A bunch of encouraging earnings from major companies and positive economic data from China drove the major indices into positive territory. After yesterday’s decent gains the Dow is around 2% below its highest level. The Street received mixed manufacturing data from overseas. Euro-zone PMI numbers disappointed investors whereas China’s preliminary PMI came in above expectations. On the home front, the number of Americans filing for unemployment benefits declined in the previous week. The consumer discretionary sector was the biggest gainer among the S&P 500 industry groups. Utilities stocks suffered maximum losses.
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The Dow Jones Industrial Average (:DJI) gained 0.6% to close the day at 15,509.21. The S&P 500 added 0.3% to finish yesterday’s trading session at 1,752.07. The tech-laden Nasdaq Composite Index increased 0.6% to end at 3,928.96. The fear-gauge CBOE Volatility Index (:VIX) declined 1.6% to settle at 13.20. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 4.9 billion shares, considerably lower than 2013’s average of 6.0 billion shares. Advancing stocks outnumbered the decliners. For 56% shares that advanced, 41% declined.
Shares of Ford Motor Company (NYSE:F) climbed 1.4% after the company announced its third quarter earnings. The company reported both earnings and revenue above the Street’s estimates. Encouraging third quarter earnings and an optimistic outlook for its European business helped the company raise its full-year worldwide earnings and margin outlook. The company’s net income declined 22% to $1.27, due to special charges amounting to $500 million. $250 million of these charges were spent on restructuring its European operations. Ford Motor’s revenues jumped 12% to $36 billion in the third quarter.
Multinational conglomerate, 3M Co (NYSE:MMM) also reported its quarterly numbers. Both earnings and revenue came in above the Street’s estimates. The company posted earnings per share of $1.78 per share in the third quarter, up from the year ago figure of$1.65 a share. Revenue jumped to $7.92 billion from $7.50 billion a year before.
On the negative side, shares of The Dow Chemical Company (NYSE:DOW) declined 1.0% after the company declared its quarterly numbers. The company’s third quarter profit jumped 17% but was below expectations. Revenue also fell below the Street’s expectations. Disturbances in the Middle East were cited as the primary cause for the company’s poor showing.
On the international front, manufacturing activity in China grew at its fastest pace in seven months in October. The preliminary HSBC China Manufacturing Purchasing Managers' Index for October increased to 50.9 from September’s final reading of 50.2, driven by robust new orders. On the other hand, manufacturing numbers out of Europe disappointed the Street. Data from Markit revealed that the purchasing managers' index for the euro zone declined to 51.5 from September’s figure of 52.2.
On the home front, the U.S. Department of Labor reported initial claims numbers. According to the report, initial claims declined 12,000 to 350,000 from the previous week’s revised figure of 362,000. This was above the consensus estimate of 343,000. The four week moving average increased 10,750 to 348,250 from the previous week’s revised average of 337,500. Computer problems in California have hampered the accuracy of initial claims reports since September.
The consumer discretionary sector was the biggest gainer among the S&P 500 industry groups and the Consumer Discretionary SPDR ( XLY) gained 1.0%. Stocks such as the Home Depot, Inc. (NYSE:HD), CBS Corporation (NYSE:CBS), Time Warner Inc (NYSE:TWX), Comcast Corporation (NASDAQ:CMCSA) and Time Warner Cable Inc (NYSE:TWC) added 2.3%, 0.6%, 0.7%, 1.7% and 0.7%, respectively.
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