Stock Market News for April 29, 2015 – Zacks Investment Research
Benchmarks finished mixed on Tuesday amid a slew of positive earnings results, weak consumer confidence report and decline in biotech stocks. The Dow and the S&P 500 registered modest gains banking on encouraging earnings results. IBM’s move to increase its quarterly dividend boosted the blue-chip index. However, the Nasdaq ended in the red after biotech stocks took losses. Decline in Apple’s shares also dragged the Nasdaq down. Meanwhile, investors continued to keep an eye on the outcome of the FOMC meeting.
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The Dow Jones Industrial Average (DJI) gained 0.4% to close at 18,110.14. The Standard & Poor’s 500 (S&P 500) increased 0.3% to 2,114.76. The tech-laden Nasdaq Composite Index closed at 5,055.42; declining 0.1%. The fear-gauge CBOE Volatility Index (VIX) dropped 5.4% to settle at 12.41. A total of about 3.5 billion shares were traded on NYSE on Tuesday. Advancers outpaced declining stocks on the NYSE. For 61% stocks that advanced, 36% declined.
Investors continued to assess a flurry of first quarter earnings results. Shares of Merck & Co. Inc. (MRK – Analyst Report) climbed 5% after the drug maker reported first quarter earnings per share of 85 cents, beating the Zacks Consensus Estimate of 75 cents. Another drug maker, Pfizer Inc. (PFE – Analyst Report) posted first quarter earnings per share of 51 cents, a penny above the Zacks Consensus Estimate. However, shares of Pfizer dropped 0.3% after the company lowered its 2015 earnings guidance. Meanwhile, Aetna Inc.’s (AET – Analyst Report) shares gained 3.2% after the healthcare benefit company reported first-quarter earnings per share of $2.39 that beat the Zacks Consensus Estimate of $1.96.
United Parcel Service, Inc. (UPS – Analyst Report) shares gained 3.4% after the company reported first quarter earnings per share of $1.12 per share that came ahead of the Zacks Consensus Estimate of $1.09. Shares of Coach, Inc. (COH – Analyst Report) plunged 6.3% despite posting third-quarter fiscal 2015 earnings of 36 cents a share that came a penny ahead of the Zacks Consensus Estimate.
Internet information provider, Twitter, Inc. (TWTR – Analyst Report) saw its shares tank 18.2% after the company’s quarterly results were leaked by Selerity. Twitter reported a loss of 20 cents for the first quarter, narrower than the Zacks Consensus Estimate by a penny.
After Monday’s closing bell, Apple Inc. (AAPL – Analyst Report) had reported second quarter earnings per share of $2.33, beating the Zacks Consensus Estimate by $2.19. Higher revenues generated from iPhone and Mac helped Apple post strong second-quarter fiscal 2015 earnings results. However, shares of Apple dropped 1.6% on Tuesday, which eventually had a negative impact on the Nasdaq.
Weakness among biotech shares also weighed on the Nasdaq. Bio-tech stocks including Biogen Inc. (BIIB – Analyst Report), Vertex Pharmaceuticals Incorporated (VRTX – Analyst Report) and Regeneron Pharmaceuticals, Inc. (REGN – Analyst Report) decreased 3.8%, 1.9% and 1.5%, respectively. Overall, iShares Nasdaq Biotechnology (IBB) declined almost 1.2%.
Coming back to earnings results, about 237 S&P 500 members have reported first quarter earnings results so far. Among the 237 members, first quarter earnings are up 9.9% on essentially flat revenues, with 68.8% beating earnings per share estimates and a below-average 42.2% coming ahead of top-line expectations.
Separately, International Business Machines Corporation (IBM – Analyst Report) raised its quarterly dividend by 18%, its biggest increase in five years. IBM’s move to increase its dividend boosted the Dow. Shares of IBM gained 1.9%.
Yesterday’s gains were broad based, with 9 out of 10 S&P 500 sectors ending in the green. The Utilities Select Sector SPDR (XLU) advanced 0.7%, the highest gainer among the S&P 500 sectors. Key utilities stocks including NextEra Energy Inc (NEE – Analyst Report), Exelon Corporation (EXC), Southern Company (SO), PG&E Corporation (PCG) and Duke Energy Corporation (DUK) increased 0.3%, 1.1%, 0.8%, 1.4% and 0.8%, respectively.
Meanwhile, investors received discouraging report on consumer confidence. The Conference Board reported that Consumer Confidence Index declined to 95.2 in April from 101.4 in March. The number was in contrast to the consensus estimate of the index increasing to 102.6.
Investors also remained focused on the Federal Open Market Committee meeting, scheduled to end today. Investors are looking for clues on the timing of interest rate hike. While “several” Fed officials in their last meeting favored a rate hike in June, others had opined a rate hike isn’t necessary until later this year.
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Stock Market News for April 29, 2015 – Zacks Investment Research
