Wells Fargo offers market vitamin

Marketplace Contributor Apr 9, 2009
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Wells Fargo offers market vitamin

Marketplace Contributor Apr 9, 2009
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TEXT OF INTERVIEW

Steve Chiotakis: Let’s bring in Marketplace’s Steve Henn for some due diligence on these numbers. Steve, we had thought stocks would be tepid today with retail numbers out. Give us the blow by blow.

Steve Henn: Well, last night Costco released its numbers, and they were a little bit worse than expected. Everyone was looking for Costco and Wal-Mart and these big discount chains to sort of blow us away and report that, you know, American consumers were shopping for bargains and retail sales, same-store sales were up. It really hasn’t panned out. Wal-Mart about an hour ago released some pretty disappointing same-store sales numbers. They underperformed what analysts were expecting pretty dramatically, and so, you know for some, it looked like this morning wasn’t shaping up to look so hot.

Chiotakis: So but now we have a rally going on, and that’s got a lot to do with Wells Fargo and this guidance that they put out, right?

Henn: Yeah, that’s right. You know, if this is our breakfast this morning, Wells Fargo fortified it with this guidance vitamin, right? Wells Fargo projected $3 billion in net profit for the first quarter, which was almost twice what analysts on Wall Street were looking for. The bank said it expects to earn 55 cents a share, that its purchase of Wachovia is going smoothly, that it’s earning lots of money right now from mortgages and mortgage refinancing. And its stocks shot up on this news more than 20 percent, and it brought all the other financials along with it. So it really sparked a pretty dramatic rally, which is what we’re seeing right now.

Chiotakis: Mmm. And last hour, Steve, of course we got unemployment numbers. Not so bad, right?

Henn: Well, it was a little bit of a surprise. Wall Street was expecting these numbers to be worse, about 654,000 people filed jobless claims last week. You know, and objectively that’s not a very good number. But many analysts thought it would be worse, so, you know, some folks are taking heart and thinking maybe, just maybe the labor market is beginning to show a little bit more strength. And if that’s true, that’s obviously good news for everybody.

Chiotakis: All right. Marketplace’s Steve Henn, joining us from Washington. Steve, thank you.

Henn: Sure thing.

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