Weak Blue-Chip Earnings Push Dow Into the Red

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"In one of the busiest days this earnings season, investors were greeted with a slew of big-name company reports, and results were mixed," said Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Overall, the broad markets took a break from the positive momentum, and most major sectors finished in the red." A pair of downbeat reports from Caterpillar ( CAT ) and AT&T ( T ) certainly didn't do the Dow Jones Industrial Average (DJI) any favors, as their weaker-than-expected results dragged the blue-chip bellwether into the red through the close.

Continue reading for more on today's market, including :

plus...
    New home sales hit a multi-year high, Ford (F) basked in post-earnings glory, and Netflix (NFLX) gained popularity with the bears.

The Dow Jones Industrial Average (DJI - 15,542.24) spent less than 30 minutes in the black this morning before venturing into negative territory for the rest of the session. By the close, the blue-chip barometer shed 25.5 points, or 0.2%. Only 10 Dow components finished higher, with Hewlett-Packard's (HPQ) gain of 1.5% leading the way. Meanwhile, Caterpillar ( CAT ) paced the 20 decliners with an earnings-triggered drop of 2.4%.

The S&P 500 Index (SPX - 1,685.94) came within a hair's breadth of yesterday's record intraday high right out of the gate this morning before quickly retreating, and ended up finishing 6.5 points, or 0.4%, lower. Meanwhile, the Nasdaq Composite (COMP - 3,579.60) "bucked" the broader trend south to close a modest 0.3 point, or 0.01%, higher.

The CBOE Market Volatility Index (VIX - 13.18) remained north of breakeven for the entire session, adding 0.5 point, or 4.1%, by the closing bell.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The technology sector was the real star of the day, as it was bolstered by the much better-than-expected earnings report from Apple (AAPL)," continued Bell. "While many market participants were in profit-taking mode, quite a bit of money flowed into the tech sector and AAPL today."

3 Things to Know About Today's Market :

  • The Commerce Department said new home sales rose by 8.3% in June to an annual rate of 497,000, marking a five-year high. On a year-over-year basis, new home sales surged by 38.1%, the biggest increase since January 1992. (Bloomberg)
  • Ford (F) reported an adjusted second-quarter profit of 45 cents per share this morning, topping analysts' expectations of 37 cents per share. Meanwhile, revenue surged to $38.1 billion, exceeding the consensus view. (CNBC)
  • During a webcast presentation in San Francisco, Google (GOOG) revealed the latest version of its Nexus 7 tablet , which offers more memory and higher resolution. The cost for the 16-gigabyte version is $229, while the 32-GB version will go for $269. Both will be available at stores such as Best Buy (BBY) and GameStop (GME) next week. (MarketWatch)

5 Stocks We Were Watching Today :

  1. Apple (AAPL) scored some bullish brokerage attention after reporting stronger-than-expected quarterly earnings post-close yesterday.
  2. Put players wagered on further downside for Netflix (NFLX) by week's end.
  3. Uptrending Micron Technology (MU) continued to feel the love from bullish bettors.
  4. Near-term call buyers are wagering on a post-earnings pop for Sirius XM Radio (SIRI) .
  5. The latest installment of Weekly Contrarian explores whether Sears (SHLD) deserves more attention from Wall Street.

EARNINGS

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Crude oil futures felt the weight of some downbeat manufacturing data out of China today, and responded by finishing at their lowest level in nearly two weeks. By the close, September-dated oil shed $1.84, or 1.7%, to end at $105.39 per barrel.

Meanwhile, gold futures endured their largest daily drop since July 5, which was attributed to a strong greenback and a spike in new home sales. By the time the dust settled, the August contract was off $15, or 1.1%, to finish at $1,319.70 an ounce.

SCHAEFFER'S MARKET POSTURE



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.

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This article appears in: Investing , Options

Referenced Stocks: BMY , CAT , GM , T , YHOO

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