The blue chip index had a good week on the back of encouraging
earnings and economic data. Encouraging corporate earnings and
leading indicator numbers helped the Dow move upwards on Monday.
The Dow gained once again on Tuesday, riding on positive
Disappointing results and dismal home sales data pushed the
blue chip index lower on Wednesday. The Dow moved upwards on
Thursday, driven by encouraging corporate results and
better-than-expected durable orders. During the first four
trading days, the Dow has gained 0.32%.
Last week's Performance
The Dow lost 0.1% on Thursday following mixed corporate
results. The decline was largely due to dismal corporate results
The Goldman Sachs Group, Inc.
General Electric Co.
) reported better-than-expected corporate results.
The blue chip index gained significantly during the
holiday-shortened week, by 2.4%. All the benchmarks advanced for
the week, boosted by upbeat quarterly results and encouraging
economic data. Citigroup Inc.
The Coca-Cola Company
Johnson & Johnson's
) better-than-expected quarterly earnings had a positive impact
on the benchmarks.
Encouraging retail sales and industrial production data lifted
investor sentiment. Federal Reserve Chairwoman Janet Yellen's
speech in New York and better-than-expected Chinese economic data
were the other factors that encouraged investors.
The Dow This Week
The blue chip index returned to its winning ways on Monday.
Investors were encouraged by better-than-expected corporate
earnings. An increase in Conference Board's leading economic
index added to the bullish mood.The Conference Board's leading
economic index increased 0.8% in March after gaining 0.5% in
February. The Dow moved up 0.3%.
The Dow gained 0.4% on Tuesday, boosted by
better-than-expected corporate results.
United Technologies Corp.
) reported earnings from continuing operations of $1.32 per
share, more than the Zacks Consensus Estimate of $1.27 per share.
A modest fall in existing home sales data in March hardly
Benchmarks ended lower on Wednesday following disappointing
corporate results and economic data. Sales of new single-family
houses decreased 14.5% to seasonally adjusted annual rate of
384,000 in March. Shares of
) dropped 3.8% a day after reporting earnings results.
The Boeing Co.
) reported earnings higher than year-ago adjusted profit. Shares
of Boeing increased 2.4%, but failed to restrict the day's
losses. By the close, the Dow slipped 0.1%.
Markets gained on Thursday, driven by encouraging corporate
results and better-than-expected durable orders data. Positive
earnings results from bellwether
) also added to the bullish sentiment. However, the Dow finished
flat after disappointing first quarter earnings from
Verizon Communications Inc.
) restricted its advance.
Components Which Moved the Index
started the year on an impressive note once again, delivering
strong first quarter 2014 results backed by robust deliveries.
The company reported adjusted first quarter 2014 earnings of
$1.76 per share, beating the Zacks Consensus Estimate as well as
ahead of the year-ago adjusted profit of $1.54 by 14.3%.
The company's top line grew 8.3% year over year to $20,465
million in the reported quarter, beating the Zacks Consensus
Estimate of $20,305 million. Backlog at the end of the first
quarter decreased to $439.8 billion from $440.9 billion at the
end of 2013. Although the backlog declined sequentially, it grew
by $48.1 billion on a year-over-year basis.
reported first-quarter 2014 adjusted earnings per share of 71
cents, beating the Zacks Consensus Estimate by a penny. Earnings
improved 10.9% from the year-ago quarter's adjusted figure of 64
cents per share. The improvement was attributable to strong
wireless subscriber growth and instalment plan - AT&T
Quarterly adjusted operating revenues increased 3.6% from the
prior-year quarter to $32.5 billion, slightly ahead of the Zacks
Consensus Estimate of $32.4 billion. However, Post-paid ARPU
(average revenue per user) in the Wireless segment increased just
0.4% year over year.
reported first quarter 2014 earnings from continuing operations
of $1.32 per share versus $1.39 in the year-ago quarter. The
decrease in earnings was primarily due to restructuring costs.
The reported earnings per share (EPS) beat the Zacks Consensus
Estimate of $1.27.
Income from continuing operations for the quarter stood at
$1,213 million versus $1,270 million in the prior-year quarter.
Recurring EPS for the quarter increased 10.0% year over year to
$1.41 per share.
Total revenue for the first quarter edged up 2% year over year
to $14,745 million. The reported revenues were above the Zacks
Consensus Estimate of $14,683 million. The increase in revenues
was driven by organic growth, partially offset by divestiture and
adverse foreign exchange.
reported first quarter 2014 net income of $1,207 million or $1.79
per share compared with $1,129 million or $1.61 a share in the
year-earlier quarter. The reported earnings were in line with the
Zacks Consensus Estimate. The increase in earnings was driven by
Net sales during the quarter were $7.8 billion, up 2.6 % year
over year, but below the Zacks Consensus Estimate of $7.9
billion. The increase in sales was driven by 4.6% organic local
currency sales growth. However, the positives were partly offset
by currency impact of 2.0%. This factor increased costs, reduced
sales and the stock fell short of the Street's estimates.
reported first-quarter 2014 adjusted earnings of 84 cents per
share, missing the Zacks Consensus Estimate by 87 cents. However,
the bottom line improved from 68 cents earned a year ago.
First quarter earnings excluded the impact of after-tax gain
of 55 cents per share related to the sale of Verizon's minority
interest in Vodafone Omnitel, charges of 17 cents related to debt
redemption and interest and financing costs of 8 cents per share
related to Verizon Wireless transaction.
Total revenue increased 4.8% year over year to $30.8 billion,
and surpassed the Zacks Consensus Estimate of $30.7 billion. The
growth was driven by increasing demand for Verizon Wireless, FiOS
and strategic enterprise services
started the year with a bang by announcing a 22% increase in its
first-quarter 2014 earnings to reach $1.61 per share, trumping
the Zacks Consensus Estimate of $1.25. Caterpillar shares went up
as earnings surprised market expectations.
The construction and mining equipment behemoth delivered the
second quarter of positive earnings surprise following negative
earnings surprises in four straight quarters. The numbers
outshone the 5.5% increase reported in the fourth quarter 2013,
the only quarter to have recorded y-o-y growth last year. The
company had last witnessed earnings growth in the double-digit
range in the third quarter of 2012.
Performance of the Top 10 Dow Companies
The table given below shows the price movements of the 10
largest components of the Dow, which is a price weighted index,
over the last five days and during the last six months. Over the
last five trading days, the Dow has gained 0.60%.
Last 5 Day's Performance
6 month performance
Next Week's Outlook:
The last piece of home sales data is expected on Monday and
another decline will indicate that weakness in the sector will
continue. Ultimately, consumer confidence numbers and GDP data
will provide better indications about the economy. These reports
may also have a significant impact on the markets.
Earnings have dominated the week's proceedings but economic
data has also affected markets. In particular, the downtrend in
the housing sector has made its presence felt during one trading
session. However, as expected, markets have continued to notch up
gains. If earnings are largely on the positive side, stocks could
continue to move upwards.
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