Markets
For the week of Monday, April 22, 2013, through Friday, April 26, 2013:
- Standard & Poor’s 500 Index: 1.76%
- Dow Jones Industrial Average: 1.17%
- NASDAQ Composite: 2.29%
The markets began the week on a strong note, with stocks regaining some of last week’s losses. Energy, materials and technology sectors led the gains. The rally continued Tuesday, despite a false report on the social network Twitter, about a White House explosion. The Associated Press’ account was hacked, and the fake tweet pushed the market down 1% in seconds. Investors embraced earnings for the rest of the day. Of the more than 270 S&P 500 companies that have reported quarterly results, 70% have beaten earnings estimates.
By Wednesday, the gains ceased when a pair of blue-chip earnings reports failed to impress investors. Durable-goods orders came in below expectations, adding to the day’s pull back. Stocks were mostly higher Thursday thanks to a drop in weekly jobless claims. Stocks closed mixed on Friday, probably as a result of the weaker-than-expected GDP number. Investors may also be waiting to see whether the Fed keeps interest rates low or alters its quantitative easing program during its meeting next week.
Economic Data
- Existing Home Sales:
- Existing home sales slipped in March to 4.92 million annualized units.
- The 0.6% slip from February was against expectations.
- February’s reading was revised down 1% as well.
- Overall existing-home sales are trending upward.
- Inventories increased 1.6% month-over-month, but are still 17% below last year with a 4.7-month supply.
- The median existing-home price is up 11.8% year-over-year.
- Existing home sales slipped in March to 4.92 million annualized units.
- Chain Store Sales Snapshot:
- The Chain Store Sales Index increased 0.8% in the latest week, with year-over-year growth inching down 0.1% to 1.9%.
- Weather still continues to adversely affect sales.
- Falling gas prices provide some relief.
- The Chain Store Sales Index increased 0.8% in the latest week, with year-over-year growth inching down 0.1% to 1.9%.
- New Home Sales:
- New-home sales increased 1.5% in March to 417,000 annualized units.
- Inventories moved up, but remain low with 4.4 months of supply.
- The median new-house price is up 3% year-over-year, and market signs indicate new homes sales are trending up.
- New-home sales increased 1.5% in March to 417,000 annualized units.
- MBA Mortgage Applications Survey:
- The mortgage applications composite index rose by 0.2% for the week.
- Purchase and refinance activity increased 0.3%.
- The 30-year fixed interest dropped to its lowest level in three months
- Durable Goods:
- Offsetting February’s 4.3% increase, new orders for durable goods declined 5.7% in March.
- Excluding transportation, new orders fell 1.4%.
- Total shipments were up 0.4%
- Inventories grew 0.1%.
- Core capital orders rose 0.2%
- Shipments rose 0.3%
- Offsetting February’s 4.3% increase, new orders for durable goods declined 5.7% in March.
- Jobless Claims:
- Initial claims fell 16,000 to 339,000.
- Continuing claims fell 93,000.
- The insured unemployment rate slipped from 2.4% to 2.3%.
- Initial claims fell 16,000 to 339,000.
Earnings
- Caterpillar Inc. (NYSE: CAT)
- Caterpillar reported net income of $882 million, or $1.31 per share.
- Revenue was down 17% to $13.21 billion from $15.98 billion a year ago, missing analysts’ expectations.
- Analysts expected profit of $1.36 per share on revenue of $13.79 billion.
- Caterpillar announced plans to buy back about $1 billion in shares.
- Apple Inc. (NASDAQ: AAPL)
- Apple reported earnings of $10.09 a share, compared to $12.30 a share one year ago.
- The tech giant reported revenue of $43.60 billion, compared to $39.19 billion last year.
- This marks the first time Apple’s profit has declined in a decade.
- Analysts expected earnings $10.00 per share and revenue of $42.33 billion.
- Gross margin shrank from 47.4% last year to 37.5%.
- Apple increased its dividend 15% to $3.05 a share and plans to expand its share repurchase program to $60 billion from the original $10 billion level.
