After The Close - The U.S. stock market put in a mixed performance today. At the close of the session, the Dow Jones Industrial Average was off 27 points; while the broader S&P 500 Index was higher by almost three points; and the NASDAQ was ahead 18 points. Market breadth showed a divided market, with advancing stocks just slightly ahead of decliners on the NYSE. Nonetheless, many equity sectors managed to make progress. Specifically, the healthcare group moved higher, fueled by gains in the biotechnology names. Too, the energy group performed well. In contrast, the industrials weighed down the market, as there were sharp losses in the aerospace area. The utilities also encountered some selling. While the broader technology sector managed to hold up well, it should be noted that many of the semiconductor issues were off sharply on the day.
The broader stock market continues to drift higher. However, it should be noted that we have seen numerous choppy sessions, and progress has been harder to come by of late. The second-quarter earnings season, which has been positive for the most part, has likely helped drive the market higher. Nonetheless, expectations have been quite high, and much of the good news now coming out may well have been factored into stock prices. The S&P 500 Index is currently at 1,987, and the widely-watched 2,000 mark is in clear view. Hitting this level will, no doubt, be the next target for the bulls. This may also represent an area of some resistance, and it could be hard to surpass on the first attempt.
Meanwhile, traders received little economic news this morning. Tomorrow will be a busier day for reports. Specifically, the weekly initial and continuing jobless claims are due out. Also, new home sales for the month of June are set to be released. On Friday, durable goods orders for June will be issued. It should be noted that the market seems to be taking recent developments overseas in stride. The problems in Ukraine and in the Middle East, while uncertain, seem to have stabilized, at least for today.
Finally, traders received quite a few favorable corporate reports this morning. So far, the second-quarter earnings season has been encouraging. However, there is still much more to come. Stay tuned. - Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
12:00 PM EDT - The middle day of the trading week started off in directionless fashion for investors, with a mixed bag of heavy earnings news giving both the bulls and the bears something to run with over the first 90 minutes of the session. However, within the last hour the buying has picked up some, pushing most of the 10 major sectors into positive territory, and the advance/decline data are now in favor of the former on both the Big Board and the NASDAQ. As we pass the midday hour, the S&P 500 Index, the NASDAQ, and the small-cap Russell 2000, which were largely higher from the start, are holding their gains. Meantime, the Dow Jones Industrial Average—lower to start the day primarily on weakness in shares of Boeing (BA), which reported earnings today (see below)—has pared most of its those losses and is now not too far removed from the neutral line. Investors should note that the S&P 500 Index is flirting with a new all-time high and currently sits about a half-percentage point from the psychologically significant 2,000 mark.
As noted, most of the top sectors are now in positive territory, with leadership coming from the healthcare, technology, and basic materials groups. The healthcare stocks are getting a boost from strength in the shares of the biotech and medical equipment making companies, including IntuitiveSurgical (ISRG); Apple (AAPL) shares are leading the technology issues higher; and the metals stocks are showing strength in the materials area. Conversely, the one notable laggard today among the top-10 sectors is the more-defensive utilities. Overall, investors seem to be trading on the mostly positive news from Corporate America, while shrugging off the international concerns about the Middle East and Eastern Europe. Technically speaking, the S&P 500 Volatility Index (or VIX) is down notably once again today.
The primary market catalyst in recent days has been the plethora of earnings news from Corporate America. So far during the second quarter earnings season, each day has seemed to bring more good than bad news. Today, as noted, the market is getting a boost from technology giant Apple. Of late the technology has been a big winner; the S&P 500 technology sector is currently at its highest level since November, 2000. The investment community also liked what it saw from Pepsico (PEP) in the latest quarter, and are pushing the shares of beverage giant higher. However, the Pepsico report has not given much of a boost to the consumer staples stocks, which are so far putting in a lackluster showing. And, as noted, Boeing (BA - Free Boeing Stock Report) stock is lower even though the aerospace giant beat earnings expectations and up its guidance. A dip in the Dow-30 company’s commercial airline backlog may have investors a bit concerned.
Meantime, it has been a quiet day on the business beat, with no issuances of note. That will change tomorrow when we get the latest data on new home sales. That report, which is historically a bit more volatile than the existing home sales data, will be closely monitored, as the homebuilding and housing sectors are an important cogs in the nation’s economic production. Shares of the major homebuilders are trading nicely higher today ahead of the new home sales data. - William G. Ferguson
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Stocks to Watch from The Survey – It's another busy day on the earnings front, with the most recent batch of reports headlined by two technology icons, Apple (AAPL) and Microsoft (MSFT - Free Microsoft Stock Report), both of which released June-period financials after the market closed yesterday. Neither company blew investors away, but results were solid, overall. Apple said that iPhone sales were strong, especially in developing countries, and earnings came in ahead of estimates. However, the company's revenue outlook for the September period appeared a bit light, and AAPL stock is up just slightly ahead of the bell. Microsoft, on the other hand, delivered weaker-than-anticipated earnings, largely due to costs associated with its acquisition of mobile phone developer Nokia. However, Wall Street appeared pleased with management's decisive turnaround plans for that underperforming division, as well as demand for the company’s cloud-based services, and MSFT shares are up modestly in the premarket, as a result.
