Benchmarks ended in the red on Wednesday after dismal earnings
from heavy equipment maker Caterpillar and a decline in oil
prices dampened investor sentiments. This marked the end of the
four consecutive record closes for the S&P 500. Yesterday's
losses came a day after stocks finished higher buoyed by a tepid
jobs report which reassured investors that the Fed will keep
pumping money into the economy at the same pace. Declining oil
prices meant that the energy sector was the biggest loser among
the S&P 500 industry groups. Consumer staples stocks gained
BOEING CO (BA): Free Stock Analysis Report
CATERPILLAR INC (CAT): Free Stock Analysis
CONOCOPHILLIPS (COP): Free Stock Analysis
CVS CAREMARK CP (CVS): Free Stock Analysis
CHEVRON CORP (CVX): Free Stock Analysis
HESS CORP (HES): Free Stock Analysis Report
LORILLARD CO (LO): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis
PHILIP MORRIS (PM): Free Stock Analysis
SCHLUMBERGER LT (SLB): Free Stock Analysis
WALGREEN CO (WAG): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) lost 0.4% to close the day
at 15,413.26. The S&P 500 slipped 0.5% to finish yesterday's
trading session at 1,746.36. The tech-laden Nasdaq Composite
Index decreased 0.6% to end at 3,907.07. The fear-gauge CBOE
Volatility Index (VIX) edged up 0.7% to settle at 13.42.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5.7 billion shares, lower
than 2013's average of 6.0 billion shares. Declining stocks
outnumbered the advancers. For 53% shares that declined, 44%
Stocks have had a decent rally over the last two weeks. Gains in
the markets have been driven by an end to the sixteen-day long
partial government shutdown and a successful debt ceiling deal.
Tuesday's weaker-than-expected government jobs report eased
investor concerns about the prospects of the Fed reducing bond
buying in its next meeting. The S&P 500 has gained nearly 6%
over the prior two weeks.
Dismal quarterly results from heavy equipment maker Caterpillar
) was largely responsible for dragging the markets lower.
Caterpillar not only posted weaker-than-expected third quarter
profits but also reduced its full-year forecast once again due to
a decline in the demand for mining equipment. The company
reported quarterly profits of $946 million, sharply below the
year ago figure of $1.7 billion. Total sales and revenue
declined 18% to $13.4 billion. The company said next year sales
will remain flat or may increase or decrease by 5% in comparison
with 2013. Following these results, shares plunged more than 6%
On the other hand, The Boeing Company (NYSE:
) posted robust third quarter earnings. Both earnings and revenue
comfortably surpassed the Street's estimates. The company's
quarterly profits surged 12% as lower profits from its defense
business were overshadowed by higher margins and an increase in
production of commercial aircraft. The company also raised its
earnings per share estimate for the current year. Boeing is now
expecting earnings per share in the range of $6.50 to $6.65, up
from the previous estimate of $6.20 to $6.40. Shares jumped more
than 5% after the announcement of results.
As of now, 160 companies have reported their quarterly numbers.
About 66% of the companies have beaten the Street's estimates, a
figure which is marginally above the historical average. Nearly
54% have surpassed revenue estimates.
Oil prices declined to their lowest level in nearly four months,
dragging energy stocks lower. The Energy Select Sector SPDR (XLE)
lost 1.5% yesterday. Stocks such as Chevron Corporation (NYSE:
), Exxon Mobil Corporation (NYSE:
), Hess Corp. (NYSE:
), Schlumberger Limited. (NYSE:
) and ConocoPhillips (NYSE:
) slipped 0.4%, 0.4%, 2.0%, 1.7% and 1.2%, respectively.
Consumer staples stocks gained the most among the top ten S&P
500 industry groups. Consumer Staples Select Sect. SPDR (XLP)
gained 0.3%. Stocks such as the Procter & Gamble Company
), Philip Morris International Inc. (NYSE:
), CVS Caremark Corporation (NYSE:
), Walgreen Company (NYSE:
) and Lorillard Inc. (NYSE:
) gained 0.7%, 0.4%, 0.1%, 0.2% and 1.0%, respectively.