Benchmarks closed flat on Thursday as investors received mixed
corporate results and economic data. However, S&P 500 managed
to finish at another record high. Facebook and Ford reported upbeat
quarterly results. However, Caterpillar, General Motors and D.R.
Horton posted dismal corporate results. Economic data on initial
claims was positive, but new home sales numbers were discouraging.
For a look at the issues currently facing the markets, make sure to
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) dropped a meager 0.02% to
close at 17,083.80. The Standard & Poor 500 (S&P 500)
advanced just 0.05% to close at 1,987.98. The tech-laden Nasdaq
Composite Index closed at 4,472.11; declining 0.04%. The fear-gauge
CBOE Volatility Index (VIX) went up 2.8% to settle at 11.84. Total
volume for the day was roughly 5.58 billion shares, somewhat higher
than this month's average of 5.54 billion. Decliners outpaced
advancing stocks on the NYSE. For 51% stocks that declined, 45%
The S&P 500 closed at a record level for the 27th time this
year. The S&P 500 also touched an intraday record high of
Corporate results came in mixed on Thursday. Shares of Facebook,
) surged 5.2% a day after the company reported impressive
second-quarter 2014 results. Earnings of 30 cents per share were
better than the Zacks Consensus Estimate of 26 cents. Revenues of
$2.9 billion in the quarter were also better than the Zacks
Consensus Estimate of $2.85 billion. The social networking company
had reported its results after the markets closed on Wednesday.
Shares of Under Armour, Inc. (
) surged 14.7% after the company reported a 34% year on year jump
in its net revenue to $610 million. Shares of the sports apparel
manufacturer and retailer hit an all-time intraday high of $70.25.
The company also turned out to be S&P 500's biggest percentage
Ford Motor Co. (
) posted earnings per share of 40 cents in the second quarter of
2014, beating the Zacks Consensus Estimate of 37 cents. Shares of
the auto maker went up 0.3%.
However, shares of General Motors Company (
) dropped 4.5% after the company reported second quarter 2014
adjusted earnings of 58 cents per share, missing the Zacks
Consensus Estimate of 78 cents per share. The auto manufacturer
reported disappointing second-quarter results largely due to recall
costs that chopped $1.5 billion from the company's bottom line.
Further, the company had to bear pre-tax charges of $400 million in
order to compensate victims of ignition-switch related crashes.
Caterpillar Inc. (
) reported second quarter revenues of $14.1 billion, short of the
Zacks Consensus Estimate of $14.4 billion. Revenues also declined
3% year over year. Caterpillar's shares dropped 3.1%.
3M Company (
) reported second-quarter 2014 earnings per share of $1.91.
Earnings per share were in line with the Zacks Consensus Estimate.
Shares of 3M went up 0.3%.
S&P 500's biggest decliner was DR Horton Inc. (
). Shares of the homebuilder tumbled 11.5% after the company
reported a decline in its net income for the third quarter ending
June 30. Earnings were 32 cents a share, less than the Zacks
Consensus Estimate of 49 cents a share. Earnings per share were
also less than year-ago earnings of 42 cents.
Separately, a report released by the U.S. Census Bureau and the
Department of Housing and Urban Development revealed sales of new
single-family houses decreased 8.1% from May's revised rate of
442,000 to seasonally adjusted annual rate of 406,000 in June. New
home sales registered its biggest drop in almost a year. The drop
in new home sales was in contrast to the consensus estimate of a
rise to 479,000.
Housing data and DR Horton's dismal results had a negative impact
on homebuilder stocks. The SPDR S&P Homebuilders (XHB) declined
almost 1.7%, the biggest decliner among the S&P 500 sectors.
Key housing stocks from the sector such as Toll Brothers Inc. (
), PulteGroup, Inc. (
), Lennar Corp. (
) and KB Home (
) decreased 4.1%, 3.0%, 3.1% and 3.3%, respectively. Overall, 5 out
of 10 sectors of the S&P 500 ended in the red.
However, initial claims data was encouraging. The Labor Department
said initial claims declined 19,000 to 284,000 in the week ending
Jul 19. This claim for unemployment benefits was at the lowest
level since Feb 18, 2006. The 4-week moving average decreased to
302,000 from the previous week's revised average of 309,250. This
is the lowest level for this metric since May 19, 2007.
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FACEBOOK INC-A (FB): Free Stock Analysis Report
UNDER ARMOUR-A (UA): Free Stock Analysis Report
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
CATERPILLAR INC (CAT): Free Stock Analysis
3M CO (MMM): Free Stock Analysis Report
D R HORTON INC (DHI): Free Stock Analysis
TOLL BROTHERS (TOL): Free Stock Analysis Report
PULTE GROUP ONC (PHM): Free Stock Analysis
LENNAR CORP -A (LEN): Free Stock Analysis
KB HOME (KBH): Free Stock Analysis Report
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