Benchmarks eked out gains during Friday’s trading session as investors remained skeptical over earnings and economic numbers due for release this week. Meanwhile, a bunch of mixed earnings results were released on Friday which dampened investor sentiment. On the international front, French consumer confidence data released on Friday shows traces of improvement in the country’s economy. Of the top ten S&P 500 industry groups, health care gained the most. Materials were the biggest losers.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (:DJI) gained 3.22 points to close the day at 15,558.83. The S&P 500 added 0.1% to finish Friday’s trading session at 1,691.65. The tech-laden Nasdaq Composite Index increased 0.2% to end at 3,613.16. The fear-gauge CBOE Volatility Index (:VIX) declined 1.9% to settle at 12.72. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly in line with 2013’s average of 6.4 billion shares. Declining stocks outnumbered those advancing. For the 51% that declined, 45% advanced.
The Nasdaq has been the front runner of all the benchmarks this month. Monthly gains during July were recorded at the highest level in almost 18 months. This month, the S&P 500, the Dow Jones and the Nasdaq gained 5.3%, 4.4% and 6.2%, respectively. Profits were garnered on the back of better-than-expected earnings. Of all the S&P 500 companies which have declared results, 67.6% of them have them have beaten the Street’s expectations. Of the lot, about 56% of the companies have exceeded expectations in terms of revenue. Investors remained cautious on Friday since a string of economic reports are due next week. The most important ones include the Gross Domestic Product (GDP) for the second quarter and July nonfarm payrolls data.
On the earnings front, shares of Expedia Inc. (NASDAQ:EXPE) plunged nearly 27.4% after it posted disappointing results. Earnings of the online travel agency came down to 64 cents per share from 89 cents a share recorded in the year-ago quarter. Revenues of the company increased year over year to $1.21 billion from $1.04 billion. However, they fell short of the Street’s expectations. Losses suffered by the company are primarily attributable to 33% or $128 million rise in costs.
On the positive side, shares of Starbucks Corporation (NASDAQ:SBUX) gained 7.6% after it reported results that beat the Street’s expectations. Earnings of the company came in at $417.8 million or 55 cents per share, higher than the previous year’s earnings of $333.1 million or 43 cents a share. This was also above estimates of 53 cents per share. Revenues of the company increased to $3.74 billion, above expectations of $3.72 billion. Starbucks also increased its full year guidance of earnings per share in the range of $2.22 and $2.23 a share, from the earlier range of $2.12 and $2.18 a share.
Online retail giant, Amazon.com, Inc. (NASDAQ:AMZN) reported results which missed estimates. The company suffered this setback due to an increase in costs and currency headwinds. Revenues of the company increased 22% year over year to $15.70 billion, compared to the Street’s estimates of $15.73 billion. International sales grew by 13%, while sales from North America increased 30%.
On the international front, consumer sentiment data from France released by the National Institute of Statistics and Economic Studies (:INSEE) reflected the first increase in almost three months. Consumer confidence came in at 82, above economists’ expectations of 79. Consumer confidence increased on the back of a marginal improvement in employment numbers. The barometer measuring the households’ view on standard of living improved six points. Factory output of Euro Zone’s private industries, growth in the manufacturing sector of Germany composite Purchasing Managers’ Index and marginal increase in consumer confidence of France indicate improvements in the Euro Zone economy.
Of the top ten S&P 500 industry groups, health care sector gained the most. The Health Care SPDR (XLV) gained 0.7%. Stocks such as Johnson & Johnson (NYSE:JNJ), Merck & Co., Inc. (NYSE:MRK), Medtronic, Inc. (NYSE:MDT), Stryker Corporation (NYSE:SYK) and Zimmer Holdings, Inc. (NYSE:ZMH) increased 0.3%, 0.7%, 0.4%, 0.1% and 1.9%, respectively.
Material Stocks suffered maximum losses. The Materials Select Sector (XLB) lost 0.4%. Stocks such as Air Products & Chemicals, Inc. (NYSE:APD), Airgas, Inc. (NYSE:ARG), The Dow Chemical Company (NYSE:DOW), Eastman Chemical Company (NYSE:EMN) and Monsanto Company (NYSE:MON) declined 2.8%, 1.8%, 0.8%, 1.7% and 0.2%, respectively.
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