Benchmarks finished hardly changed on Thursday as investors
received mixed corporate results as well as encouraging economic
data. Morgan Stanley, General Electric, Goldman Sachs and Pepsi
reported upbeat quarterly results. However, the Dow closed
in negative territory following IBM and UnitedHealth Group's
dismal earnings report. Google's disappointing earnings
also weighed on the markets. Positive economic data on
unemployment-insurance benefits and a gauge of manufacturing
sentiment in the Philadelphia region were some of the bright
spots of the day.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) dropped 0.1% to close
Thursday's trading session at 16,408.54. The Standard & Poor
500 (S&P 500) rose 0.1% to finish at 1,864.85. The tech-laden
Nasdaq Composite Index went up 0.2% to 4,095.52. The fear-gauge
CBOE Volatility Index (VIX) plunged 5.8% to settle at 13.36.
Total volume for the day was roughly 6.10 billion shares, lower
than this month's average of 6.88 billion. Declining stocks were
outnumbered by advancing stocks on the NYSE. For 41% stocks that
declined, 56% advanced.
The day's upbeat quarterly results had a positive impact on the
broader markets. Morgan Stanley's (NYSE:
) earnings per share from continuing operations of 68 cents
outpaced the Zacks Consensus Estimate and prior-year quarter
figure of 60 cents
Also, The Goldman Sachs Group, Inc.'s (NYSE:
) first-quarter 2014 earnings per share came in at $4.02, beating
the Zacks Consensus Estimate of $3.43.
Diversified conglomerate General Electric Company (NYSE:
) and food/beverage giant Pepsico, Inc.'s (NYSE:
) better-than-expected corporate results also added to the
bullish mood. General Electric posted first quarter 2014
operating earnings of 33 cents a share, beating the Zacks
Consensus Estimate by a penny.
Pepsico topped the Zacks Consensus Estimate on both top and
bottom lines. Pepsi's first-quarter 2014 core earnings per share
of 81 cents beat the Zacks Consensus Estimate by about 8.0%.
Revenues beat the Zacks Consensus Estimate of $12.47 billion by
Shares of Morgan Stanley, Goldman Sachs, General Electric and
Pepsico increased 2.9%, 0.1%, 1.7% and 0.9%, respectively.
However, the blue-chip index ended lower, dragged down by
International Business Machines Corporation (NYSE:
) and UnitedHealth Group's (NYSE:
) dismal corporate results. IBM reported disappointing revenues
in the first quarter of 2014, which missed the Zacks Consensus
Estimate for the fifth straight quarter. IBM's first-quarter
revenues of $22.48 billion declined 3.9% from the year-ago
quarter and 18.8% on a sequential basis. However, earnings of
$2.54 per share were in line with the Zacks Consensus Estimate.
UnitedHealth Group reported first-quarter 2014 operating earnings
of $1.10 per share, a penny ahead of the Zacks Consensus
Estimate. However, the U.S. health insurer's earnings decreased
from $1.16 per share earned in the year-ago quarter. Shares of
IBM and UnitedHealth Group dropped 3.3% and 3.1%, respectively.
Also, Google Inc.'s (NASDAQ:
) earnings of $5.33 per share (including traffic acquisition
costs) missed estimates by 17.6%. Shares of the tech-giant lost
Investors welcomed data on manufacturing sentiment in the
Philadelphia region and initial claims. The Philadelphia Federal
Reserve's manufacturing index surged to 16.6 in April from 9.0 in
March. The surge was more than the consensus expectation of an
increase to 9.5. It also stated that demand for manufactured
goods as measured by new orders index increased to 14.8.
Separately, the U.S Department of Labor reported that seasonally
adjusted initial claims increased 2,000 to 304,000 in the week
ending April 12. However, this rise in application for
unemployment benefits was less than the consensus expectations of
initial claims increasing to 318,000.
Both the Dow and the Nasdaq gained 2.4% during the
holiday-shortened week. The S&P 500 gained 2.7%, its best
weekly gain since July 2013.
Benchmarks advanced for the week primarily boosted by upbeat
quarterly results and encouraging economic data. Citigroup Inc.
), The Coca-Cola Company (NYSE:
) and Johnson & Johnson's (NYSE:
) better-than-expected quarterly earnings had a positive impact
on the benchmarks. Yahoo! Inc.'s (NASDAQ:
) higher revenues also contributed to the bullish mood. The
week's encouraging retail sales data and industrial production
data were cheered by the investors. Federal Reserve Chairwoman
Janet Yellen's speech in New York and better-than-expected
Chinese economic data were the other factors that boosted
Six out of 10 sectors of the S&P 500 ended in the green. The
Energy Select Sector SPDR (XLE) led the advance as the sector
rose 0.9%. Key stocks from the sector such as Exxon Mobil
), Chevron Corporation (NYSE:
), Occidental Petroleum Corporation (NYSE:
), EOG Resources, Inc. (NYSE:
) and ConocoPhillips (NYSE:
) increased 0.5%, 1.5%, 0.8%, 1.4% and 1.3%, respectively.