- Coach Inc. (NYSE: COH)
- Coach Inc. beat Wall Street estimates and announced a $0.15 increase to its annual dividend.
- Coach reported earnings of $238.9 million, or $0.84 per share, compared to $225 million, or $0.77 per share, year-over-year.
- Revenue rose 7% to $1.19 billion.
- Analysts expected profit of $0.80 per share on sales of $1.18 billion.
- International sales rose 6% to $382 million, or 14%, when stripping out the impact of foreign currency exchange rates.
- In China, where the company now has 118 locations, sales rose 40%.
- Sales at Chinese stores open at least a year rose at a “double-digit rate,” the company said.
- Robert Half International (NYSE: RHI)
- Robert Half reported net income of $55.9 million, or $0.40 per share. This is a 16% increase over the $48.3 million, or $0.34 per share last year.
- Revenue remained flat at $1.02 billion.
- Analysts expected earnings of $0.41 per share on $1.04 billion in revenue.
- The Boeing Co. (NYSE: BA)
- Boeing reported increased earnings and maintained its plans to deliver more than 60 of its 787 Dreamliners in 2013.
- Regulators have approved proposed fixes to the jet’s battery.
- Boeing reported profits of $1.11 billion, or $1.44 a share, compared to $923 million, or $1.22 a share, last year.
- The latest period included a tax benefit of $0.19 a share.
- Revenue fell 2.5% to $18.89 billion.
- Qualcomm Inc. (NASDAQ:QCOM)
- Qualcomm earned $1.87 billion, or $1.06 per share, compared to $2.23 billion, or $1.28 per share, a year ago.
- Year over year, Qualcomm’s revenue rose 24% to $6.12 billion.
- Thermo Fisher Scientific Inc. (NYSE: TMO)
- Thermo Fisher reported earnings of $1.37 per share, beating analysts’ forecast.
- The higher-than-expected first-quarter profit was helped by a 10% rise in specialty diagnostics sales.
- Celgene Corp. (NASDAQ: CELG)
- For the quarter, Celgene reported net income of $384.9 million, or $0.89 per share, compared to $401.5 million, or $0.90 per share, a year earlier.
- Revenue was up 15% to $1.46 billion.
- This was below analysts’ estimate of $1.47 billion.
- Exxon Mobil Corp. (NYSE: XOM)
- Exxon reported a profit of $9.5 billion, or $2.12 a share, an increase from $9.45 billion, or $2 a share, in the same period last year.
- Revenue fell to $108.81 billion.
- Analysts expected earnings of $2.05 a share on revenue of $119.83 billion.
- Exploration and production earnings declined 9.8% to $7.04 billion.
- Production fell 3.5% on an oil-equivalent basis.
- Refining and marketing earnings fell 2.6% to $1.55 billion, while refining-driven margins increased earnings by $780 million.
- Occidental Petroleum Corp. (NYSE: OXY)
- Occidental reported net income of $1.36 billion, or $1.68 a share, compared to $1.56 billion, or $1.92, a year earlier.
- Per-share profit, excluding one-time items, was $0.15 above analysts’ estimates.
- Revenue fell year-over-year to $5.87 billion—a 6.3% drop.
- Analysts were expecting $6.47 billion.
- United Parcel Service Inc. (NYSE: UPS)
- United Parcel Service reported profit of $1.04 billion, a 7% increase.
- The adjusted profit was $1.04 per share, better than the $1 per share predicted by analysts.
- Company revenue rose 2% to $13.43 billion
- UPS announced it will purchase Hungarian pharmaceuticals delivery company Cemelog Zrt.
Interest Rates
- Yields on U.S. Treasury bonds rose after jobless claims fell more than expected in the latest week.
- The two-year Treasury rate continues to hold at 0.23%.
- The five-year Treasury rate rose two basis points to 0.72%.
- The 10-year Treasury rate edged up almost four basis points to 1.72%.
- The 30-year Treasury yield was up more than five basis points to 2.91%, yet remained below the key 3% level.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
