Stock Market News for July 23, 2014 - Market News

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Benchmarks settled in the green on Tuesday banking on encouraging housing data and upbeat corporate earnings results. Investors were encouraged by strong existing home sales data that hit the highest level since Oct 2013. Earnings results from Chipotle Mexican Grill, Comcast and Verizon Communications were also encouraging.

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The Dow Jones Industrial Average (DJI) advanced almost 0.4% to finish at 17,113.54. The Standard & Poor 500 (S&P 500) rose 0.5% to 1,983.53. The S&P 500 touched an intraday record high of 1,986. The tech-laden Nasdaq Composite Index closed at 4,456.02; gaining 0.7%. The fear-gauge CBOE Volatility Index (VIX) dropped almost 4.5% to settle at 12.24. Total volume for the day was roughly 5.05 billion shares, lower than this month's average of 5.56 billion. Advancers outpaced declining stocks on the NYSE. For 66% stocks that advanced, 30% declined.


The National Association of Realtors reported existing home sales rose 2.6% to a seasonally adjusted annual rate of 5.04 million in June from May's upwardly-revised figure of 4.91 million. This was also more than the consensus estimate of 4.98 million. Existing home sales rose for the third consecutive month in June, touching the highest level since Oct 2013.

The SPDR S&P Homebuilders (XHB) advanced 1.3%, the biggest gainer among the S&P 500 sectors. Key housing stocks from the sector such as DR Horton Inc. ( DHI ), Toll Brothers Inc. ( TOL ), PulteGroup, Inc. ( PHM ), Lennar Corp. ( LEN ) and KB Home ( KBH ) increased 1.9%, 0.7%, 1.1%, 1.3% and 1.9%, respectively.

Separately, the US Bureau of Labor Statistics reported Consumer Price Index for all Urban Consumers (CPI-U) improved 0.3% in June following a gain of 0.4% in May. The rise in consumer price June was in-line with the consensus estimate. The rise in consumer prices was driven primarily by an increase in cost of gasoline. The gasoline index rose 3.3% in June, accounting for two-third of the rise in overall June prices.

The day's better-than-expected earnings results also had a positive impact on the benchmarks. Shares of Chipotle Mexican Grill, Inc. ( CMG ) surged 11.8%, making it the S&P 500's biggest percentage gainer, a day after the company reported better-than-expected earnings results. After the closing bell on Monday, Chipotle Mexican Grill posted second quarter 2014 earnings per share of $3.50, well above the Zacks Consensus Estimate of $3.05. Earnings also increased 24.1% year over year.

Comcast Corporation's ( CMCSA ) second-quarter adjusted earnings per share of 75 cents beat the Zacks Consensus Estimate of 72 cents. The company's net earnings outpaced the Zacks Consensus Estimate on the back of a 4.5% year-over-year rise in average revenue per user (ARPU) per month to $137.24. Verizon Communications Inc. ( VZ ) reported second-quarter 2014 adjusted earnings of 91 cents per share, beating the Zacks Consensus Estimate by a penny. Shares of Comcast and Verizon Communications gained 1.5% and 0.6%, respectively.

Netflix, Inc. ( NFLX ) reported second-quarter 2014 earnings of $1.15 per share, beating the Zacks Consensus Estimate by a penny. However, shares of Netflix dropped 4.6%.

On the other hand, quarterly results from McDonald's Corp. ( MCD ) and The Coca-Cola Company ( KO ) were discouraging. McDonald's reported adjusted earnings of $1.40 per share in the second quarter of 2014, which missed the Zacks Consensus Estimate of $1.43. Coca-Cola posted second quarter revenues that declined 1% year over year to $12.57 billion and missed the Zacks Consensus Estimate of $12.85 billion. Shares of McDonald's and Coca-Cola declined 1.3% and 2.9%, respectively.

According to FactSet Research Systems Inc. ( FDS ), 116 companies have reported earnings till the close of Tuesday's trading session, out of which 93 have beaten expectations.

Separately, shares of Herbalife Ltd. ( HLF ) jumped 25.5%; its biggest one-day percentage gain after Bill Ackman's accusation against the company fell flat. On Monday, Bill Ackman told CNBC that he will provide evidence on Tuesday that Herbalife is an "incredible fraud".

Meanwhile, investors kept an eye on the latest developments related to Malaysian Airline MH17 that was shot down near the Ukraine-Russian border last Thursday. Pro-Russian separatists agreed to hand over the black boxes from the Malaysian jet. Meanwhile, Israel continued its ground offensive along the Gaza strip and said they would not announce a cease-fire despite repeated appeals from international communities. On Monday, President Obama had sent U.S. Secretary of State John Kerry to Cairo to call for a truce between Israel and Hamas militants.

Coming back to domestic events, 8 out of 10 sectors of the S&P 500 ended in the green. The Health Care Select Sector SPDR (XLV) advanced 0.9%, the second-highest among the S&P 500 sectors. Key stocks from the sector such as Johnson & Johnson ( JNJ ), Pfizer Inc. ( PFE ), Merck & Co. Inc. ( MRK ), Gilead Sciences Inc. ( GILD ) and AbbVie Inc. ( ABBV ) gained 1.2%, 0.5%, 0.7%, 0.5% and 0.1%, respectively.


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D R HORTON INC (DHI): Free Stock Analysis Report

TOLL BROTHERS (TOL): Free Stock Analysis Report

PULTE GROUP ONC (PHM): Free Stock Analysis Report

LENNAR CORP -A (LEN): Free Stock Analysis Report

KB HOME (KBH): Free Stock Analysis Report

CHIPOTLE MEXICN (CMG): Free Stock Analysis Report

COMCAST CORP A (CMCSA): Free Stock Analysis Report

VERIZON COMM (VZ): Free Stock Analysis Report

NETFLIX INC (NFLX): Free Stock Analysis Report

MCDONALDS CORP (MCD): Free Stock Analysis Report

COCA COLA CO (KO): Free Stock Analysis Report

FACTSET RESH (FDS): Free Stock Analysis Report

HERBALIFE LTD (HLF): Free Stock Analysis Report

JOHNSON & JOHNS (JNJ): Free Stock Analysis Report

PFIZER INC (PFE): Free Stock Analysis Report

MERCK & CO INC (MRK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , US Markets

Referenced Stocks: XHB , XLV , DHI , TOL , PHM

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