Stock Market News for April 23, 2015 – Zacks Investment Research
Benchmarks ended higher on Wednesday following the prospect of Visa’s potential access to China, McDonald’s turnaround plans and upbeat housing data. Broad based gains among technology shares also had a positive impact on the markets. Meanwhile, investors continued to assess a mixed bag of corporate earnings results.
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The Dow Jones Industrial Average (DJI) gained 0.5% to close at 18,038.27. The Standard & Poor’s 500 (S&P 500) increased 0.5% to 2,107.96. The tech-laden Nasdaq Composite Index closed at 5,035.17; gaining 0.4%. The fear-gauge CBOE Volatility Index (VIX) dropped 4.1% to settle at 12.71. A total of about 6 billion shares were traded on Wednesday, less than the month to date average of 6.2 billion. Advancers outpaced declining stocks on the NYSE. For 55% stocks that advanced, 40% declined.
Wednesday’s gains helped benchmarks inch closer to their record closes. The Dow is 1.4% below its closing high of 18,288.63. The S&P 500 is also 0.4% away from its record close of 2117.39. The Nasdaq too is 0.3% below its 15-year old record closing high of 5048.62.
Prospects of Visa Inc.’s (V – Analyst Report) entry into China’s bank card-clearing market boosted investor sentiment. The Chinese government declared that it will allow foreign players to clear domestic bank card transactions. Currently, China UnionPay Co. is the only clearing service provider for yuan-denominated bank-card payments.
Following the news, shares of Visa surged 4.1%. The world’s biggest payments network emerged as the highest gainer among the Dow components. Shares of Visa’s rival, MasterCard Incorporated (MA – Analyst Report) also went up 3.9%.
Talks of a turnaround plan at McDonald’s Corp. (MCD – Analyst Report) were also welcomed by investors. The company stated that it is developing a turnaround plan to improve its comparable same-store sales performance. It intends to share the initial details of the plan on May 4, 2015. During the first quarter, global comps of the hamburger giant declined 2.3% year over year. The company expects comps to remain negative for the month of April as well.
Meanwhile, McDonald’s reported first quarter earnings per share of $1.01, less than the Zacks Consensus Estimate of $1.05. Despite discouraging earnings results, McDonald’s turnaround plans helped its shares gain 3.1%, the second highest among the Dow components.
Among other earnings news, shares of The Coca-Cola Co (KO – Analyst Report) gained 1.3% after the company posted first quarter earnings per share of 48 cents, beating the Zacks Consensus Estimate of 43 cents. However, shares of The Boeing Company (BA – Analyst Report) dropped 1.4% despite reporting first quarter earnings per share of $1.97 that beat the Zacks Consensus Estimate of $1.81.
Including these reports, 121 S&P 500 members posted first quarter earnings up 11.2% on 1% revenue gains, with 71.1% beating earnings per share estimates. Among the 121, 35.5% were able to come ahead of top-line expectations.
Meanwhile, encouraging data on existing home sales added to the bullish sentiment. The National Association of Realtors reported existing home sales rose 6.1% to a seasonally adjusted annual rate of 5.19 million in March from February’s upwardly-revised figure of 4.89 million. This was also more than the consensus estimate of 5.03 million. Existing home sales rose to the highest level in March since Sep 2013.
Yesterday’s gains were broad based, with 9 out of 10 S&P 500 sectors ending in the green. The Technology Select Sector SPDR (XLK) advanced 1%, the highest gainer among the S&P 500 sectors. Key holdings from the sector including Apple Inc. (AAPL – Analyst Report), Microsoft Corporation (MSFT – Analyst Report), AT&T Inc. (T – Analyst Report), Google Inc (GOOGL – Analyst Report) and International Business Machines Corporation (IBM – Analyst Report) increased 1.4%, 0.8%, 0.6%, 1.2% and 0.7%, respectively.
The Financial Select Sector SPDR (XLF) gained 0.7% and was the second biggest gainer among the S&P 500 sectors. Key holdings from the sector including Wells Fargo & Company (WFC – Analyst Report), JPMorgan Chase & Co. (JPM – Analyst Report), Bank of America Corporation (BAC), Citigroup Inc. (C) and U.S. Bancorp (USB) increased 0.7%, 1%, 1.6%, 1.2% and 0.8%, respectively.
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Stock Market News for April 23, 2015 – Zacks Investment Research