P&G weighs on Dow following earnings miss
US stocks ended in a mixed mode on Wednesday, 24 April 2013. While Dow ended the day with moderate losses, the Nasdaq and S&P 500 ended with minor gains. The day was dominated by earning and economic reports. Both set of reports checked in worse than expected and weighed on the Dow. The dollar weakened and the commodities had a bright day.
For the day, the Dow ended lower by 43.16 points (0.3%) at 14,676.3. Nasdaq ended higher by 0.32 points (0.01%) at 3,269.65. S&P 500 ended higher by 0.01 points (0%) at 1,578.79.
. Telecommunications, consumer staples and health care were the three declining sectors among the S&P 500's 10 major industry groups. Energy, materials and industrials ended higher for the day. Fifteen out of thirty Dow components ended lower led by P&G.
Technology stocks displayed relative strength. Apple ended little changed after beating on earnings and revenue. Although the company's results surprised to the upside, its gross margin was reported on the low end of estimates. In addition, Apple lowered its third quarter revenue and gross margin guidance below consensus. Also of note, the company raised its quarterly dividend by 15%. However, the increased capital return program will be funded by taking on debt rather than repatriating its cash, which would be subject to U.S. corporate taxes.
Among major stocks under focus, Procter & Gamble sank 5.9%, leading the Dow lower after the consumer-products company's full-year earnings outlook fell short. AT&T dropped 5% after the telephone company reported a larger-than-expected sales decline in the first quarter. In addition, Citigroup and Morgan Stanley both downgraded the stock.
Microsoft was the biggest gainer in the Dow, rising 3.8% after the software maker said it would unveil its next-generation Xbox on May 21. Aluminum producer Alcoa rose 3.6%.
Boeing was another blue-chip gainer after the plane manufacturer reported first-quarter profit above Wall Street's estimates.
Today's economic data at Wall Street showed that durable goods orders continued their streak of sizable up-and-down movements in March. Orders fell 5.7% after increasing a downwardly revised 4.3% (from 5.6%) in February. The consensus expected orders to fall 3.1%. The wild swings in orders over the last few months have been the result of big moves in aircraft orders. In March, total aircraft orders, defense and nondefense fell 43.5% after increasing 65.0% in February. Excluding transportation, orders fell 1.4% after dropping a downwardly revised 1.7% (from -0.7%) in February. The consensus expected these orders to remain flat.
Separate report showed that the weekly MBA Mortgage Index rose 0.2% to follow last week's increase of 4.8%.
Crude-oil prices ended substantially higher on Wednesday, 24 April 2013 at Nymex. Prices ended higher following a lower dollar and the weekly inventory report showing lesser than expected climb up in crude stockpiles for last week. Negative disappointing data at Wall Street restricted the price rise. Light and sweet crude for May ended higher by $2.25 (2.5%) at $91.43 a barrel on the New York Mercantile Exchange on Wednesday. Prices shed 3.6% last week.
In the weekly inventory report, the EIA reported today that the U.S. Energy Information Administration reported crude supplies rose by 900,000 barrels for the week ended April 19. Market had expected a 1.4-million-barrel climb. The report also showed that motor gasoline supplies dropped by 3.9 million barrels, but distillate stockpiles added 100,000 barrels. Forecasts called for a decline of 700,000 barrels in gasoline stockpiles and a fall of 450,000 barrels in distillate supplies.
Bullion metal prices ended higher on Wednesday, 24 April 2013. Prices of gold and silver rose as traders and investors continued to step in to buy the recent big dip in prices. Demand for physical gold worldwide remains strong after last week's price plunge.
Gold for June delivery ended higher by $14.9 (1.1%) at $1,423.7 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. May silver ended higher by $0.02 cents (0.1%) at $22.83 an ounce on Wednesday.
German 30-year bund yields fell to a record low at a government auction Wednesday. The bund fetched an average yield of 2.16%. This underscores the still-keen European investor uncertainty regarding the overall financial and economic health of the European Union. The German Ifo business confidence index fell to 104.4 in April from 106.7 in March, suggesting the EU's largest economy is struggling. The continued weakness in the Japanese yen pushed the Nikkei stock index to a four-plus-year high on Wednesday.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.3% on Wednesday.
On Wednesday, 706 million shares traded on the New York Stock Exchange. Composite volume topped 3.5 billion.
Indian ADRs ended mixed on Wednesday. In the IT space, Infosys was down 0.9% and Wipro was down 0.4%. In the Banking space, HDFC Bank was up 2% and ICICI Bank was up 1%. In the Telecom space, Tata Communication was up 0.2%. In other space, Tata Motors was down 0.45%, Dr Reddys was down 0.14% and Sterlite was up 1.4%.
Tomorrow, weekly initial and continuing claims will be reported at 8:30 ET. Among earnings of note, 3M, Exxon Mobil and UPS will report their results before the opening bell. The U.S. Treasury will auction $29 billion in 7-yr notes.
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