The S&P 500 and Nasdaq managed to eke out gains on the back of promising earnings from some retail companies. However, the Dow Jones extended its fifth day of losses, despite positive earnings from Home Depot. Meanwhile, the global steel output increased in July. Of all the top ten S&P 500 industry groups which finished in the green, consumer discretionary stocks gained the most.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJI) lost 0.1% to close the day at 15,002.99. The S&P 500 gained 0.4% to finish yesterday’s trading session at 1,652.35. The tech-laden Nasdaq Composite Index added 0.7% to end at 3,613.59. The fear-gauge CBOE Volatility Index (VIX) slipped 1.3% to settle at 14.91. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.24 billion shares, well below 2013’s average of 6.32 billion shares. Advancing stocks outnumbered the decliners. For 79% shares that advanced, only 27% declined.
Consumer discretionary stocks and retail stocks retreated from their lows after a couple of retail companies posted better than expected earnings. Shares of Best Buy Co., Inc. (NYSE:BBY) gained 13.2% after the company disclosed a massive profit of $266 million or 77 cents, compared to just $12 million or 4 cents a year ago. Year over year sales declined 0.4% to $9.3 billion, but beat the Street’s estimates of $9.13 billion. The company said that stringent cost saving measures were responsible for such high profits.
Shares of another apparel retail company, Urban Outfitters, Inc. (NASDAQ:URBN) gained 8.2% after the company’s profit increased 25%. Net sales of the company increased 12% year over year to $758.5 million. Profits of the company came in at $76.4 million or 51 cents per share compared to previous year’s $61.3 million or 42 cents a share. These encouraging results came in amidst poor results from Wal-Mart and Macy’s.
The Dow extended its losses on the fifth consecutive day despite home improvement company, The Home Depot, Inc. (NYSE:HD) posted better than expected results. Earnings of the company came in at $1.8 billion or $1.24 per share, compared to previous year’s profit of $1.53 billion or $1.01 per share. Revenues of the company increased 9.5% to $22.5 billion, above the Street’s estimates of $21.8 billion. Home Depot expects earnings per share for the year to come in at $3.60 a share compared to the previous estimate of $3.52 per share.
According to the World Steel Association, global steel production has increased 2.7% to 132 million tons. All developed and emerging countries have posted an increase in steel production. China, U.S., Japan, South Korea and India have witnessed an increase in output by 6.2%, 3.3%, 0.5%, 5.8% and 4.3%, respectively. Europe is still suffering from a relatively weak economy. The steel sector, which forms a major part of the region’s economy, shrank by 6%. Low production was mainly witnessed in Germany and Italy. Production in these countries declined 5.4% and 8.5%, respectively.
Consumer discretionary stocks gained the most among the top ten S&P 500 industry groups. The Consumer Discretionary SPDR (XLY) gained 1.0%. Stocks such as the Walt Disney Company (NYSE:DIS), CBS Corporation (NYSE:CBS), Electronic Arts Inc. (NASDAQ:EA), Amazon.com, Inc. (NASDAQ:AMZN) and Johnson Controls Inc (NYSE:JCI) increased 0.1%, 0.9%, 0.7%, 0.5% and 0.9%, respectively.
Financials stocks also minted gains during yesterday’s trading session. The Financials (SPDR) gained 1.0%. Stocks such as JPMorgan Chase & Co (NYSE:JPM), Wells Fargo & Co (NYSE:WFC), PNC Financial Services Group Inc (NYSE:PNC), U.S. Bancorp (NYSE:USB) and Citigroup Inc (NYSE:C) gained 0.6%, 0.2%, 0.9%, 0.6% and 1.2%, respectively.