S&P 500 dips as earnings top estimates, revenues decline

U.S. stocks continued to fall in early trading on Friday, a day after President Barack Obama’s bank restriction proposal, even as three industry titans beat earnings estimates.

Exelon(NYSE:EXC) is trading down 1.42 percent. General Electric (NYSE:GE) is trading up 4.12 percent and McDonald’s (NYSE:MCD) up 1.65 percent, but they failed to lift the stock market as basic materials and financial stocks dropped. The S&P 500 is down 5.02 points or 0.45 percent to trade at 1,111.46.

Conglomerate General Electric reported earnings of $1.03 per share for the year and $0.28 for the fourth quarter. The fourth quarter figured topped Wall Street expectations of $0.26. The earnings, however, were down 42 percent for the year and 22 percent for the quarter, compared to the fourth quarter of 2008.

Revenues for the year and quarter (year-on-year) were also down. The decline is mostly attributed to the huge declines in GE Capital. It dropped 67 percent for the quarter and 73 percent for the year. GE Capital provides loans to companies and consumers.

After being upgraded to “outperform” by Credit Suisse on January 19, McDonald’s reported earnings of $4.11 for the year, up 9 percent. Fourth quarter EPS was $1.11, beating estimates of $1.02 and up 28 percent year-on-year. Revenues are down 3 percent for the year but up 7 percent for the quarter, compared to the fourth quarter of 2008.

Credit Suisse upgraded McDonald’s partially on its potential for domestic share gains because it will “benefit from a continued consumer preference for value” as “unemployment is unlikely to return to pre-recession levels until after 2012”.

Utilities giant Exelon reported earnings of $0.92 per share for the fourth quarter, beating estimates of $0.86 but down from $1.07 in 2008. The annual EPS of $4.12 is down as well from $4.20 in 2008. Revenues were down both annually and quarterly compared to the fourth quarter of 2008. Exelon forecasts 2010 earnings of $3.60 to $4.00 per share.

Yesterday, President Obama’s proposal to restrict some banks’ involvement in trading and set market share limits on banks’ source of funding sent the market tumbling, with the S&P 500 index losing 22.2 points to close at 1,116.48.