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Jan 29, 2019

Wall Street Closing Report: Dow posts slight gain as Wall Street braces for Apple earnings

Fred Imbert

The Dow Jones Industrial Average rose on Tuesday as Wall Street awaited the latest quarterly results from tech giant Apple.
The 30-stock index gained 90 points, or 0.37 percent. The S&P 500 slipped 0.1 percent while the Nasdaq Composite was down 0.6 percent.
Apple shares declined 0.1 percent ahead of the company’s report, which is scheduled for release after the close. The report comes after the iPhone maker slashed its revenue guidance for the previous quarter earlier this month, citing weaker growth in China.
“We view the overall risk/reward on AAPL as neutral,” KeyBanc Capital Markets analyst Andy Hargreaves wrote in a note last week. “While the Company’s buyback and historically strong customer loyalty provide some measure of protection, we see little to cure the unit and pricing challenges faced in the iPhone segment.”

GP: Traders NYSE active 190114
Traders work on the floor of the New York Stock Exchange, Jan. 14, 2019.
Michael Nagle | Bloomberg | Getty Images
This is the busiest week of the current earnings season. When the dust settles, more than 100 companies in the S&P 500 will have posted their quarterly results. Through Tuesday morning, more than 70 percent of the companies that have reported have beaten analyst expectations, according to FactSet data.
3M was among the companies that posted better-than-expected earnings on Tuesday, sending its stock up 1.9 percent. Allergan and Verizon posted stronger-than-forecast profits, but their shares fell. Pfizer shares gained 2.5 percent on earnings.
Lockheed Martin shares rose 1 percent after posting quarterly earnings that were roughly in line with expectations. L3 Technologies shot up more than 8 percent and was on track for its best day since Oct. 15.
Amgen rose 0.3 percent ahead of its earnings release. eBay, which is also scheduled to report after the bell slipped 0.7 percent.
Market focus was also largely attuned to global trade developments, after prospects for a long-awaited U.S.-China trade deal were dealt another setback. It comes after Washington leveled sweeping charges against Beijing’s telecom giant Huawei.
The U.S. Department of Justice filed criminal charges Monday against Meng Wanzhou, the chief financial officer of China tech giant Huawei and the daughter of its founder and president Ren Zhengfei.
The news comes shortly before Chinese Vice Premier Liu He is set to meet U.S. officials on Wednesday and Thursday. Market participants fear the jolt to Huawei could undermine the chances of the world’s two largest economies reaching a comprehensive trade deal.
White House economic advisor Larry Kudlow said Tuesday, however, that President Donald Trump is “moderately optimistic” about China and the U.S. striking a deal before a March 1 deadline. The Nikkei Asian Review later reported that Chinese officials are expected to present a roadmap to achieving structural reforms this week.
Investors also looked ahead to a monetary policy decision from the Federal Reserve. Market expectations for a rate hike being announced Wednesday afternoon are zero, according to the CME Group’s FedWatch tool.
The moves Tuesday come after the major indexes fell sharply on the back of disappointing guidance from Caterpillar and Nvidia. Both companies cited slowing growth in China for their forecasts.
“One key common thing that high-profile companies are pointing to is weakness in overseas markets,” said Michael Geraghty, equity strategist at Cornerstone Capital Group. “It’s very important to keep remembering that about half of the earnings in the S&P 500 come from overseas.”
“Economic data from overseas continues to be very weak,” Geraghty said. “I don’t think some investors fully appreciate how weak the economies are overseas and what a toll this is taking on the earnings of U.S. corporations.”
—CNBC’s Sam Meredith and Silvia Amaro contributed to this article.

Source: CNBC

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