After The Close - The U.S. stock market was mixed for much of the session, but managed to stage a late-day advance. At the close, The Dow Jones Industrial Average finished up 13 points (0.1%); the S&P 500 Index made its way into positive territory, closing up four points (0.3%); and the tech-heavy NASDAQ, which led the charge higher again, tacked on 26 points (0.7%). Market breadth ended with a positive showing, as advancing stocks outnumbered decliners on both the NYSE and the NASDAQ.
The market sectors were divided for much of the day, but improved as the session progressed. Basic materials stocks edged higher, helped by gains in the paper issues. The healthcare sector, too, did well, as the biotechnology stocks came roaring back. Also, the utilities had a good day. But, some industrial issues were weak, with losses in the building-related names. Some consumer names also lagged.
Technically, the market has put in a few mixed sessions lately, which is understandable given the strides made over the past several months. It may take a few attempts to push the S&P 500 Index above the 1,700 mark. The earnings releases have, no doubt, helped support the market, but eventually the flow of reports will slow down, and some catalyst may be needed for further gains. Notably, stocks, on average, are now trading a price-to-earnings multiples that may be a bit elevated, and this could make further gains harder to produce.
Traders received a few economic reports this morning that likely influenced the session. Specifically, initial jobless claims for the most recent week came in at 343,000, which was up slightly from the prior week’s reading, and also slightly higher than had been anticipated. This report may have some traders concerned about the June employment report slated to be released next Friday. Elsewhere, durable goods orders improved 4.2% in June, far better than expected. Tomorrow, will be a light day for economic news.
In corporate news, we heard from numerous widely-watched companies. In technology, Facebook (FB) stock jumped, on a better-than-expected report. Qualcomm (QCOM) shares also moved forward on a good release. In healthcare, Biogen (BIIB) stock ended higher, as that company exceeded expectations. However, in housing, D.R. Horton (DHI) put out mixed numbers and that stock moved lower. -Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.-
12:30 PM EDT - Stocks are trading somewhat lower, on balance, thus far today, in what has been almost an instant replay of the trends exhibited on Wall Street yesterday. At noontime on the East Coast, the Dow Jones Industrial Average is off by 71 points, but the NASDAQ is up a handful of points. Similarly, the advance-decline line on the New York Stock Exchange shows more stocks falling than rising, but the reverse is true on the NASDAQ.
This morning’s session did receive the support of favorable economic news, in the form of a better-than-expected report ondurable-goods orders for June and a tame reading on weekly initial unemployment claims. But investors are apparently not overly enamored with corporate earnings performances which, although for the most part have exceeded expectations, have been clearing a bar set not too high to begin with.
Still, it is nice to note that there are a few big winners today. One of them is Facebook (FB), whose shares are surging after a very positive earnings release last night. The news on Facebook seems to be helping other technology stocks.
Other notable gainers in the tech space include the shares of F5 Networks (FFIV). The network gear provider raised its profit forecast on strong demand for new offerings. Baidu (BIDU) stock also soared when the Chinese-language Internet search provider reported a nice rise in revenues from its mobile-services division. There had been concerns that the company was losing market share to rivals.
On the Big Board, Boston Scientific (BSX) stock is today’s most actively traded issue. The medical device maker turned in an upbeat profit report and raised its guidance, owing to signs that demand for its defibrillators and stents is rising.
Also moving higher are shares of ONEOK (OKE). The energy company’s proposal to spin off its natural gas distribution business pleased Wall Street. Elsewhere, takeover speculation seems to be behind a rise in Airgas (ARG) stock, following a move by the distributor of industrial gases to adopt a stockholder rights plan.
But, there are also some notable losers on the day, and the overall tone to trading is muted. One stock having a tough time of it is PulteGroup (PHM), after the homebuilder reported bottom-line results that fell short of analysts’ expectations.
Heading into this afternoon’s session, sentiment towards stocks retains the tentative feel that has been in force for much of this week. -Robert Mitkowski
At the time this article was written, the author did not have a position in any of the companies mentioned.
Stocks to Watch from The Survey – Earnings season is in full swing, and today’s biggest winners appears to be Internet stocks. Facebook (FB) is leading the charge, after the social network operator delivered better-than-expected second-quarter sales and earnings, thanks to strong growth in mobile and local ad sales. FB stock is surging in the premarket as a result. Investors were also very impressed with quarterly results from online travel site TripAdvisor (TRIP) and China-based Internet search provider Baidu (BIDU), and both of these stocks are up sharply ahead of the bell. Other issues indicating higher openings this morning on earnings news include medical supplies company Boston Scientific (BSX), automaker General Motors (GM), credit card processor Visa (V), telecommunications equipment company Qualcomm (QCOM), restaurant operator Dunkin’ Brands Group (DD), chemicals company Dow (DOW), and athletic apparel and accessories maker Under Armour (UA).
