Markets were closed on Monday for Martin Luther King Day. Also, no economic data was released. After a mixed finish last week that was dominated by corporate results, investors are bracing for another busy week with 69 S&P 500 companies scheduled to release their performances this week.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article
Markets closed last week with gains only for the blue-chip index. The S&P 500 and Nasdaq closed the week with losses of 0.2% and 0.6%, respectively, but Dow rose 0.1%. Dow’s weekly gains, the first one this year, was ensured after it finished in the green on Friday riding on the back of a 3.6% jump in key component American Express Company (NYSE:AXP). AmEX reported a more than double jump in its fourth-quarter profit.
However, Friday’s action was largely dominated by dismal earnings results and forecasts. Bellwethers like Intel Corporation (NASDAQ:INTC) and General Electric Company (NYSE:GE) hardly announced anything to drive the bullish mood. Intel lagged earnings estimates and forecasted weak revenues. Also, General Electric dented the mood on Friday after its profit margins in the industrial segment fell short of its own guidance. Separately, United Parcel Service, Inc. (NYSE:UPS) chopped its profit estimates. It forecasted fourth quarter earnings at $1.25 a share, down from its prior projection of $1.43.
In fact, the whole of last week saw some major earnings released, mostly from the financial sector. Starting with JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo & Co (NYSE:WFC), which cheered the markets with positive results, we ran through earnings releases from Bank of America Corp (NYSE:BAC), Goldman Sachs Group Inc (NYSE:GS), Morgan Stanley (NYSE:MS) and Citigroup Inc (NYSE:C).
This week is also going to be a very busy one on the earnings front and the tech sector has a lot of action in the pipeline. International Business Machines Corporation (NYSE:IBM) will report today and so will Verizon Communications Inc. (NYSE:VZ). eBay Inc. (NASDAQ:EBAY) and Microsoft Corporation (NASDAQ:MSFT) are among the other tech heavyweights due to report their performances this week.
Also, Netflix, Inc. (NASDAQ:NFLX), the biggest gainer in the S&P 500 will report on Wednesday and the other top performer last year Delta Air Lines Inc. (NYSE:DAL) will release results today. Other earnings releases include results from Starbucks Corporation (NASDAQ:SBUX), McDonald’s Corp. (NYSE:MCD), Johnson & Johnson (NYSE:JNJ) and The Procter & Gamble Company (NYSE:PG).
Going back to last week’s events, the S&P 500 index had hit all-time high. It rose to 1,848.38 last Wednesday and narrowly beat its previous record high of 1,848.36, which was scored on the final day of last year.
Among economic data, investors were greeted with positive manufacturing data. The Federal Reserve Bank of New York released the monthly survey of manufacturers in New York State that noted faster pace of expansion for NY manufacturers’ business activity in recent months. Also, the U.S. Bureau of Labor Statistics reported that the seasonally adjusted Producer Price Index (PPI) for finished goods increased 0.4% in December. The Federal Reserve’s Beige Book noted that the economy expanded at a ‘moderate pace’ from late November through end of last year.
Separately, markets scored big gains on Tuesday that came mostly on the back of retail sales data. The U.S. Department of Commerce reported a 0.2% increase in the advance estimates of U.S. retail and food services sales for December.
On Friday, the U.S. Census Bureau and the Department of Housing and Urban Development jointly reported that building permits were down 3% from November and housing starts were down 9.8% in the same timeframe to a seasonally adjusted annual rate of 999,000 in December. Separately, industrial production gained 0.3% in December. Fourth quarter industrial production jumped at a yearly rate of 6.8%, the fastest gain in about three and half years. On the other hand, the Thomson Reuters/University of Michigan’s preliminary reading of consumer sentiment stood at 80.4 in January.
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