Mixed results from major companies pushed the Dow Jones
marginally into the red. Investors also took a cautious stance
ahead of the two-day FOMC meeting. The S&P 500 and the Nasdaq
finished in the green, but only just. This was due to positive
investor sentiment towards the technology sector. On the domestic
front, Conference Board Consumer Confidence Index and
S&P/Case-Schiller home prices were released. On the
international front, economic sentiment index for July of the
Euro Zone region reached its highest level in 15 months. Of the
top ten S&P 500 industry groups, technology stocks gained the
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) lost 0.01% to close the
day at 15,520.59. The S&P 500 increased 0.04% to finish
yesterday's trading session at 1,685.96. The tech-laden Nasdaq
Composite Index rose 0.5% to end at 3,616.47. The fear-gauge CBOE
Volatility Index (VIX) remained unchanged at 13.39. 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. Declining stocks outnumbered the
advancers. For the 49% that declined, only 47% advanced.
About 60% of the S&P 500 companies have declared their
results, out of which earnings of nearly 67.4% have beaten the
Streets estimates. Benchmarks oscillated between small gains and
losses during Tuesday's trading session. Pfizer disclosed results
which marginally beat the Street's estimates, while Merck missed
expectations. Results from Coach Inc also dampened investor
sentiment. Investors were also cautious regarding the outcome of
the two-day FOMC meeting. The focus is now on the fate of the
bond purchase program which helped benchmarks reach their highest
level several times in the first quarter.
Pfizer Inc. (NYSE:
) disclosed its second quarter results which marginally beat
estimates. Adjusted income of the company declined 10% to $4
billion or 56 cents a share. Sales of the company came in at
$12.97 billion, down 7%. Low sales are attributable to declining
sale of its off-patent cholesterol fighter product named Lipitor.
Another drug company, Merck & Co., Inc. (NYSE:
) reported profits of $906 million or 30 cents per share, 50%
down year over year. Revenues of the company declined 11% to
$11.01 billion. Revenues of the company were negatively affected
by the foreign currency headwinds to the extent of 3%. Low
revenues of the company are attributable to declining sales of
allergy and asthma drug Singulair.
Shares of Sprint Nextel Corporation (NYSE:
) surged nearly 7.3% despite posting operating loss of $874
million. However, revenues of the company came in at $7.2
billion, an increase of 8% year over year. The company was also
successful in gaining back the 4 million subscribers it lost when
the connection was discontinued.
Shares of Coach, Inc. (NYSE:
) dropped 7.9% after it reported disappointing results. Net
income of the company declined to $221.3 million or 78 cents a
share, compared to year-ago figures of $251.4 million or 86 cents
per share. Excluding one-time items, Coach garnered profits of 89
cents a share, in line with the Street's estimates.
On the domestic front, the Consumer Board Confidence Index for
July dropped marginally to 80.3 compared to 82.1 in June. The
index was also below the consensus estimate of 80.9.
Additionally, the Expectations Index dropped to 84.7 from 91.1
recorded in the previous month. However, the Present Situation
Index improved to 73.6 from 68.7 recorded during last
The S&P/Case-Schiller Home Prices Indices for 10- and 20-
City composites for May increased month over month to 2.5% and
2.4%, respectively. Annually, the 10- and 20- City Composites
increased 11.8% and 12.2%, respectively. These were the highest
year over year gains posted since March 2006. Among all the
cities, home prices at Dallas and Denver broke the record levels
which were set during the housing bubble.
On the international front, the economic sentiment index of
the Euro Zone region in July touched a 15- month high. Economic
sentiment came in at 92.5 in July ahead of June 2013's figure of
91.3. However, it fell marginally short of estimates of 92.6. The
barometer measuring Euro Zone's business climate index increased
significantly to -0.53 from previous month's figure of -0.67. Of
the five largest economies in Euro Zone region, confidence in
Netherlands dropped. Confidence in Germany, France and Spain grew
0.7, 1.2 and 1.2 points, respectively.
The technology sector was the biggest gainer among the S&P
500 industry groups. The Technology SPDR (XLK) gained 0.5%.
Shares of Apple Inc. (NASDAQ:
), Microsoft Corporation (NASDAQ:
), Intel Corporation (NASDAQ:
), Google Inc. (NASDAQ:
) and Yahoo! Inc. (NASDAQ:
) gained 1.2%, 1.0%, 0.6%, 1.0% and 0.4%, respectively.
APPLE INC (AAPL): Free Stock Analysis Report
COACH INC (COH): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis
INTEL CORP (INTC): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis
PFIZER INC (PFE): Free Stock Analysis Report
SPRINT CORP (S): Free Stock Analysis Report
YAHOO! INC (YHOO): Free Stock Analysis Report
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