It was a choppy day on Wall Street as traders waited for a possible end to the budget stalemate in Washington. The Dow fell 0.8% and the S&P 500 dropped 0.7%, both snapping a four day winning streak. The Nasdaq was off by 0.5%. Senate talks remain on hold, while House Republicans are working to draft a bill of their own that could be voted on as soon as tonight. Unless a bargain is reached, the country is on course to reach its debt limit on Thursday. Meanwhile, the government shutdown is now in its 15th day.
Three blue chips reported earnings this morning with one beating, one matching, and one missing estimates. The miss came from Citigroup (C), which fell 1.5%, after citing a downturn in both fixed-income trading and its mortgage banking revenue. The company reported adjusted earnings of $1.02 a share when estimates had been for 2-cents more. Revenues were also below expectations at $18.216-billion versus $18.615-billion. Revenue from fixed-income trading fell 26% from a year earlier and 17% from the prior quarter. Citi's slump is similar to what competing banks JPMorgan and Wells Fargo reported in their earnings reports last Friday.
Coca-Cola (KO) shares fell 0.6% after meeting earnings estimates with 53-cents a share. Revenues were also close to estimates at $12.03-billion when the consensus was for $12.05-billion. Revenue was in fact down 3% from a year ago, but profits climbed 6% in that time. The company says that despite a challenging global economy, it has been selling more of its namesake sodas. Teas and waters have also been selling well.
Johnson & Johnson (JNJ) shares edged fractionally higher after beating estimates with adjusted earnings of $1.36 a share. Expectations had been for $1.32 a share. Revenue also beat at $17.6-billion versus $17.44-billion. J&J credited growth in its prescription drug business saying it compensated for declines in weaker units like medical devices and consumer products. Global drug revenue jumped almost 10% to $7.04 billion.
Domino's (DPZ) was among the other companies releasing quarterly results today. Shares fell 5.7% after the company reported earnings of 51-cents a share excluding items, a penny below estimates. Revenue, however, was slightly above expectations at $404.1-million versus $402.14-million. Same-store sales were better than expected climbing 5.4%.
Teradata (TDC) plunged 18% after the big-data firm lowered its outlook saying it now expects earnings of 69 or 70-cents a share for the quarter. Consensus had been for 82-cents. The revenue forecast has also been lowered. All this because of fizzling demand in Asia. Even prior to today's losses, shares of Teradata were down 17% in 2013.
Apple (AAPL) rose 0.5%, once again nudged towards $500 a share on its latest hire. Burberry CEO Angela Ahrendts is leaving the luxury retailer to become Apple's senior VP of retail and online stores. Her position is a new one, but largely fills a gap left when Ron Johnson departed Apple for J.C. Penney (JCP). While at Burberry, Ahrendts tripled sales and quadrupled the company's stock price.
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