Investors appeared more impressed with results and/or outlooks from medical devices manufacturer Intuitive Surgical (ISRG), drugmaker Biogen Idec (BIIB), aerospace and defense giants Boeing (BA - Free Boeing Stock Report) and General Dynamics (GD), software developer VMware (VMW), airline operator Delta (DAL), beverage and snack giant PepsiCo (PEP), and chemicals manufacturer Dow (DOW). Indeed, all of these stocks are indicating higher openings this morning, led by shares of ISRG.
Of course, not all of the earnings reports were upbeat. Notable disappointments came from diversified software, services, and information technology company Unisys Corp. (UIS), Xilinx (XLNX), a designer and developer of complementary metal-oxide-silicon (CMOS) programmable logic devices, telecommunications equipment company Juniper Networks (JNPR), appliance maker Whirlpool (WHR), video game developer Electronic Arts (EA), household products company Tupperware Brands (TUP), and drugmaker GlaxoSmithKline (GSK). These equities are moving lower ahead of the bell, with UIS and XLNX showing the most weakness. – Matthew E. Spencer
At the time of this article’s writing, the author had positions in AAPL.
Before The Bell - The Monday-Tuesday reversal, in which stocks move in opposite direction for the first two days of a trading week, was in evidence yet one more time yesterday. To wit, after the market turned in a modestly weaker performance on Monday, as international fears rose in the wake of the recent shooting down of a jet over Ukraine and stepped up fighting in Gaza, the stock market settled into a more bullish pattern yesterday.
It is not as though the global concerns had dissipated, or even seen a reduction in intensity. It was just that after a light economic news day on Monday and a somewhat less busy session for earnings releases, these twin supports were back in force yesterday. Specifically, we saw the release of a comparatively benign report on consumer prices an hour before the stock market opened for business on our shores, especially if we back out the volatile energy component from the mix. Then, some 30 minutes into the session, the National Association of Realtors chimed in with a report showing a modest sequential gain in June for sales of existing homes. That metric climbed just narrowly above 5.00 million homes sold on an annualized basis, while prices also gained somewhat, thereby partially countering a decline last month in housing starts and building permits. That latter report was issued last week. The existing home sales report was slightly better than expected, moreover, suggesting that this key sector remains in a solid recovery mode, with only some backing and filling along the way.
Thus, armed with these generally supportive figures, and also boosted by largely decent, albeit not exceptional, profit issuances, as quarterly reporting season intensifies, with six Dow-30 releases, alone, investors continued to be pleased. All told, most of those Dow results were in line with forecasts, evoking just moderate reaction. However, there were other corporate reports and some anxiousness ahead of a pair of key profit issuances after the close of trading (see below) that were on the minds of investors. And optimism on those fronts helped to boost equity prices, throughout.
In fact, it was a wire-to-wire win for the bulls, as the major large-cap, mid-cap, and small-cap benchmarks all strengthened over the course of the day, gaining some added traction near the close. By the finish line, the Dow Jones Industrial Average had more than made up for Monday's slight retracement, gaining a formidable 62 points on the day. Gains of 10 points and 31 points were also fashioned by the Standard and Poor's 500 Index and the NASDAQ, respectively. Similarly strong performances were authored by the S&P Mid-Cap 400 Index and the small-cap Russell 2000 Composite. Most stock groups rose nicely, led by technology, as gaining stocks easily out distanced losing issues on the day. It continues to be hard to keep the bulls down.
Then, after the close a pair of heavyweights issued their latest results. Specifically, Apple Inc. (AAPL) released results showing that the tech icon earned $1.28 a share, which was a nickel better than forecasts. In general, iPhone sales surged, but iPad revenues languished. The stock, in response, is suggesting a nominally better opening this morning. Then, software giant and Dow-30 member Microsoft (MSFT - Free Microsoft Stock Report) issued its results. Here, the company earned less than expected, but added that an economically sound approach would be put into place going forward. That high-quality stock, in response, rallied in aftermarket trading, and those gains continue in the pre-market session this morning.
Now, after yesterday's fireworks and aftermarket movements, we face a day in which there are no issuances of note, although there is no shortage of quarterly income releases, including results from a pair of Dow-30 stocks and other notable corporations. Investors will be overwhelmed with quarterly top- and bottom-line results for at least the next fortnight.
As to the markets thus far today, we saw some positive moves overnight in Asia, save for a minor setback in Japan, while in Europe, the bourses are pressing higher. Finally, on our shores, the equity futures are all headed nicely high at this time, suggesting a better opening when trading gets under way in less than an hour from now.