Wall Street closes mixed, Nasdaq rises on earnings results
24-Oct-19 16:20 ET
Dow -28.42 at 26805.53, Nasdaq +66.00 at 8185.80, S&P +5.77 at 3010.29
[BRIEFING.COM] The major U.S. indices closed mixed on Thursday, with the tech-sensitive Nasdaq Composite (+0.8%) rising above its peers in an earnings-driven advance. The S&P 500 (+0.2%), Dow Jones Industrial Average (-0.1%), and Russell 2000 (-0.2%) finished near their unchanged marks.
The Nasdaq benefited from upbeat results from a host of companies, including Microsoft (MSFT 139.94, +2.70, +2.0%), PayPal (PYPL 104.91, +8.27, +8.6%), Tesla (TSLA 299.68, +45.00, +17.7%), and Lam Research (LRCX 265.60, +32.42, +13.9%). The Philadelphia Semiconductor Index (+2.5%) rose on the back of Lam Research's results and guidance.
It was no surprise, then, to see the S&P 500 information technology sector (+1.5%) as today's outright leader ahead of the utilities (+0.4%) and materials (+0.4%) sectors. In terms of surprises, Tesla's unexpected quarterly profit was one of them, but Twitter (TWTR 30.75, -8.08, -20.8%), as an S&P 500 component, woefully disappointed investors with its results and guidance.
Twitter's 21% plunge was a stain on the S&P 500 communication services sector (-0.7%), which declined more than the health care (-0.6%) and energy (-0.4%) sectors.
3M (MMM 161.89, -6.87, -4.1%) and Ford Motor (F 8.60, -0.61, -6.6%) provided mixed results and attributed a cautious outlook to headwinds in China, while strong business in China helped Dow Inc. (DOW 49.47, +2.24, +4.7%) post better-than-expected results.
Vice President Mike Pence for his part delivered a relatively hawkish speech on China, saying Beijing should not underestimate the resolve of President Trump. On a related note, Bloomberg News reported that China is willing to purchase at least $20 billion of agricultural products from the U.S. in the first year after a partial trade deal is signed.
Elsewhere, UK Prime Minister Boris Johnson will reportedly give more time to lawmakers to consider a Brexit deal, but only if they agree to a general election on Dec. 12. The European Central Bank kept rates unchanged, as expected, and confirmed it will resume asset purchases at a monthly pace of 20 billion euros as of Nov. 1.
U.S. Treasuries finished the session little changed. The 2-yr yield and the 10-yr yield were unchanged at 1.58% and 1.76%, respectively. The U.S. Dollar Index increased 0.2% to 97.68. WTI crude increased 0.7%, or $0.40, to $56.23/bbl.
Reviewing Thursdays' economic data, which included New Home Sales for September, Durable Goods Orders for September, and the weekly Initial and Continuing Claims report:
New home sales slipped 0.7% m/m to a seasonally adjusted annual rate of 701,000 units (Briefing.com consensus 703,000) from a downwardly revised 706,000 (from 713,000) in August. On a year-over-year basis, new home sales were up 15.5%.
The key takeaway from the report is the weaker activity seen in sales of higher-priced homes, as that speaks to the affordability pressures presented by mortgage rates that went up in September. Remember, new home sales are recorded when a contract is signed not when the sale closes (as is the case for existing home sales).
Durable goods orders for September declined 1.1% (Briefing.com consensus -1.0%) on the heels of an upwardly revised 0.3% increase (from 0.2%) in August. Excluding transportation, durable goods orders were down 0.3%, as expected.
The key takeaway from the report is the indication that business spending remained weak, as evidenced by the 0.5% decline in nondefense capital goods orders excluding aircraft, which followed a 0.6% decline in August.
Initial claims for the week ending October 19 decreased by 6,000 to 212,000 (Briefing.com consensus 217,000). Continuing claims for the week ending October 12 decreased by 1,000 to 1.682 million.
The key takeaway from the report is that there are no alarming trends in this series for the consumer outlook, as jobless claims continue to track close to historic lows.
Looking ahead, investors will the revised October reading for the University of Michigan's Index of Consumer Sentiment on Friday.
Nasdaq Composite +23.4% YTD
S&P 500 +20.1% YTD
Russell 2000 +15.0% YTD
Dow Jones Industrial Average +14.9% YTD
Market Snapshot
Dow 26805.53 -28.42 (-0.11%)
Nasdaq 8185.80 +66.00 (0.81%)
SP 500 3010.29 +5.77 (0.19%)
10-yr Note +1/32 1.764
NYSE Adv 1317 Dec 1537 Vol 805.7 mln
Nasdaq Adv 1394 Dec 1647 Vol 1.8 bln
Industry Watch
Strong: Information Technology, Utilities
Weak: Communication Services, Health Care, Energy
Moving the Market
-- U.S. indices closed mixed, with the Nasdaq closing firmly higher in earnings-driven advance
-- Microsoft (MSFT), Tesla (TSLA) among notable gainers; 3M (MMM), Twitter (TWTR) among notable laggards
-- Relatively hawkish China speech from Vice President Mike Pence
