The stock market lacked direction on Tuesday following some uneven corporate earnings news.
Most major indexes closed slightly lower, except for the Dow Jones industrial average. Yet even the Dow’s modest gain was a result of a 3 percent increase in one stock, United Technologies.
Better earnings from big banks, health insurers and other companies have helped drive the stock market higher this month. On Tuesday, however, the encouraging and the discouraging seemed evenly matched. Wendy’s and United Technologies surged after posting stronger results than financial analysts had expected. Netflix and the Altria Group, maker of Marlboro cigarettes, sank after their results fell short.
“In the absence of major economic news, the focus is on earnings this week,” said David Joy, chief market strategist at Ameriprise Financial. “And there’s nothing today to drive the market dramatically one way or another.”
The Dow industrials rose 22.19 points, or 0.14 percent, to 15,567.74. If not for the gain in United Technologies stock, the Dow would have closed down a point.
United Technologies jumped $3.01, to $105.12, after the conglomerate said strong orders for commercial airline parts and elevators helped lift its profit.
The Standard Poor’s 500-stock index fell 3.14 points, or 0.19 percent, to 1,692.39, backing off the nominal record closing high it set Monday. The Nasdaq composite index fell 21.11 points, or 0.59 percent, to 3,579.27.
It was a busy day for earnings as 35 companies in the S. P. 500 were scheduled to turn in results. The second-quarter scorecard looks good so far. More than six out of every 10 companies have posted earnings that surpassed Wall Street’s expectations, according to SP Capital IQ.
Analysts forecast that second-quarter earnings for companies in the S. P. 500 increased 3.8 percent over the same period last year.
“The bar has been set pretty low,” said Joel Huffman, senior portfolio manager at U.S. Bank Wealth Management. So it’s hardly a surprise that many companies are able to jump over it, he said.
Sales are another story. Analysts expect revenue to shrink 0.7 percent in the second quarter. Mr. Huffman said he was encouraged that many banks and makers of consumer-discretionary goods had reported stronger American sales. “It’s an indication of the underlying growth in the U.S. economy versus other parts of the world,” he said.
Apple shares rose 4 percent in after-hours trading, when the company reported earnings and revenue that beat Wall Street’s forecasts.
Among the stocks on the move, Wendy’s jumped 55 cents, or 8.2 percent, to $7.23. The fast-food company’s net income came in above Wall Street’s expectations. Wendy’s also announced plans to sell 425 restaurants as franchises and raised its quarterly dividend by a penny, to 5 cents.
The Altria Group said its quarterly results fell short of analysts’ expectations. Altria’s stock sank 89 cents, or 2.4 percent, to $35.99.
Netflix shares dropped $11.70, or 4.5 percent, to $250.26. The company said late Monday that it signed up fewer subscribers than financial analysts had projected. Big expectations have propelled Netflix’s stock up 170 percent since the start of the year, putting more pressure on the company to deliver amazing numbers.
In the bond market, interest rates moved higher. The price of the 10-year Treasury note dropped 6/32, to 93 15/32, while its yield rose to 2.51 percent from 2.48 percent late Monday.
Article source: http://www.nytimes.com/2013/07/24/business/daily-stock-market-activity.html?partner=rss&emc=rss
Speak Your Mind
You must be logged in to post a comment.