Stocks rise in early trading, but are light despite continued strength in quarterly earnings. The bulls are having a hard time continuing the strength seen in October, but the bears aren't gaining much traction either. The tech sector got good news from Yahoo (YHOO) and SanDisk (SNDK), which has kept the Nasdaq (^IXIC) positive in early trading. Bank stocks provided mostly strong results with both Wells Fargo (WFC) and Morgan Stanley (MS) beating expectations, yet financials are struggling in early trading. The economic calendar is light Wednesday, though the Fed Beige Book could impact trading this afternoon.

YHOO reported earnings of 13-cents a share, 6-cents better than expected. Revenues fell 14.6 percent, but did come in slightly better than estimates. YHOO shares are up more than 4 percent in early trading Wednesday, but are running into resistance at their 52-week high just below $18. In the past year, YHOO shares have gained 35 percent. After the bell, traders will get results from another Internet giant when eBay (EBAY) reports.

SanDisk shares are up sharply this morning, rising to a new 52-week high above $23.25, a gain of nearly 9 percent. The flash memory card maker announced that revenues rose 14 percent in the third quarter, resulting in profits of 75-cents a share, blowing away estimates for earnings of 26-cents a share.

Wells Fargo reported earnings of 56-cents a share, 19-cents above estimates. Revenues were up 116.5 percent to $22.47 billion, easily surpassing estimates for $21.63 billion. There remain concerns about nonperforming loans and net charge-offs, which has kept gains in WFC shares down this morning. WFC shares have struggled this year, gaining less than 5 percent when the S&P 500 (^SPX) is up 21 percent. In early trading Wednesday, shares are slightly higher at a price near $31.

MS shares are seeing stronger gains this morning, up more than 5 percent. Morgan beat both top line and bottom line expectations and by a large margin. Revenues came in at $8.7 billion when economists were looking for $7.0 billion. Unlike Wells Fargo, MS shares have seen huge gains in 2009, rising more than 110 percent. Overall, the Financial Select Sector SPDR (XLF) is up about one percent near $15.35.

The Fed Beige Book is set for release at 2:00 PM ET and this could impact stock prices. This report provides insight to economic activity in the 12 Fed districts and is used by the FOMC to make monetary policy decisions.

Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

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