Intel's smokin' earnings. Who cares about housing? Positive corporate earnings and lower consumer inflation drive the Bulls!

10/17/2007 10:00 am ET

By Dave Harris

Earnings are in full swing and we have positive momentum in stocks after a few down days from higher oil prices and credit concerns. Today encouraging news from JP Morgan (JPM), Intel (INTC) and Johnson and Johnson (JNJ) and fresh economic data is adding juice to the upside.

Chip maker Intel (INTC) delivered a great quarter yesterday. Profit rose 43 percent or .31 cents per share from .22 cents last year. Results beat expectations. The company also expects about $11 billion in revenue for the 4^th quarter, that's well above expectations. I'm very impressed with their microprocessor sales. Plus, the personal computer market demand is high. The stock is up 1.13 this morning at 26.61. I think it's going higher to $30.

Bad news in housing is really no news at all, unless it's good. So today's report on housing starts and building permits is having little impact on the market. September housing starts fell 10.2 percent. Building permits fell to 1.23 million. Both these readings are the worst we've seen in over 14 years.

The September CPI rose a bit by .3 percent on higher food and energy costs. But I think Wall Street can be happy with the core figure, excluding food and energy, which rose .2 percent, in line with analyst views.

In other earnings news, the bank J.P. Morgan (JPM) exceeded expectations by reporting 2 percent higher net income for the third quarter. This company still has problems on the mortgage and corporate lending end. Wall Street likes the news here, sending the shares 1.63 higher now at 46.74. I like the stock. Wait a week and also consider Wells-Fargo (WFC). Yes they missed by a few pennies earlier this week, but net income has improved. If it goes down to $30, buy the stock.

Coca-Cola (KO) said strong sales generated a 13 percent increase in 3^rd quarter profit. If you want to own a beverage, buy Pepsi (PEP) instead. You'll also get the Frito-Lay snack business there.

Earlier this week Yahoo (YHOO) reported a 5 percent decline in the quarter, however the shares are rising. I can't get excited about a stock with declining earnings that happened to beat the analyst's lowered expectations. Google (GOOG) is the best of breed and going higher. It's at $625 on the way to $700.