Economic Events and Earnings for Friday July 25th
Published: Thu, 07/24/14
[BRIEFING.COM] The stock market maintained a narrow trading range on Thursday before ending the session essentially where it began. The S&P 500 added less than a point, while the small-cap Russell 2000 (-0.2%) underperformed.
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Equity indices displayed early strength thanks in part to an overnight boost from better than expected economic data in China and Europe. Specifically, China's HSBC Manufacturing PMI surged to an 18-month high (52.0 from 50.7), while Eurozone Manufacturing PMI (51.9; expected 51.7) and Services PMI (54.4; expected 52.7) also surpassed estimates.
In addition to upbeat data from overseas, participants received a batch of better than expected earnings, but the market had a difficult time building on its early gain. The S&P 500 surrendered its opening advance during the initial minutes, but was able to follow that with a rally to a fresh record high (1991.39). The index could not hold that level into the afternoon and slipped back to its flat line by the close.
None of the sectors were able to distinguish themselves with several groups spending time atop the leaderboard. When it was all said and done, consumer staples (+0.4%), utilities (+0.4%) and consumer discretionary (+0.3%) occupied the top three spots.
The staples sector drew strength from beverage stocks with Dr Pepper Snapple (DPS 60.98, +2.54) surging 4.4% in reaction to its bottom-line beat. Peer PepsiCo (PEP 91.91, +1.09) advanced 1.2% after being upgraded to 'Buy' from 'Hold' at Stifel Nicolaus.
For its part, the utilities sector erased its week-to-date loss, but could only narrow its July decline to 3.4%. Despite the recent weakness, the rate-sensitive group holds a year-to-date gain of 12.5% versus a 7.6% increase for the S&P 500.
Elsewhere, the discretionary space was supported by retailers. Under Armour (UA 69.55, +8.92) spiked 14.7% to a new record high after delivering an above-consensus quarterly report, while the SPDR S&P Retail ETF (XRT 85.33, +0.55) rallied 0.7%. The strength among retailers outweighed the broad losses among homebuilders.
The industry group was pressured by a disappointing report from a major builder-DR Horton (DHI 21.94, -2.86)-and the June New Home Sales report, which fell short of expectations (406K; Briefing.com consensus 475K). TheiShares Dow Jones US Home Construction ETF (ITB 23.38, -0.83) lost 3.4%.
Other high-beta groups like biotechnology and chipmakers did not fare much better. The iShares Nasdaq Biotechnology ETF (IBB 255.45, -3.89) tumbled 1.5%, while the health care sector (-0.2%) lagged throughout the session.
For its part, the PHLX Semiconductor Index lost 0.8% with Qualcomm (QCOM 76.17, -5.43) registering the largest drop. The stock fell 6.7% after its below-consensus Q4 earnings guidance overshadowed better than expected results.
Meanwhile, another tech stock-Facebook (FB 74.98, +3.69)-soared 5.2% after beating earnings and revenue expectations.
Treasuries retreated, making the bulk of their move ahead of the New York open. The 10-yr note lost 11 ticks, sending its yield higher by four basis points to 2.51%.
Participation was below average with a bit over 615 million shares changing hands at the NYSE.
Economic data was limited to initial claims and the New Home Sales report for June:
- The initial claims level fell to 284,000 from an upwardly revised 303,000 (from 302,000), while the Briefing.com consensus expected an increase to 308,000
- The drop in claims brought the overall level to its lowest point since February 2006 and pressured the four-week moving average to its lowest level since May 2006
- The Department of Labor said there were no special factors associated with the report, but did note that claims tend to be volatile around this time of the year
- New home sales fell 8.1% in June to 406,000 from a downwardly revised 442,000 (from 504,000) in May, while the Briefing.com consensus expected a reading of 475,000
- Sales were also revised lower for April (408,000 from 425,000) and March (403,000 from 410,000)
- Median new home prices increased 5.3% y/y in June to $273,500
- S&P 500 +7.6% YTD
- Nasdaq Composite +7.1% YTD
- Dow Jones Industrial Average +3.1% YTD
- Russell 2000 -0.6% YTD
- The initial claims level fell to 284,000 from an upwardly revised 303,000 (from 302,000), while the Briefing.com consensus expected an increase to 308,000
- 15:35 ET DOW -9.04 AT 17077.59, NASDAQ -2.27 AT 4471.43, S&P +0.45 AT 1987.46
[BRIEFING.COM]
- Aug gold fell below $1300 per ounce following economic data that showed the initial claims level fell to 284K from an upwardly revised 330K (from 302K), its lowest level since Feb 2006. The Briefing.com consensus called for an increase to 308K.
- The yellow metal traded as low as $1287.50 per ounce after pulling back from a session high of $1300.80 per ounce set in morning action and eventually settled with a 1.1% loss at $1290.20 per ounce.
- Sep silver trended lower after retreating from a session high of $20.96 per ounce set in morning pit trade. It eventually settled at its session low of $20.41 per ounce, booking a loss of 2.8%.
- Sep crude oil pulled back from a session high of $103.17 per barrel set at floor trade open as the dollar index erased overnight losses. The energy component trended lower for the remainder of the session and settled at $102.06 per barrel, or 1.0% lower.
- Aug natural gas, on the other hand, traded in positive territory as it gained strength on bullish inventory data. Prices rallied to a session high of $8.89 per MMBtu after the EIA reported that for the week ending July 18, natural gas inventories showed a build of 90 bcf vs expectations for a build of 95-96 bcf.
- Natural gas then chopped around near the $3.84 per MMBtu level and settled with a 2.4% gain at $3.87 per MMbtu.
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Economic Events
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08:30 USD Core Durable Goods Orders (MoM) 0.6% 0.0% 08:30 USD Durable Goods Orders (MoM) 0.5% -0.9% 08:30 USD Goods Orders Non Defense Ex Air (MoM)
0.5% 0.7%
10:30 USD ECRI Weekly Annualized (WoW) 4.2%
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Earnings for Friday July,25th