Of course, investors were not pleased with every earnings report, especially the one from footwear company Crocs (CROX), which is seeing its shares plunge in pre-market trading. Other equities, such as diversified manufacturer 3M Company (MMM – Free 3M Stock Report), restaurant operator The Cheesecake Factory (CAKE), AkamaiTechnologies (AKAM), which provides services for the delivery of content and business processes over the Internet, and homebuilder PulteGroup (PHM), are showing more moderate declines ahead of the bell. – Matthew E. Spencer
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before The Bell - It was not supposed to be this way. Specifically, after Wall Street's worst fears were not realized following the conclusion of trading on Tuesday afternoon, as tech icon Apple Inc. (AAPL) posted generally investor-friendly results, it had been expected that equities would get a notable lift at the open yesterday morning. After all, Apple stock and the NASDAQ futures had suggested as much in the after-hours session on Tuesday and before the opening bell yesterday.
And, in truth, stocks did start out on the upside, with the NASDAQ jumping up almost 30 points at the outset, led, not surprisingly, by the aforementioned Apple. That strength, though, never really extended to the Dow Jones Industrial Average, with that 30-stock composite gaining fewer than 40 points at its best levels in the early morning, a notably lesser percentage gain at its peak than on the NASDAQ.
By mid-morning, even following a better-than-expected report on new home sales for June, with such transactions rising by 8.3%, to a five-year high, the market could not sustain its initial gains. Gradually, the averages weakened, so that by noon on the East Coast, the Dow was in the red and the gains on the NASDAQ had been whittled away. Finally, in early afternoon, that tech-heavy index fell modestly into the red. Some back-and-forth activity then followed over the final couple of hours of trading. Still, the weak advance-decline ratio, sustained throughout the day, held, and that gave the market a soft undertone. By the close, the laggard Dow Jones Industrial Average had eased by 26 points, with a late, and rather half-hearted, round of buying helping to limit the damage. That index had earlier just missed another all-time high. The broader Standard and Poor's 500 Index, meantime, shed six points. Only the NASDAQ, abetted by a 22-point gain in Apple, managed to end the day little changed.
One factor arguing again the market making further strides yesterday was that other tech names didn't follow Apple, as has been the case earlier in the past year when that stock had briefly surged to above $700. Now, Apple is less of a leader on the upside. Further, a succession of positive earnings reports, including yesterday's supportive metrics from aerospace and defense giant Bowing (BA – Free Boeing Stock Report), likewise failed to light a fire under the other industrial groups, with that issue closing slightly lower following an early buying spurt. Then, too, the strength enjoyed by the troubled basic materials stocks on Tuesday, namely the steels, the coals, and the diversified metals stocks, did not continue yesterday, as the group was again hit especially hard. That also dampened bullish sentiment. Finally, the Standard and Poor's 500 Index, which came to within a whisker of 1,700, could not surmount that psychologically significant round number--at least not yesterday--peaking at 1,698 on an intraday basis. That failure, too, didn't help the bullish cause.
Also falling yesterday was gold, following its dramatic heroics over the past fortnight. Silver likewise fell, as did the fixed-income market on a less-than-compelling five-year Treasury note auction. In all, the yield on the 10-year Treasury note jumped to 2.59%, after having climbed to 2.63% early in the day, while the yield on the companion 30-year Treasury bond also headed higher, closing at 3.65%, after having hit 3.69% in intraday trading. (Note that bond yields and prices move in the opposite direction.)
Of course, some of the news was reassuring, as quarterly earnings again came in at or above expectations for much of Corporate America, with the few obligatory misses often being dealt with harshly, as was the case with Dow component Caterpillar (CAT – Free Caterpillar Stock Report), which fell back in price yesterday.
Now a new day dawns, and after generally lower sessions in Europe this morning, our futures are showing more red arrows, with the NASDAQ, abetted by a strong showing by Facebook (FB) helping that index to inch into the black. Facebook shares are indicated to open some 30% higher this morning. As to other influences, the Commerce Department has just chimed in with a report showing an increase in orders for durable goods in June. That better result, which was expected, has not done much to support the futures, which, as noted, are now pointing to some further early profit taking, especially in the Dow and the S&P. – Harvey S. Katz
At the time of this article's writing, the author did not have positions in any of the companies mentioned.