Stock Market News for July 25, 2014 – Zacks Investment Research
However, shares of General Motors Company (GM – Analyst Report) dropped 4.5% after the company reported second quarter 2014 adjusted earnings of 58 cents per share, missing the Zacks Consensus Estimate of 78 cents per share. The auto manufacturer reported disappointing second-quarter results largely due to recall costs that chopped $1.5 billion from the company’s bottom line. Further, the company had to bear pre-tax charges of $400 million in order to compensate victims of ignition-switch related crashes.
Caterpillar Inc. (CAT – Analyst Report) reported second quarter revenues of $14.1 billion, short of the Zacks Consensus Estimate of $14.4 billion. Revenues also declined 3% year over year. Caterpillar’s shares dropped 3.1%.
3M Company (MMM – Analyst Report) reported second-quarter 2014 earnings per share of $1.91. Earnings per share were in line with the Zacks Consensus Estimate. Shares of 3M went up 0.3%.
S&P 500’s biggest decliner was DR Horton Inc. (DHI – Analyst Report). Shares of the homebuilder tumbled 11.5% after the company reported a decline in its net income for the third quarter ending June 30. Earnings were 32 cents a share, less than the Zacks Consensus Estimate of 49 cents a share. Earnings per share were also less than year-ago earnings of 42 cents.
Separately, a report released by the U.S. Census Bureau and the Department of Housing and Urban Development revealed sales of new single-family houses decreased 8.1% from May’s revised rate of 442,000 to seasonally adjusted annual rate of 406,000 in June. New home sales registered its biggest drop in almost a year. The drop in new home sales was in contrast to the consensus estimate of a rise to 479,000.
Housing data and DR Horton’s dismal results had a negative impact on homebuilder stocks. The SPDR S&P Homebuilders (XHB) declined almost 1.7%, the biggest decliner among the S&P 500 sectors. Key housing stocks from the sector such as Toll Brothers Inc. (TOL – Analyst Report), PulteGroup, Inc. (PHM – Analyst Report), Lennar Corp. (LEN – Analyst Report) and KB Home (KBH – Analyst Report) decreased 4.1%, 3.0%, 3.1% and 3.3%, respectively. Overall, 5 out of 10 sectors of the S&P 500 ended in the red.
However, initial claims data was encouraging. The Labor Department said initial claims declined 19,000 to 284,000 in the week ending Jul 19. This claim for unemployment benefits was at the lowest level since Feb 18, 2006. The 4-week moving average decreased to 302,000 from the previous week’s revised average of 309,250. This is the lowest level for this metric since May 19, 2007.
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Stock Market News for July 25, 2014 – Zacks Investment Research
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