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S&P 500 Sets New High Despite Disappointing Earnings

Disappointing earnings and weaker-than-expected housing data didn't stop the S&P 500 from setting a third closing high today. Meanwhile, the National Association of Realtors reported that existing home sales slipped 1.2% in June to an annual rate of 5.08 million. Expectations had been for a rate of 5.25 million units. Nevertheless, the report was the second best since November 2009.

The start of the week was not an auspicious one from an earnings standpoint with some troubling misses on estimates. Most notable was McDonald's (MCD) which fell over 2.5% after reporting earnings of $1.38 a share when expectations were for $1.40. Revenue also missed at $7.08 billion when consensus was for $7.094 billion. The company is citing economic uncertainly around the world for a decrease in opportunities. The chain is trying to counteract the trend by focusing on its Dollar Menu. For the quarter just ending, same-store sales ticked higher, but margins shrank.

Hasbro (HAS) also missed estimates on both the top and bottom lines. The toy maker posted profits of 29-cents a share, when expectations were for 34-cents. Revenue was almost 5% lower than predictions at $766.3 million. Hasbro says revenue for boys' toys has plummeted 35% and is dragging down growth in other units. Hasbro's boy segment has posted sales declines in five consecutive quarters as action figures get supplanted by mobile games. Despite the bad news, the stock climbed over 3% because the company announced an expanded merchandising relationship with Disney for its Marvel and Star Wars brands.

Kimberly-Clark (KMB) fell nearly 2% on mixed results for the quarter. The maker of Kleenex and Huggies reported earnings of $1.41 a share excluding items when expectations were for $1.39. Revenue, however, fell short of consensus at $5.3 billion. Estimates were for $5.34 billion. The company says it is being hurt by a stronger U.S. dollar. It now expects currency to dampen revenue by as much as 2% which would be higher than earlier estimates. On the bright side, the company says it will be able to cut costs more than previously expected in the coming quarters.

Six Flags (SIX) fell over 1.5% after missing estimates on both earnings and revenue. The company reported net income of 47-cents a share, a nickel below the consensus. Revenue was $363.7 million versus estimates of $370 million and 3% lower than last year. The company says it has been successful up-selling guests to season passes and membership plans. Results for the quarter were tallied before Friday when a woman fell from a 14 story roller coaster called the "Texas Giant" at Six Flags Over Texas.

Apple (AAPL) shares rose 0.3%. The company reports earnings tomorrow after the market close, but dominated headlines today with a wide array of reports. The Wall Street Journal says Apple is now testing larger screens for its iPhones and iPads. Separately, the company has taken down its site for developers saying it was hacked. Over the weekend, there were also reports that Apple has been in ongoing talks with Samsung to end their patent disputes. Finally, there are reports the company has bought mapping program HopStop in an effort to bolster its mapping tools. Apple stock is down almost 30% from last year and 40% from its peak last September. Apple earnings are expected to be $7.31 a share down from $9.32 a year ago, but on revenue that almost matches the same period last year.

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