Earnings in focus as Apple weighs; Boeing lifts Dow

Updated - January 16, 2018 at 10:10 PM.

boeing

Quarterly results were the main driver for Wall Street on Wednesday as a decline in Apple shares weighed on the S&P 500 and Nasdaq, while the price-weighted Dow Industrials was buoyed by gains in Boeing.

Apple , the world’s largest exchange-traded company, fell 2.2 per cent after it acknowledged that strong demand for its iPhone 7 Plus caught the company off-guard and it was struggling to keep up.

On the other hand,

Boeing shares hit their highest level since December 31 after the planemaker reported a jump in quarterly profit despite slower sales. Boeing closed up 4.7 per cent at $145.54.

S&P 500 earnings have so far surprised on the upside, with the blended growth estimate at 2.2 per cent, from a 0.5 per cent decline expected at the start of this month. Of the companies that have reported, 74 per cent have beaten analyst expectations - above the 70 per cent beat rate over the past four quarters, according to Thomson Reuters I/B/E/S.

“There’s an expectation that when we finish the season that the earnings recession will be abated and that should be positive for the market going forward,” said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

She said, however, that a number of earnings misses left the market in a tight range and in search of a stronger catalyst.

“The market looks tired,” Krosby said. “Breadth has been narrowing and that has a number of (technical analysts)telegraphing caution.”

The number of weekly 52-week highs on the New York Stock Exchange has diminished sharply from the year’s peak in late June, at more than 1,500, to less than 400 last week and just 262 so far this week.

The Dow Jones industrial average rose 30.06 points, or 0.17 per cent, to 18,199.33, the S&P 500 lost 3.73 points, or 0.17 per cent, to 2,139.43 and the Nasdaq Composite dropped 33.13 points, or 0.63 per cent, to 5,250.27.

About 6.6 billion shares changed hands in US exchanges, above the 6.4 billion daily average over the last 20 sessions.

Chipotle Mexican Grill shares slumped 9.3 per cent after the restaurant chain operator reported a bigger-than-expected drop in quarterly sales at established restaurants.

Edwards Lifesciences was the biggest loser on the S&P 500, falling 17.1 per cent after the medical device maker’s third-quarter sales missed expectations.

On the positive column, Mondelez added 3.6 per cent to $44.32 after its quarterly profit beat estimates and it raised its profit forecast for the year.

GDP growth data

Earlier, economic data showed new home sales unexpectedly rose and both wholesale and retail inventories increased in September, while the goods trade deficit narrowed sharply, suggesting a stronger pick-up in economic growth in the third quarter than is currently anticipated.

Declining issues outnumbered advancing ones on the NYSE by a 1.83-to-1 ratio; on Nasdaq, a 2.21-to-1 ratio favoured decliners.

The S&P 500 posted 9 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 55 new highs and 77 new lows.

(Reporting by Rodrigo

Published on October 27, 2016 03:50