Mixed earnings reports from major companies limited the Dow
Jones and the S&P 500 from extending gains on Thursday.
However, better-than-expected earnings from social media giant
Facebook lifted the Nasdaq higher. A few economic reports were
released on the home front. The number of Americans filing for
unemployment benefits increased modestly in the previous week.
Meanwhile, durable goods orders jumped in the month of June. On
the international front, Spain's unemployment rate declined
surprisingly for the first time in two years. Housing stocks were
the worst performers, following disappointing earnings reports
from two major companies PulteGroup and D.R. Horton. The
materials sector was the biggest gainer among the S&P 500
For a look at the issues currently facing the markets, make
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.1% to close
the day at 15,555.61. The S&P 500 added 0.3% to finish
yesterday's trading session at 1,690.25. The tech-laden Nasdaq
Composite Index increased 0.7% to end at 3,605.19. The fear-gauge
CBOE Volatility Index (VIX) declined 1.6% to settle at 12.97.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5.9 billion shares, below
2013's average of 6.4 billion shares. Advancing stocks
outnumbered the decliners. For the 56% that advanced, 41%
Shares of Facebook Inc (NASDAQ:
) soared 30% yesterday after the company reported second quarter
results. The company's results comfortably surpassed the Street's
estimates. Facebook earnings and revenues were boosted by the
growth of its mobile advertising business. Revenue increased 53%
from the year ago period to $1.81 billion. Speaking to CNBC,
Facebook CFO David Ebersman said: "The investments we have made
over the past year are really paying off to position the company
to thrive in a mobile world."
General Motors Company (NYSE:
) reported quarterly results yesterday. The company's earnings
came in above analysts' expectations. Excluding one-time items,
the company earned 84 cents per share. Revenue increased nearly
4% to $39.1 billion. The company reported stronger-than-expected
earnings due to robust demand in North America and aggressive
cost cutting in European business. 3M Co (NYSE:
) reported second quarter earnings, which came in marginally
above the Street's estimates. The company's revenue
increased nearly 3%. Shares increased 0.2% after the announcement
Two major companies from the housing sector reported earnings.
D.R. Horton, Inc. (NYSE:
) earnings surpassed the Street's estimates. The company's
earnings in the third quarter increased as it sold more homes at
higher prices. Revenue increased 47% to $1.64 billion.
Despite robust earnings, the company's shares dropped 8.6%.
On the other hand, PulteGroup, Inc. (NYSE:
) second quarter earnings came in below the Street's
expectations. The company said the number of homes booked
declined 12%. Net income decreased to $36.4 million from
$42.4 million a year ago period. Shares declined more than
Meanwhile, the U.S. Department of Labor reported initial
claims numbers. Initial claims increased 7,000 to 343,000 from
the prior week's revised figure of 336,000. This was marginally
above the consensus estimate of 342,000. The 4-week moving
average jumped 1,250 to 345,250 from the earlier week's revised
figure of 346,500.
According to the U.S. Department of Commerce, new orders for
durable goods increased 4.2% to $244.5 billion. This was
considerably above the consensus estimate of an increase of 1.3%.
Excluding defense, new orders gained 3.0%. Nondefense new orders
for capital goods increased 6.3% to $91.6 billion.
On the international front, the unemployment rate in Spain
declined for the first time in two years in the second quarter.
According to the country's National Statistics Institute, the
unemployment rate declined to 26.3% from 27.2%. Most of the jobs
increased in the Balearic Islands and Andalusia. But jobs in
manufacturing and construction continued to decline.
Housing stocks were the worst performers yesterday and the
SPDR S&P Homebuilders (XHB) declined 1.4%. Stocks such as The
Ryland Group, Inc. (NYSE:
), M.D.C. Holdings, Inc. (NYSE:
), KB Home (NYSE:
) and Lennar Corporation (NYSE:
) lost 5.1%, 1.5%, 6.7% and 1.6%, respectively.
The materials sector was the biggest gainer among the S&P
500 industry groups and the Materials Select Sector SPDR (XLB)
gained 1.0%. Stocks such as Air Products & Chemicals,
), Airgas, Inc. (NYSE:
), The Dow Chemical Company (NYSE:
) and Eastman Chemical Company (NYSE:
) gained 6.5%, 1.0%, 1.8% and 0.6%, respectively.
AIR PRODS & CHE (APD): Free Stock Analysis
AIRGAS INC (ARG): Free Stock Analysis Report
D R HORTON INC (DHI): Free Stock Analysis
DOW CHEMICAL (DOW): Free Stock Analysis
EASTMAN CHEM CO (EMN): Free Stock Analysis
FACEBOOK INC-A (FB): Free Stock Analysis
GENERAL MOTORS (GM): Free Stock Analysis
KB HOME (KBH): Free Stock Analysis Report
LENNAR CORP -A (LEN): Free Stock Analysis
MDC HLDGS (MDC): Free Stock Analysis Report
PULTE GROUP ONC (PHM): Free Stock Analysis
RYLAND GRP INC (RYL): Free Stock Analysis
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