Benchmarks ended mostly in the green on Thursday driven by encouraging corporate results and higher-than-expected economic numbers. The Nasdaq was boosted by strong gains in Apple, a day after it reported better-than-expected earnings. However, the Dow finished flat after Verizon Communications and 3M Company’s disappointing first quarter earnings restricted its advance. Meanwhile, there were reports of military tension near the Ukraine border.
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The Dow Jones Industrial Average (DJI.V) remained flat at 16,501.65. The Standard & Poor (S&P 500) rose 0.2% to finish at 1,878.61. The tech-laden Nasdaq Composite Index increased 0.5% to 4,148.34. The fear-gauge CBOE Volatility Index (:VIX) went up 0.4% to settle at 13.32. Total volume for the day was roughly 6.07 billion shares, lower than this month’s average of 6.59 billion. Declining stocks were outnumbered by advancing stocks on the NYSE. For 47% stocks that declined, 49% advanced.
Benchmarks advanced for the day primarily boosted by Apple Inc.’s (NASDAQ:AAPL) upbeat second quarter results, that were reported after the closing bell on Wednesday. Shares of Apple jumped 8.2%, the biggest gain since August. Apple reported quarterly earnings of $11.62 per share, which beat the Zacks Consensus Estimate of $10.22 per share by 13.8%. Revenues too rose 4.7% year over year to $45.6 billion, well ahead of the Zacks Consensus Estimate of $43.4 billion. In addition, the company announced additional share buyback program, higher dividend payout and a surprising 7:1 stock split.
Apple’s board of directors expanded the size of share buyback program by another $30.0 billion to $90.0 billion. Apple also increased its quarterly dividend payout by 8.0% to $3.29 per share. The iPad maker also announced a 7:1 stock split that will occur in June this year.
Facebook, Inc. (NASDAQ:FB) too reported upbeat results after the closing bell on Wednesday, The social media giant reported first quarter earnings of 25 cents per share (discounting for stock-based compensation) on $2.50 billion sales, beating expectations of 18 cents per share and $2.36 billion in sales. However, shares of Facebook dropped 0.8%. Overall, the Technology Select Sector SPDR (NYSE:XLK) rose 0.8%.
Positive earnings results from bellwether Caterpillar Inc. (NYSE:CAT) also added to the bullish sentiment. Caterpillar reported first quarter 2014 earnings per share of $1.61, outpacing the Zacks Consensus Estimate of $1.25 per share. Shares of Caterpillar rose 1.8%. After the closing bell, Microsoft Corporation (NASDAQ:MSFT) also reported upbeat quarterly results.
However, bellwethers Verizon Communications Inc. (NYSE:VZ) and 3M Company (NYSE:MMM) failed to impress with their earnings results. Verizon Communications posted first-quarter 2014 adjusted earnings of 84 cents per share, missing the Zacks Consensus Estimate of 87 cents. 3M Company reported first quarter 2014 earnings of $1.79 per share, in line with the Zacks Consensus Estimate. Shares of Verizon Communications and 3M Company decreased 2.4% and 0.9%, respectively.
Coming to economic data, the US Census Bureau said new orders for manufactured durable goods in March had increased 2.6%, its biggest gain in four months. The increase in durable goods order was also more than the consensus expectation of a 1.8% increase. Excluding transportation, durable orders increased 2.0% in March. Unfilled orders for manufactured durable goods in March were up 0.6%.
However, initial claims data was disappointing. The U.S Department of Labor reported that seasonally adjusted initial claims increased 24,000 to 329,000 in the week ending April 19. This rise in application for unemployment benefits was more than the consensus expectations of initial claims increasing to 312,000.
Investors also kept a close eye on recent developments in Ukraine. Russia started military drills near the borders of Ukraine after Ukrainian forces reportedly killed five-pro Moscow rebels. Earlier, in Kramatorsk, Ukrainian forces stormed an airport held by pro-Russian militants. Ukraine’s forces also countered militants in the eastern Donetsk region. The U.S. has supported Ukraine in its mission to uproot pro-Russian militants occupying government buildings.
Six out of 10 sectors of the S&P 500 ended in the green. The SPDR S&P Homebuilders ETF (XHB) led the advance as the sector rose 1.1%. Key stocks from the sector such Key housing stocks from the sector such as PulteGroup, Inc. (NYSE:PHM), Lennar Corp. (NYSE:LEN), DR Horton Inc. (NYSE:DHI) and Beazer Homes USA Inc. (NYSE:BZH) increased 2.3%, 3.5%, 8.3% and 1.9%, respectively.
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