Strong earnings from technology stocks created positive sentiment, lifting benchmarks into positive territory on Wednesday. Better-than-expected earnings from major companies propelled the Dow Jones to its highest level in five years. The US House of Representatives gave a green signal to the bill proposed by Republicans which will extend the debt limit to May 19. The technology sector witnessed a decent rally following robust earnings results from Google and IBM and was the major gainer among the S&P 500 industry groups.
The Dow Jones Industrial Average (DJI) gained 0.5% to close the day at 13,779.33. The Standard & Poor 500 (S&P 500) increased 0.2% to finish yesterday’s trading session at 1,494.81. The tech-laden Nasdaq Composite Index surged 0.3% to end at 3153.67.The fear-gauge CBOE Volatility Index (VIX) rose 0.2% to settle at 12.46. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.1 billion shares, lower than 2012’s daily average of 6.45 billion shares. Declining stocks outnumbered advancers on the NYSE; as for 46% stocks that rose, 50% moved lower.
Heartening earnings from major companies once again acted as a catalyst to markets and the S&P 500 finished just short of its all time closing high. The index also finished in the green for the sixth consecutive day. The performance of the blue-chip index in January 2013 till date is nearly identical to the performance delivered in January 1997.
International Business Machines Corp. (NYSE:IBM) posted robust revenue and earnings results, beating the Street’s estimates, following which the company’s shares surged 4.4%. Emerging countries like Brazil, Russia, India and China contributed to the company’s revenue to a major extent. The company also raised its earnings guidance for 2013. Google Inc. (NASDAQ:GOOG) posted better-than-expected earnings following which the company’s shares increased 5.5%. Technology bellwether Apple Inc. (NASDAQ:AAPL) was expected to report its earnings after Wednesday’s closing bell.
McDonald's Corporation (NYSE:MCD) released earnings before the markets opened yesterday. Revenues and earnings of the company surpassed the Street’s estimates following which the company’s shares surged 0.6%. For first quarter 2013, the company has issued guidance of lower revenues. However, the company’s CEO Don Thompson said the company expects to grow total sales between 3% and 5%.
On Wednesday, the bill which was proposed by Republicans in the US House of Representatives was passed, extending the US debt limit to May 19. However, it is yet to be approved by President Barack Obama and the Senate. Moreover, the Speaker of the United States House of Representatives, John Boehner, said: “It is time for Congress to get serious about this, and this is first step in an effort to bring real fiscal responsibility to Washington. It is real simple: no budget, no pay.”
Following the results of IBM and Google, the Technology SPDR (ETF) (XLK) gained about 1.1%. Shares of IT majors, Microsoft Corporation (NYSE:MSFT), Apple Inc. (NASDAQ:AAPL), Digi International Inc. (NASDAQ:DGII) and Red Hat, Inc. (NYSE:RHT) witnessed a growth of 1.7%, 1.8%, 1.14% and 2.6%, respectively.
The biggest loser for the S&P 500 was the Materials Select Sector SPDR (XLB), declining by 0.6%. Stocks such as E I Du Pont De Nemours And Co (NYSE:DD), FMC Corporation (NYSE:FMC), Eastman Chemical Company (NYSE:EMN), PolyOne Corporation (NYSE:POL) and A. Schulman Inc (NASDAQ:SHLM) decreased 0.7%, 0.8%, 0.7%, 1.7% and 0.2%, respectively.
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for July 25th, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for July 24th, 2014 | John Ransom