Jim Cramer Blog

After two-straight lackluster days, stocks were in rally mode on Friday spurred by Microsoft's (Nasdaq: MSFT - News) explosive earnings report and Countrywide's (NYSE: CFC - News) forecasted return to profitability. The Dow posted a triple-digit gain to close at 13,807, up 135 points for the day. The Nasdaq and S&P also gained ground to finish the week at 2,804 and 1,535, respectively. Oil prices showed no signs up slowing with the cost per barrel closing at $91.90 for December delivery. Treasury prices rose on the day, and gold also finished up, ending at $783 an ounce for the week.

On the economic front, U.S. Treasury Secretary Henry Paulson downplayed the impact surging oil prices may be having on the economy, stating that the rise was "not a positive" but noting that employment and the economy were both still growing despite the recent increase in the price of oil.
Shares of Microsoft hit a six-year high today after the software giant blew past analyst estimates. In the most recent quarter, the company saw profit soar to $4.29 billion, or 45 cents per share, up 23% from $3.48 billion, or 35 cents per share, a year ago. Revenue for the quarter climbed to $13.76 billion, up 27% from $10.81 billion in Q3 last year and besting analyst revenue expectations by more than $1 billion. On a per share basis, analysts had predicted earnings of 39 cents. The stock closed up 9.5% on the day. Subscribers can read our take on Microsoft in today's edition.
Countrywide Financial swung to a third-quarter loss, but shares of the company rebounded on better forecasts. For the period, the mortgage lender reported a loss of -$1.2 billion, or -$2.85 a share, versus a profit of $648 million, or $1.03 a share, a year earlier. The sharp decline was fostered by a -$1.31 billion write-down from its mortgage banking unit. On average, analysts were looking for a loss of -$1.28 per share. Looking forward, Countrywide said it expects to earn between 25-75 cents per share in the fourth quarter. Analysts had been predicting Q4 earnings per share of 21 cents, with some forecasting a per share loss. Countrywide's stock soared higher on the guidance, closing up 32.3% at the bell.
Chinese search engine company Baidu.com (Nasdaq: BIDU - News) said profits more than doubled in the third quarter led by a strong traffic numbers. The company announced quarterly profits of 181.7 million yuan ($24.2 million), up from 85.3 million yuan reported last year. On a per share basis, Baidu saw earnings of 5.23 yuan (70 cents), up from 2.46 yuan a year earlier. Excluding one-time charges, the company earned 5.38 yuan per share, or 72 cents. Revenue for the quarter increased to 496.5 million yuan ($66.3 million), up from 237.6 million yuan last year. Baidu shares traded 5.7% higher for the session.
In corporate news, shares of Merrill Lynch (NYSE: MER - News) moved higher amid speculation that its CEO, Stanley O'Neal, may soon be exiting and that the firm may be considered a takeover target. The rumors were welcomed by investors who saw the company's stock drop after its weak earnings report earlier in the week that included a massive -$7.9 billion write-down. The stock finished up 8.2% on the day.

By the BullMarket.com Staff

Labels: Baidu.com Inc., BIDU, CFC, Countrywide Financial Corp., MER, Merrill Lynch and Co. Inc., Microsoft Corp., MSFT