Dow: 12,676 (+0.47%) S&P 500: 1,338 (-0.03%)
The way the MarketSnacks team thinks, if someone handed us a free hamburger without any ketchup, we would definitely feel like we were missing something, but we’re not going to ignore free meat. We’d apply the same thought process to stocks today – not all stocks were up and the S&P 500 stock index even ticked down, but we’re satisfied that the blue chip heavy Dow Jones Industrial Average turned positive for the first time in 4 trading sessions. Apple’s earnings yesterday afternoon after the market closed missed expectations for only the 2nd time in 39 quarters and unimpressive government housing data set a negative tone, holding back stock gains. But key earnings from Boeing and Caterpillar powered the Dow up 59 points after 3-straight triple digit losses.
“New Home Sales” drop to lowest level in 5 months
Sales of newly built homes in the US fell more than expected in June to reach their lowest level in 5 months. The Commerce Department’s official report put a damper on the market’s positive day, even though the government also reported upward revisions to the previous 2 month’s numbers. May and April were therefore huge for new home sales (in fact the 382,000 new homes sold in May was the highest rate in 2 years), but investors instead focused on the 350,000 sold in June, 20,000 below economists’ consensus. While there were clearly positive and negative elements to the government’s new home sales report, analysts are now looking forward to July’s numbers since the current rate of homes sold is still slightly down from the same period last year.
Positive earnings from leading blue chip manufacturers Boeing and Caterpillar lift stocks
Airplane manufacturer Boeing (BA) beat earnings estimates today and raised its expected new jet delivery number to 600 for this year. If met, that would make Boeing the top airplane manufacturer once again, a title it lost to European Airbus back in 2003. Another American manufacturer of big-boy toys was Caterpillar (CAT). The worldwide leader in construction equipment jumped 1.44% today after a strong earnings report on the back of increased North American sales despite the economic slowdown. For every five stocks that rose today, four fell. Although 71% of companies are still beating analyst earnings forecasts this quarter, others are creating a fuss including Apple (AAPL), which dropped 4% today, and Netflix (NFLX), which lost 25% of its stock price today after announcing poor earnings and forecasting slower growth in subscribers.
- The big earnings announcement of the day is Facebook (FB)…Zuckerberg’s first report since he dropped out of college
- Some notable econ new: Weekly Jobless Claims, June Durable Goods Orders, June Pending Home Sales…
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