Dow 30 Stock Roundup: Wal-Mart Beats, Cisco Reports In Line

The Dow posted a four-day winning streak before declining on fresh concerns emanating from the White House. During the early part of the week, the index rode on gains from individual components to cross the psychological 22,000 milestone for the fourth time this year. Broader markets were also lifted by signs that tensions between the U.S. and North Korea were cooling down. Fresh concerns emanating from the White House and the terrorist attack in Barcelona ultimately ended the index's gains on Thursday.

Last Week's Performance

The index advanced 0.1% last Friday, buoyed by an increase in the shares of Apple Inc. AAPL . The Dow as well as the broader markets were also boosted by diminishing rate hike prospects, following concerns over sluggish inflation levels. However, gains were curbed by escalating geopolitical tensions between Pyongyang and Washington. US consumer prices increased 0.1% last month against expectations of a 0.2% increase.

The index declined 1.1% last week, marking the biggest one-week drop since November. The blue-chip index started off the week on a high, but tumbled following President Trump's warning to North Korea. Subsequently, the Dow also incurred losses, after shares of The Walt Disney Company DIS declined following its decision to end the distribution deal with Netflix, Inc. NFLX .

The DowThisWeek

The index gained 0.6% on Monday buoyed by a 1.8% rise in the shares of Visa Inc. V which gained from broadly encouraging economic conditions. Also, contributing to the gains were increases in shares of The Goldman Sachs Group, Inc. GS , The Boeing Co. BA and Apple. Broader markets were lifted by signs that tensions between the U.S. and North Korea were cooling down.

The index inched up less than 0.1% upward on Tuesday. The biggest drag on the Dow was the decline in shares of The Home Depot Inc. HD . The home-improvement company shaved off around 30 points from the Dow. Such a turn of events makes it amply clear that the company is not immune to "Amazonification" despite its status as a leading specialty retailer.

The Dow crossed the psychological 22,000 milestone for the fourth time this year on Wednesday, rebounding from the lows it hit the last week due to rhetoric between Pyongyang and Washington. The index added 0.1% following broad based gains which were incurred after the release of the minutes of the Fed's July policy meeting. The minutes clearly indicated that Fed officials remain divided in their opinions to increase the interest rates.

The index declined 1.2% on Thursday with all its 30 components ending the day with losses. Broader markets were weighed down by fresh concerns emanating from the White House as well as the terrorist attack in Barcelona. Shares of Cisco Systems Inc. CSCO and Wal-Mart Stores Inc. WMT closed the day and lower, respectively after their earnings results disappointed investors. Thursday's losses ended the index's four-day winning streak during which the Dow gained 180 points.

ComponentsMovingthe Index

Cisco reported fourth-quarter fiscal 2017 non-GAAP earnings (including stock-based compensation) of 55 cents per share, in line with the Zacks Consensus Estimate. Excluding stock-based compensation, non-GAAP earnings decreased 3.2% on a year-over-year basis to 61 cents per share, within the management's guided range of 60-62 cents. In fiscal 2017, Zacks Rank #3 (Hold) rated Cisco reported earnings of $2.39 per share on revenues of $48 billion.

Revenues declined 4% year over year to $12.13 billion, slightly better than the Zacks Consensus Estimate. Management had anticipated revenues to decline in the range of 6-4% on a year-over-year basis.

For first-quarter fiscal 2018, revenues are expected to decline in the range of 3-1% on a year-over-year basis. Non-GAAP earnings are anticipated to be in the range 59-61 cents per share. The Zacks Consensus Estimate was pegged at 55 cents on revenue estimates of $12.09 billion. (Read: Cisco Meets Q4 Earnings Estimates, Revenues Beat )

Wal-Mart 's second-quarter fiscal 2018 adjusted earnings of $1.08 per share beat both the Zacks Consensus Estimate and prior-year quarter's adjusted earnings of $1.07 by 0.9%. Earnings reached the top end of the guided range of $1.00-$1.08 per share.

Total revenues came in at $123.4 billion (including membership and other income). The figure came ahead of the Zacks Consensus Estimate of $122.7 billion by 0.5% and increased 2.1% year over year. Currency impacted sales by approximately $1.04 billion. The decline in the International business was more than offset by growth in sales at Wal-Mart U.S and Sam's Club divisions. On a constant currency basis, revenues improved 2.9% to $124.4 billion.

