Stock Market News for October 15, 2014
Benchmarks finished almost unchanged on Tuesday as investors weighed upbeat corporate results against a drop in energy shares. While news about better-than-expected third quarter earnings results boosted the markets, drop in energy shares erased most of the gains. Energy shares took a beating after oil prices plunged to its lowest level in last two years. The S&P 500 and the Nasdaq settled in the green, but the blue-chip index closed marginally lower.
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The Dow Jones Industrial Average (DJI.V) declined a meager 0.04%, to close at 16,315.19. The Standard & Poor 500 (S&P 500) increased 0.2% to close at 1,877.70. The tech-laden Nasdaq Composite Index closed at 4,227.17; gaining 0.3%. The fear-gauge CBOE Volatility Index (:VIX) dropped 7.5% to settle at 22.79. A total of 5.1 million shares were traded on NYSE on Tuesday. Advancers outpaced declining stocks on the NYSE. For 59% stocks that advanced, 38% declined.
Benchmarks started the day on a positive note following encouraging corporate results. Among the financial companies, Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Wells Fargo & Company (WFC) posted upbeat quarterly earnings results. Citigroup’s adjusted earnings per share for third-quarter 2014 came in at $1.15, outpacing the Zacks Consensus Estimate of $1.12. Further, earnings compared favorably with the year-ago figure of $1.02 per share.
JPMorgan Chase came out with earnings of $1.62 per share, beating the Zacks Consensus Estimate of $1.39. The number also compares favorably with earnings of $1.42 per share in the year-ago quarter.
Wells Fargo, driven by top-line growth, earned $1.02 per share in third-quarter 2014, improving from 99 cents earned in the year-ago quarter. However, the reported figure was in line with the Zacks Consensus Estimate.
While shares of Citigroup went up 3.2%, shares of JPMorgan Chase and Wells Fargo dropped 0.3% and 2.7%, respectively.
Shares of Domino's Pizza, Inc. (DPZ) soared 11.3% after the company reported better-than-expected third quarter results on earnings and revenues. The pizza chains’ diluted earnings per share of 63 cents for the third quarter was more than the Zacks Consensus Estimate of 61 cents. The company’s revenues of $446.6 million during the same period beat the Zacks Consensus Estimate of $436.2 million.
A rebound in airline stocks also boosted the markets. On Monday, airline stocks were hit hard by concerns that fears about an Ebola outbreak might hamper demand for travel-related services.
Shares of U.S. airline companies such as Delta Air Lines Inc. (DAL), United Continental Holdings, Inc. (UAL), American Airlines Group Inc. (AAL), The Boeing Company (BA) and Southwest Airlines Co. (LUV) surged 6.1%, 6.5%, 10.3%, 1.5% and 3.9%, respectively.
The Industrial Select Sector SPDR (XLI) was the biggest gainer among the S&P 500 sectors. The sector gained 1.4%. Key industry stocks including General Electric Company (GE), Union Pacific Corporation (UNP), 3M Company (MMM) and United Technologies Corporation (UTX) increased 0.6%, 2.1%, 0.9% and 0.8%, respectively.
However, energy shares suffered losses due to decline in oil prices. The WTI crude oil price plunged 4.8% to $81.84 per barrel, its lowest close in more than two years. The price of Brent crude oil dropped 4.5% to settle at $85.04 per barrel, sliding to its lowest level since 2010. Oil prices nosedived on Tuesday after International Energy Agency trimmed its forecast for oil demand for both 2014 and 2015.
The Energy Select Sector SPDR (XLE) was the biggest loser among the S&P 500 sectors. The sector dropped 1.3%. Key energy stocks including Halliburton Company (HAL), Chesapeake Energy Corporation (CHK), EOG Resources, Inc. (EOG), and Chevron Corporation (CVX) declined 1.3%, 1.9%, 0.7% and 2%, respectively.
This drop in energy stocks compelled benchmarks to give away most of their early gains. While, the S&P 500 and the Nasdaq managed to settle in the green, the Dow ended in the red zone.
Weakness in the health care sector also had a negative impact on the markets. Shares of Johnson & Johnson (JNJ) dropped 2.1% despite posting positive earnings results and raising its 2014 earnings guidance. The company’s third-quarter 2014 earnings (excluding special items) were $1.50 per share, well above the Zacks Consensus Estimate of $1.42 per share. Following the release of better-than-expected third quarter results, JNJ increased its 2014 earnings outlook. The company expects earnings in the range of $5.92 - $5.97 per share, up from the previous guidance of $5.85 - $5.92 per share.
Shares of other healthcare stocks such as Alexion Pharmaceuticals, Inc. (ALXN), Gilead Sciences Inc. (GILD) and Vertex Pharmaceuticals Incorporated (VRTX) decreased 2%, 4.2% and 1.6%, respectively. The Health Care Select Sector SPDR ETF (XLV) dropped 0.8%. Overall, 7 out of 10 sectors of the S&P 500 ended in the green zone.
Read the analyst report on C
Read the analyst report on JPM
Read the analyst report on WFC
Read the analyst report on DPZ
Read the analyst report on JNJ
Read the analyst report on DAL
Read the analyst report on UAL
Read the analyst report on AAL
Read the analyst report on BA
Read the analyst report on LUV
Read the analyst report on GE
Read the analyst report on UNP
Read the analyst report on MMM
Read the analyst report on UTX
Read the analyst report on HAL
Read the analyst report on CHK
Read the analyst report on EOG
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