Sat. Nov 23rd, 2024

Stocks May Benefit From More Upbeat Earnings News

US Stocks report

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Thursday following the mixed performance seen in the previous session.

Another positive reaction to the latest batch of earnings news may contribute to early buying interest on Wall Street.

After failing to sustain an early upward move stocks turned mixed over the course of the trading session on Wednesday. While the Nasdaq and the S&P 500 pulled back into negative territory, the Dow reached a new record closing high.

The major averages ended the day on opposite sides of the unchanged line. The Dow rose 41.31 points or 0.2 percent to 26,252.12, while the Nasdaq slid 45.23 points or 0.6 percent to 7,415.06 and the S&P 500 edged down 1.59 points or 0.1 percent to 2,837.54.

The early strength on Wall Street partly reflected a positive reaction to the latest batch of quarterly earnings news.

Abbott Laboratories (ABT), United Technologies (UTX), and Comcast (CMCSA) are among the companies that reported better than expected quarterly results.

Buying interest waned over the course of the morning, however, leading some traders to cash in on the recent strength in the markets.

On the U.S. economic front, the National Association of Realtors released a report showing a bigger than expected pullback in existing home sales in the month of December.

NAR said existing home sales tumbled by 3.6 percent to an annual rate of 5.57 million in December after jumping by 5.1 percent to a revised 5.78 million in November.

Economists had expected existing home sales to drop to a rate of 5.70 million from the 5.81 million originally reported for the previous month.

The bigger than expected decrease came after existing home sales jumped to highest rate in nearly eleven years in November.

“Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” said NAR chief economist Lawrence Yun.

Airline stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Airline Index down by 3 percent.

United Continental (UAL) led the airline sector lower after reporting fourth quarter results that beat estimates but also announcing an increase in capacity that could impact profit margins.

Significant weakness also emerged among semiconductor stocks, as reflected by the 2.3 percent drop by the Philadelphia Semiconductor Index. The index pulled back off the record closing high set in the previous session.

Chip maker Texas Instruments (TXN) posted a notable loss despite reporting fourth quarter results that matched analyst estimates.

Oil service and electronic storage stocks also moved to the downside on the day, while considerable strength was visible among gold, steel, and banking stocks.

By Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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