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Stocks market closes higher despite high-profile earnings warnings
23-Oct-19 16:20 ET
Dow +45.85 at 26833.95, Nasdaq +15.50 at 8119.80, S&P +8.53 at 3004.52

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 increased 0.3% on Wednesday in a resilient session. Today featured disappointing quarterly results and guidance from Caterpillar (CAT 135.34, +1.65, +1.2%) and Texas Instruments (TXN 118.95, -9.62, -7.5%), but the broader market was able to withstand the news to close at session highs.

The Dow Jones Industrial Average increased 0.2%, the Nasdaq Composite increased 0.2%, and the Russell 2000 increased 0.1%.

Both Caterpillar and Texas Instruments missed top and bottom-line estimates and issued downside guidance, but CAT managed to rally into positive territory. Caterpillar commented that trade tensions and macro concerns led to reductions in dealer inventories, while Texas Instruments said its outlook was predominately a macro issue.

It should be noted that guidance was reserved for this year and not for 2020, which presumably kept general growth concerns in check and allowed for gains in the cyclical S&P 500 energy (+0.8%) and materials (+0.7%) sectors. A nice increase in oil prices ($55.83/bbl, +1.45, +2.7%) was a supportive factor for energy stocks.

The information technology sector (+0.1%) sidestepped the weakness in the semiconductor space thanks to another noticeable gain in Apple (AAPL 243.18, +3.22, +1.3%) after Morgan Stanley raised its price target to $289 from $247. The Philadelphia Semiconductor Index fell 1.9%. The consumer discretionary sector (-0.4%) was today's lagging S&P 500 sector.

In other corporate news, Boeing (BA 340.50, +3.50, +1.0%) missed earnings estimates, but investors were placated by a better-than-feared outlook for its 737 MAX, which is still expected to return to service in Q4. Facebook (FB 186.19, +3.85, +2.1%) CEO Mark Zuckerberg testified before Congress on Libra and, based on the stock's price action, investors were mostly satisfied with his testimony.

Separately, Nike (NKE 92.32, -3.23, -3.4%) announced Mark Parker will step down as CEO on Jan. 13, 2020 and will be replaced by John Donahoe, who is the President and CEO of ServiceNow (NOW 220.01, -8.33, -3.7%).

U.S. Treasuries saw an uptick in demand, which pushed yields lower. The 2-yr yield declined three basis points to 1.58%, and the 10-yr yield declined one basis point to 1.76%. The U.S. Dollar Index declined 0.1% to 97.46.

Reviewing Wednesday's economic data, which shed some insight into the housing market:

The MBA Mortgage Applications Index for the week ending October 19 was down 11.9%, as higher mortgage rates pressured interest in refinancing and purchase applications.
The FHFA Housing Price Index for August increased 0.2% following an unrevised 0.4% increase in July.

Looking ahead, investors will receive New Home Sales for September, Durable Goods Orders for September, and the weekly Initial and Continuing Claims report on Thursday.

Nasdaq Composite +22.4% YTD
S&P 500 +19.9% YTD
Russell 2000 +15.2% YTD
Dow Jones Industrial Average +15.0% YTD

Market Snapshot
Dow 26833.95 +45.85 (0.17%)
Nasdaq 8119.80 +15.50 (0.19%)
SP 500 3004.52 +8.53 (0.28%)
10-yr Note 0/32 1.764
NYSE Adv 1848 Dec 1042 Vol 772.9 mln
Nasdaq Adv 1658 Dec 1385 Vol 1.8 bln

Industry Watch
Strong: Energy, Materials, Communication Services
Weak: Consumer Discretionary, Industrials

Moving the Market

-- Stock market closes higher despite disappointing earnings results, guidance from Caterpillar (CAT) and Texas Instruments (TXN)

-- Apple (AAPL) continued to rise, this time after Morgan Stanley increased its price target to $289 from $247

-- Boeing (BA) provided a better-than-feared outlook for its 737 MAX, offsets earnings miss