Market Loses Gains From Earlier in the Week

Markets

For the week of Monday, April 21, 2014 through Friday, April 25, 2014:

• Standard & Poor’s 500 Index: -0.06%
• Dow Jones Industrial Average: -0.26%
• NASDAQ Composite: -0.48%

Technology stocks rebounded and led the market in extending last week’s gains. The rally came on low trading volume, as investors awaited several corporate earnings reports. The rally continued Tuesday driving the S&P 500 to a sixth straight gain. The S&P 500 has gained 3.5% since closing at a two-month low on April 11 and is just 0.6% away from its April 2 record closing high.

Midweek, stocks snapped their winning streak, as weakness in technology shares weighed on equity indexes. Stocks fluctuated between gains and losses Thursday morning to end the day relatively flat. Markets traded lower Friday amid increasing tensions in the Ukraine. Amazon.com Inc. (NASDAQ: AMZN) led the decline on the NASDAQ in the wake of quarterly figures released after the closing bell on Thursday.

Economic Data

Chain Store Sales Snapshot:

• The ICSC chain store sales index rose 0.4% for the week.  
• Year-over-year, the index increased 1.9%.  

Existing Home Sales:

• Existing-home sales were flat in March, falling 0.2% to 4.59 million annualized units.  
• February’s pace was unchanged at 4.6 million units.
• Months of supply increased to 5.2 months.

MBA Mortgage Applications Survey:

• Mortgage applications fell 3.3% in the last week.
• The purchase index fell by 2.6%.
• The refinance index fell 3.7%.

New-Home Sales:

• New single-family home sales fell 384,000 annualized units in March.
  • The pace of sales fell 14.5%.
• February sales were revised upward.
• Year-over-year sales are down by 13.3%.

Jobless Claims:

• Initial claims for unemployment increased 24,000 to 329,000.
• The four-week moving average was 316,750.
• Continuing claims fell 61,000 for the week of April 12.

Durable Goods Orders:

• New orders for durable manufactured goods increased 2.6%.
  • Excluding transportation, new orders rose 2%.
• Total shipments increased 1.1%.
• Inventories rose 0.5%.

Earnings:

SunTrust Banks, Inc. (NYSE: STI)

• SunTrust’s earned $405 million, or $0.73 a share, compared to $352 million, or $0.63 a share last year.
  • Profits rose 15%.
  • Revenue fell 4% to $2.03 billion.
• Analysts expected $0.66 a share on $2.01 billion in revenue.

Netflix, Inc. (NASDAQ: NFLX)

• Netflix earned $53 million, or $0.86 a share, compared to $2.7 million, or $0.05, last year.
  • Earnings surpassed analysts’ expectations of $0.81 a share.
  • Revenue increased 24% from a year ago to $1.3 billion.
• Netflix announced that it will raise prices for new customers by $1-$2 before July, while its current 36 million subscribers will continue to pay their current rate for at least the next year.

McDonald’s Corp. (NYSE: MCD)

• McDonald’s earned $1.2 billion, or $1.21 a share, compared to $1.27 billion, or $1.26 a share last year.
  • Revenue rose to $6.7 billion.
• Analysts expected $1.24 a share on revenue of $6.71 billion.

Yum! Brands, Inc. (NYSE: YUM)

• Yum Brands earned $399 million, or $0.87 a share, compared to $337 million, or $0.72 a share, last year.
  • Revenue rose to $2.72 billion.
  • Analysts expected $0.84 a share on revenue of $2.81 billion.
• For the first quarter, sales rose 11% percent at KFC.
• Pizza Hut’s same store sales rose 8%.

Apple Inc. (NASDAQ: AAPL)

• Apple reported earnings of $10.2 billion on sales of $45.6 billion.
• Analysts expected $10.18 a share on revenue of $43.53 billion.
  • IPhone sales beat analyst estimates of 37.7 million units, selling 43.7 million.
• Apple announced a 7-for-1 stock split.

General Motors Company (NYSE: GM)

• General Motors issued a large recall based on a defective ignition switch causing profits to fall 88%.
• GM reported earnings of $108 million, or $0.06 a share, compared to $873 million, or $0.58 a share, a year ago.
  • Excluding charges GM earned $0.29 a share.
    • Analysts expected $0.04 a share.
  • Revenue increased 1.4% to $37.4 billion
    • Analysts expected $38.4 billion.

Interest Rates

• The two-year Treasury rate increased five basis points to 0.45%.
• The five-year Treasury rate rose two basis points to 1.76%.
• The 10-year Treasury fell one basis point to 2.71%.
• The 30-year Treasury yield fell three basis points to 3.49%.

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