From Monday, April 27 2015
Benchmarks ended higher on Friday boosted by upbeat quarterly results from Amazon and Microsoft. Friday’s gains helped the S&P 500 and the Nasdaq close at record high levels. Benchmarks also ended the week on a positive note with the Nasdaq registering its biggest weekly gain since Oct 2014.
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 0.1% to close at 18,080.14. The Standard & Poor’s 500 (S&P 500) increased 0.2% to 2,117.69. The tech-laden Nasdaq Composite Index closed at 5,092.08; gaining 0.7%. The fear-gauge CBOE Volatility Index (VIX) dropped 1.5% to settle at 12.29. A total of about 3.3 billion shares were traded on NYSE on Friday. Advancers outpaced declining stocks on the NYSE. For 49% stocks that advanced, 47% declined.
The S&P 500 gained for the fifth straight session on Friday and closed above its previous record close of 2117.39 set on Mar 2. The Nasdaq also registered its second record close in a row, exceeding the record achieved during the dot-com era. The last time the S&P 500 and the Nasdaq finished at record highs on the same day was Dec 31, 1999. The Dow also gained 21.45 points to remain just 208 points shy of its all-time high of 18,288.63, achieved on Mar 2 this year.
Gains by heavyweights including Amazon.com Inc. (AMZN - Analyst Report) and Microsoft Corporation (MSFT - Analyst Report) helped benchmarks end higher on Friday. Shares of Amazon.com surged 14.1% after the company reported a 12 cents loss for the first quarter, narrower than the Zacks Consensus Estimate of a loss of 13 cents. Revenues of $22.72 billion were also more than the Zacks Consensus Estimate of $22.54 billion.
Microsoft’s shares also soared 10.5% after the company posted third quarter 2015 earnings per share of 62 cents beating the Zacks Consensus Estimate of 51 cents. Revenues of $21.73 were also ahead of the Zacks Consensus Estimate by 3.3%.
Meanwhile, internet information provider, Google Inc. (GOOGL - Analyst Report) saw its shares gain 2.9% as management emphasized YouTube traction and mobile growth. However, first-quarter earnings of $5.20 missed the Zacks Consensus Estimate by 18 cents. Revenues of $17.26 billion also fell short of the Zacks Consensus Estimate by 1.1%.
Separately, shares of Starbucks Corporation (SBUX - Analyst Report) advanced 4.9% after the specialty eatery service provider reported second-quarter sales of $4.56 billion that beat the Zacks Consensus Estimate of $4.51 billion. Starbucks’ earnings per share of 33 cents were in line with the Zacks Consensus Estimate.
Including these reports, 202 S&P 500 members posted first quarter earnings up 8.7% on essentially flat revenues, with 68.3% beating earnings per share estimates. Among the 202, 44.1% were able to come in ahead of top-line expectations.
On the economic front, the U.S. Department of Commerce reported that new orders for manufactured durable goods jumped 4% to $240.2 billion in March, more than the consensus estimate of a 0.5% rise. Higher demand for autos, commercial jets and military hardware were cited to be the reason behind the jump.
Yesterday, 6 out of 10 sectors of the S&P 500 ended in the green. The Consumer Discretionary Select Sector SPDR (XLY) gained 1.4%, the highest among the S&P 500 sectors. Key stocks from the sector such as The Walt Disney Company (DIS - Analyst Report), Comcast Corporation (CMCSA - Analyst Report), McDonald's Corp. (MCD - Analyst Report) and Time Warner Inc. (TWX - Analyst Report) increased 0.5%, 0.7%, 1.8% and 0.6%, respectively.
For the week, the S&P 500, the Dow and the Nasdaq gained 1.8%, 1.4% and 3.2%, respectively. Benchmarks ended in the green for the week following China’s stimulus measures, prospects of Visa gaining access to China, McDonald’s turnaround plans and upbeat housing data.
Investors also continued to assess a slew of quarterly results. Positive first quarter earnings results from Morgan Stanley (MS - Analyst Report), Halliburton Company (HAL - Analyst Report), Hasbro Inc. (HAS - Analyst Report), Caterpillar Inc. (CAT - Analyst Report), Pepsico, Inc. (PEP), The Coca-Cola Co (KO), The Boeing Company (BA), E. I. du Pont de Nemours and Company (DD), International Business Machines Corporation (IBM), United Technologies Corporation (UTX) and Kimberly-Clark Corporation (KMB) added to the bullish sentiment.
Meanwhile, new deal between Mylan N.V. (MYL) and Teva Pharmaceutical Industries Limited (TEVA) boosted bio-tech stocks, which eventually had a positive impact on the Nasdaq. Separately, energy shares gained on Thursday after domestic crude oil price touched its highest level for the year. Oil prices had moved north on Thursday after tensions in Yemen raised concerns about Middle East oil supplies.