Zacks Rank #2 (Buy) rated Wal-Mart expects U.S. comp sales growth in the range of 1.5-2.0% for the 13-week period ending Oct 27. Sam's Club comp sales, without the impact of fuel sales, are expected to increase 1-1.5%. The company expects adjusted earnings in the range of 90 cents to 98 cents per share.

The company now expects fiscal 2018 earnings in the range of $4.30-$4.40 per share, as compared with the prior expectation of $4.20-$4.40 per share, announced during fourth-quarter fiscal 2017. (Read: Wal-Mart Tops Q2 Earnings on Higher Comps & Traffic )

Home Depot posted fiscal second-quarter earnings of $2.25 per share, which escalated 14.2% from $1.97 in the year-ago quarter and beat the Zacks Consensus Estimate of $2.21.

Net sales grew 6.2% to $28,108 million from $26,472 million in the year-ago quarter. Moreover, the top line surpassed the Zacks Consensus Estimate of $$27,840.5 million. The company's overall comparable-store sales (comps) increased 6.3%, while comps in the U.S. grew 6.6%.

Following the robust fiscal first half performance, Home Depot raised earnings and sales guidance for fiscal 2017. The company now expects sales growth of nearly 5.3%, alongside a 5.5% increase in comps. Earlier, the company expected both net sales and comps for fiscal 2017 to increase 4.6%.

Moreover, management now anticipates earnings per share to increase about 13% to $7.29 in fiscal 2017, compared with the previous guidance of 11% growth to $7.15. The guidance includes $7 billion impact from share repurchases. The stock has a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Boeing has clinched a modification contract to support sustainment of C-17 aircraft due to increase in fleet and number operating bases. Valued at $7.1 billion, the contract has been awarded by the Air Force Life Cycle Management Center, C-17 Contracting Branch, Robins Air Force Base, GA.

Work related to this deal is scheduled to be over by Sep 30, 2021 and will be carried out across the globe. Zacks Rank #3 rated Boeing's C-17 Globemaster III is a large military transport aircraft. The multi-service C-17 can carry large equipment, supplies troops directly to small airfields in harsh terrain anywhere in the world. (Read: Boeing Secures $7.1B Air Force Deal for C-17 Support )

Apple has told content producers that it plans to spend $1 billion on original programming over the next year to possibly kick-start its own video streaming service.

According to The Wall Street Journal , Zacks Rank #3 rated Apple plans to acquire and produce 10 new shows. At the moment, Apple produces two shows, Carpool Karaoke and Planet of the Apps, which are available on the company's music streaming service. The new shows produced by Apple would also appear on Apple Music, or could be a part of a new, video-only service.

The $1 billion budget will be in the hands of Jamie Erlicht and Zack Van Amburg. The previous co-presidents of Sony Pictures Television were hired this past June to take over all TV programming for Apple.

Erlicht and Van Amburg have begun meeting with Hollywood agents to find shows the company could acquire. They have also hired former WGN America (TRCO) President Matt Cherniss to oversee programming development. (Read: Apple Plans to Spend $1 Billion on Original TV Programming )

Performance of the Top 10 Dow Companies

The table given below shows the price movements of the 10 largest components of the Dow, which is a price weighted index, over the last five days and during the last six months. Over the last five trading days, the Dow has declined by 0.7%.

Ticker Last 5 Day's Performance 6-Month Performance
MMM -0.7% +4.9%
GS -1.9% -12.1%
IBM -1.0% -22.0%
HD -2.2% +3.2%
BA +1.3% +34.2%
UNH +0.7% +20.0%
MCD -0.3% +23.3%
TRV -1.3% +5.5%
JNJ +0.6% +11.2%
AAPL -0.4% +15.5%

Next Week's Outlook

Given that the earnings season is all but over, focus is likely to shift to political events at home. President Trump looks set to influence the markets, mostly in a negative manner, in the days ahead. Given this backdrop, investors are likely to switch their attention to economic data, such as durable orders, slated for release next week. Positive economic fundamentals and earnings strength will likely be the factors powering gains for markets in the days ahead.

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Cisco Systems, Inc. (CSCO): Free Stock Analysis Report

Walt Disney Company (The) (DIS): Free Stock Analysis Report

Netflix, Inc. (NFLX): Free Stock Analysis Report

Boeing Company (The) (BA): Free Stock Analysis Report

Home Depot, Inc. (The) (HD): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

Goldman Sachs Group, Inc. (The) (GS): Free Stock Analysis Report

Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report

Visa Inc. (V): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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