Benchmarks ended mostly in the green on Thursday driven by
encouraging corporate results and higher-than-expected economic
numbers. The Nasdaq was boosted by strong gains in Apple, a day
after it reported better-than-expected earnings. However, the Dow
finished flat after Verizon Communications and 3M Company's
disappointing first quarter earnings restricted its advance.
Meanwhile, there were reports of military tension near the
APPLE INC (AAPL): Free Stock Analysis Report
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) remained flat at
16,501.65. The Standard & Poor (S&P 500) rose 0.2% to
finish at 1,878.61. The tech-laden Nasdaq Composite Index
increased 0.5% to 4,148.34. The fear-gauge CBOE Volatility Index
(VIX) went up 0.4% to settle at 13.32. Total volume for the day
was roughly 6.07 billion shares, lower than this month's average
of 6.59 billion. Declining stocks were outnumbered by advancing
stocks on the NYSE. For 47% stocks that declined, 49% advanced.
Benchmarks advanced for the day primarily boosted by Apple Inc.'s
) upbeat second quarter results, that were reported after the
closing bell on Wednesday. Shares of Apple jumped 8.2%, the
biggest gain since August. Apple reported quarterly earnings of
$11.62 per share, which beat the Zacks Consensus Estimate of
$10.22 per share by 13.8%. Revenues too rose 4.7% year over year
to $45.6 billion, well ahead of the Zacks Consensus Estimate of
$43.4 billion. In addition, the company announced additional
share buyback program, higher dividend payout and a surprising
7:1 stock split.
Apple's board of directors expanded the size of share buyback
program by another $30.0 billion to $90.0 billion. Apple also
increased its quarterly dividend payout by 8.0% to $3.29 per
share. The iPad maker also announced a 7:1 stock split that will
occur in June this year.
Facebook, Inc. (NASDAQ:
) too reported upbeat results after the closing bell on
Wednesday, The social media giant reported first quarter earnings
of 25 cents per share (discounting for stock-based compensation)
on $2.50 billion sales, beating expectations of 18 cents per
share and $2.36 billion in sales. However, shares of Facebook
dropped 0.8%. Overall, the Technology Select Sector SPDR (NYSE:
) rose 0.8%.
Positive earnings results from bellwether Caterpillar Inc. (NYSE:
) also added to the bullish sentiment. Caterpillar reported first
quarter 2014 earnings per share of $1.61, outpacing the Zacks
Consensus Estimate of $1.25 per share. Shares of Caterpillar rose
1.8%. After the closing bell, Microsoft Corporation (NASDAQ:
) also reported upbeat quarterly results.
However, bellwethers Verizon Communications Inc. (NYSE:
) and 3M Company (NYSE:
) failed to impress with their earnings results. Verizon
Communications posted first-quarter 2014 adjusted earnings of 84
cents per share, missing the Zacks Consensus Estimate of 87
cents. 3M Company reported first quarter 2014 earnings of $1.79
per share, in line with the Zacks Consensus Estimate. Shares of
Verizon Communications and 3M Company decreased 2.4% and 0.9%,
Coming to economic data, the US Census Bureau said new orders for
manufactured durable goods in March had increased 2.6%, its
biggest gain in four months. The increase in durable goods order
was also more than the consensus expectation of a 1.8% increase.
Excluding transportation, durable orders increased 2.0% in March.
Unfilled orders for manufactured durable goods in March were up
However, initial claims data was disappointing. The U.S
Department of Labor reported that seasonally adjusted initial
claims increased 24,000 to 329,000 in the week ending April 19.
This rise in application for unemployment benefits was more than
the consensus expectations of initial claims increasing to
Investors also kept a close eye on recent developments in
Ukraine. Russia started military drills near the borders of
Ukraine after Ukrainian forces reportedly killed five-pro Moscow
rebels. Earlier, in Kramatorsk, Ukrainian forces stormed an
airport held by pro-Russian militants. Ukraine's forces also
countered militants in the eastern Donetsk region. The U.S. has
supported Ukraine in its mission to uproot pro-Russian militants
occupying government buildings.
Six out of 10 sectors of the S&P 500 ended in the green. The
SPDR S&P Homebuilders ETF (XHB) led the advance as the sector
rose 1.1%. Key stocks from the sector such Key housing stocks
from the sector such as PulteGroup, Inc. (NYSE:
), Lennar Corp. (NYSE:
), DR Horton Inc. (NYSE:
) and Beazer Homes USA Inc. (NYSE:
) increased 2.3%, 3.5%, 8.3% and 1.9%, respectively.