Benchmarks ended lower on Wednesday following disappointing
corporate results and economic data. AT&T, Amgen and Biogen
posted disappointing corporate results. Boeing and Gilead's
better-than-expected quarterly earnings failed to restrict the
day's losses. Decline in new home sales data also added to
the bearish sentiment.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) dropped 0.1% to close
Wednesday's trading session at 16,501.65. The Standard & Poor
(S&P 500) declined 0.2% to finish at 1,875.39. The tech-laden
Nasdaq Composite Index fell 0.8% to 4,126.97. The fear-gauge CBOE
Volatility Index (VIX) went up 0.6% to settle at 13.27. Total
volume for the day was roughly 5.67 billion shares, lower than
this month's average of 6.65 billion. Advancing stocks were
outnumbered by declining stocks on the NYSE. For 47% stocks that
advanced, 50% declined.
The day's disappointing corporate results had a negative impact
on the broader markets. Shares of AT&T, Inc. (NYSE:
) dropped 3.8% a day after reporting earnings results. The
company's first-quarter 2014 earnings of 71 cents per share beat
the Zacks Consensus Estimate by a penny.
Amgen Inc.'s (NASDAQ:
) first quarter 2014 earnings of $1.86 per share was more
than the Zacks Consensus Estimate by 5 cents, but 4.6% below the
year-ago earnings. Also, including one-time items, first quarter
earnings were down 26% to $1.40 per share. Shares of Amgen
Biogen Idec Inc. (NASDAQ:
) reported first quarter 2014 earnings per share of $2.45
(including the impact of stock-based compensation expense),
missing the Zacks Consensus Estimate of $2.58 per share. The
company said that first quarter 2014 earnings were impacted by
about 35 cents due to its new Alzheimer's disease collaboration
agreement with Eisai. However, shares of Biogen rose 0.2%.
Bio-tech companies Amgen and Biogen Idec's disappointing first
quarter 2014 earnings led to selling pressure in bio-tech stocks.
Shares of bio-tech stocks such as Vertex Pharmaceuticals
) and Celgene Corporation (NASDAQ:
) fell 2.0% and 1.2%, respectively.
However, bio-tech company Gilead Sciences Inc. (NASDAQ:
) made a strong start to 2014 as earnings outpaced expectations.
After market hours on Tuesday, Gilead reported first-quarter 2014
earnings (including stock-based compensation expenses but
excluding other special items) of $1.44 per share, outpacing the
Zacks Consensus Estimate of 75 cents per share. Moreover, first
quarter 2014 earnings were way above the year-ago figure of 45
cents per share. The massive growth in earnings was attributable
to the exceptional performance of Gilead's newly approved
hepatitis C virus (HCV) drug Sovaldi.
The Boeing Company (NYSE:
) delivered strong first quarter 2014 results backed by robust
deliveries. The aerospace giant reported adjusted first quarter
2014 earnings of $1.76 per share, beating the Zacks Consensus
Estimate as well the year-ago adjusted profit of $1.54 by 14.3%.
Shares of Boeing increased 2.4%.
After the closing bell, Apple Inc. (NASDAQ:
) and Facebook, Inc. (NASDAQ:
) reported upbeat quarterly results.
Discouraging new single-family home sales report from the U.S.
Census Bureau and the Department of Housing and Urban Development
also weighed on the benchmarks. Sales of new single-family houses
decreased 14.5% from February's revised rate of 449,000 to
seasonally adjusted annual rate of 384,000 in March. The drop was
in contrast to the consensus estimate of a rise to 451,000. Rise
in home prices was the reason behind the decrease in sales of new
Five out of 10 sectors of the S&P 500 ended in the red. The
SPDR S&P Homebuilders ETF (NYSE:
) led the decline among the S&P 500 sectors. The sector fell
1.4%. Key housing stocks from the sector such as PulteGroup, Inc.
), Lennar Corp. (NYSE:
), DR Horton Inc. (NYSE:
) and Beazer Homes USA Inc. (NYSE:
) fell 0.5%, 0.6%, 2.2% and 0.9%, respectively.