Mostly positive earnings results on Thursday helped the S&P 500 and the Nasdaq end in the green. However, 3M’s not so encouraging performance adversely impacted the Dow. September’s decline in new orders for manufactured goods also dented investors’ sentiment.
The Dow Jones Industrial Average (DJI) dropped 0.1% to close at 26,805.53. The S&P 500 rose 0.2% or 5.77 points to close at 3,010.29. Meanwhile, the Nasdaq Composite Index closed at 8,185.80, increasing 0.8% or 66 points. The fear-gauge CBOE Volatility Index (VIX) decreased 2.2% to close at 13.71. Decliners outnumbered advancers on the NYSE by a 1.16-to-1 ratio. On Nasdaq, a 1.34-to-1 ratio favored decliners issues.
How Did The Benchmarks Perform?
The blue-chip Dow Jones index ended in the negative territory, dragged down by 4.1% drop in shares of 3M Company MMM as the industrial conglomerate lowered its full-year profit forecast. Strong earnings from Microsoft Corporation MSFT and PayPal Holdings, Inc. PYPL pushed their shares to rise 2% and 8.6% boosting the S&P 500 technology sector to trade higher.
In fact, the technology sector made the biggest among the 11 major S&P500 sectors. While, Twitter, Inc.’s TWTR 20.8% drop after the earnings call dragged the S&P500 communication service sector by 1.1%
Mixed Earnings Report
3M Company reported better-than-expected third-quarter 2019 earnings of $2.58 per share that beats the Zacks Consensus Estimate of $2.47. However, the company’s new sales were $7,991 million, a decline of 2% from the year-ago quarter. There was a 1.3% decrease in organic sales and softness could be seen in China end-markets. (Read More)
Microsoft reported first-quarter fiscal 2020 non-GAAP earnings of $1.38 per share surpassing the Zacks Consensus Estimate of $1.25. Earnings rose 21% on a year-over-year basis banking on better-than-expected demand for commercial cloud. (Read More)
Twitter reported third-quarter non-GAAP earnings of 17 cents per share missing the Zacks Consensus Estimate of 14 cents. The company’s earnings dropped 19% year over year. Twitter stated that issues related to legacy Mobile Application Promotion (MAP) product and problems with personalization and data settings affected the Q3 results. (Read more)
Comcast Corporation CMCSA reported third-quarter adjusted earnings of 79 cents that beats the Zacks Consensus Estimates by one cent. But, Comcast’s revenues of $26.83 billion miss the Zacks Consensus Estimate of $26.86 billion. The company lost 224,000 video customer and 65,000 voice customers this quarter. (Read More)
Tesla, Inc. TSLA reported earnings per share of $1.86 in third-quarter 2019 beating the Zacks Consensus Estimate of loss of 15 cents. The company’s success in the Q3 rests on continued volume growth and cost control, in fact, over the earnings call Tesla reported that its new Shanghai factory is “ready for production.” (Read More)
Shares of Tesla gained 17.7% and Microsoft rose nearly 2%. While, shares of Twitter, Comcast and 3M dropped 20.8%, 1.9% and 4.1%, respectively. Tesla, Microsoft and Twitter carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
New Orders Fall More-than-expected in September
On Oct 24, the U.S. Census Bureau reported that new orders for manufactured goods in September. A 1.1% drop was seen against consensus forecast of 0.7% decline. Orders for long-lasting or durable goods fell for the first time in three months in September, along with a contraction in business investment. This weak data is reflecting the softness in manufacturing, in turn weighing on the U.S. economy.
A 5.4% decline in orders has been reported over the past 12 months, this is the biggest yearly decline since 2016. Orders for new autos and parts declined 1.6%, commercial planes orders dropped 12% and non-aviation military goods such as tanks, ships and defense systems saw a 4.5% loss in orders. The U.S.-China trade war has scarred the global economy leaving businesses hunting for new suppliers and customers.
Stocks That Made Headline
Cabot Q3 Earnings Beat, FCF Soars, Dividend Raised
Cabot Oil & Gas Corporation COG reported third-quarter 2019 net income per share — adjusted for special items — of 29 cents, surpassing the Zacks Consensus Estimate of 27 cents and the year-ago figure of 25 cents. (Read More)
Alaska Air Group Q3 Earnings & Revenues Beat, Up Y/Y
Alaska Air Group, Inc. ALK reported better-than-expected earnings and revenues in the third quarter of 2019. Following the release, shares of the company inched up 1.3% during after-hours trading on Oct 24. (Read More)
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