we'll see what earnings brings us.
Disclosure: Long NOK.