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The Dow snapped a five-session long losing streak this week, boosted by strong quarterly results. During the early half of the week, surging bond yields caused heavy losses for stocks. But strong results from key components helped the index recover toward the end of the week. The 10-year Treasury yield also retreated from the psychological 3% level, calming investors’ fears.
Last Week’s Performance
The Dow declined 0.8% last Friday after Apple (AAPL - Free Report) took a hit owing to concerns of weak demand for iPhones. Also, the broader consumer staples sector took a beating, led by PepsiCo, Inc. (PEP - Free Report) and The Procter & Gamble Company (PG - Free Report) . Moreover, a rise in bond yields, reflecting fears of rising inflation, kept investors worried. The 10-year Treasury note touched a four-year high leading to huge selloffs.
However, the index gained 0.4% over last week. U.S. equity markets surged on the first two day of the week driven by robust first-quarter 2018 earnings results, strong economic data and easing geopolitical tensions. The middle of the week was a mixed bag for the markets with the Dow declining marginally.
However, the last two days of the week saw all major indexes ending in the red. This was primarily because of concerns over rising inflation, which saw the 10-year Treasury yield touching a four-year high.
The DowThisWeek
The index declined less than 0.1% on Monday, making it the fourth straight day of losses since March. The Dow’s decline was led by Goldman Sachs (GS - Free Report) , which declined 2.1%. Tech stocks continued to suffer and rising bond yields dented investors’ confidence. However, optimism about earnings prevented markets from declining further.
The index fell 1.7% on Tuesday, making it the fifth straight day of losses for the index since March 2017. The 30-stock index rose as much as 131 points shortly after trading began only to witness huge selloffs in the later part of the day. However, the Dow eventually took a beating after industry bellwether Caterpillar Inc. (CAT - Free Report) said economic growth might decelerate later in the year.
The Dow bounced back on Wednesday, gaining 0.3% to end its five-day losing streak. The 30-stock index witnessed a lot of volatility throughout the day, declining as much as 201.05 points at one point. However, it erased initial losses to end higher after shares of The Boeing Company (BA - Free Report) rallied on robust quarterly results.
The index added 1% on Thursday following robust corporate earnings from a number of big companies, including Facebook, Inc. FB. The Dow gained 238.51 points, helped primarily by Visa Inc. (V - Free Report) which posted better-than-expected profits and raised its earnings forecast. Moreover, the 10-year Treasury yield traded below the 3% level, as investors shed worries that had fueled huge selloffs over growing U.S. debts and rising costs.
Components Moving the Index
3M Company (MMM - Free Report) reported first-quarter 2018 GAAP earnings of 98 cents per share compared with $2.16 per share in the year-earlier quarter. Excluding non-recurring items, adjusted earnings for the quarter were $2.50, which came in line with the Zacks Consensus Estimate. Notably, the reported figure increased 15.7% on a year-over-year basis.
Net sales came in at $8,278 million, up from $7,685 million in the year-ago quarter and exceeded the Zacks Consensus Estimate of $8,079 million. Zacks Rank #4 (Sell) 3M revised its earlier guidance for 2018. The company currently anticipates earnings in the range of $10.20-$10.55 per share compared with prior projections of $10.20-$10.70. (Read: 3M Q1 Earnings In Line, Sales Beat Estimates, Up Y/Y)
Boeing reported adjusted earnings of $3.64 per share for first-quarter 2018, beating the Zacks Consensus Estimate of $2.59 by 40.5%. The quarterly bottom line reflected an improvement of 68% from $2.17 in the year-ago quarter.
The company's first-quarter revenues amounted to $23.38 billion in the quarter, beating the Zacks Consensus Estimate of $22.32 billion by 4.8%. The top line also improved 6% year over year.
Zacks Rank #2 (Buy) Boeing raised its 2018 earnings guidance. The company currently expects adjusted or core earnings per share in the range of $14.30-$4.50, up from prior guidance range of $13.80-$14.00. The company continues to expect 2018 revenues in the range of $96-$98 billion. (Read: Boeing Beats on Earnings in Q1, Hikes '18 EPS View)
Caterpillar delivered adjusted earnings per share of $2.82 in first-quarter 2018, surging a whopping 120% year over year. Earnings also surpassed the Zacks Consensus Estimate of $2.11 by a margin of 34%. Revenues improved 32% year over year to $12.9 billion in the quarter, surpassing the Zacks Consensus Estimate of $11.6 billion.
Caterpillar now expects adjusted earnings per share between $10.25 and $11.25 for fiscal 2018. The company had earlier provided adjusted earnings per share guidance of $8.25-$9.25 for the fiscal. The stock has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Coca-Cola Company (KO - Free Report) kicked off 2018 on a strong note, beating the Zacks Consensus Estimate on both counts in the first quarter. First-quarter 2018 comparable earnings of the company were 47 cents per share, surpassing the Zacks Consensus Estimate of 46 cents.
Revenues of $7.63 billion in the quarter surpassed the Zacks Consensus Estimate of $7.43 billion. However, net revenues declined 16% year over year due to the negative impact of structural items.
In 2018, Zacks Rank #3 (Hold) Coca-Cola expects organic revenues to increase 4%. The company expects adjusted EPS to grow 8-10% from the prior -year’s comparable EPS of $1.91. (Read: Coca-Cola Stock Gains on Q1 Earnings & Revenue Beat)
Verizon Communications Inc. (VZ - Free Report) started 2018 on a positive note with a relatively healthy performance in the first quarter, primarily led by the wireless business. Excluding non-recurring items, adjusted earnings were $1.17 per share compared with 95 cents in the year-earlier quarter and comfortably exceeded the Zacks Consensus Estimate of $1.11.
Excluding revenues from divested businesses, non-GAAP consolidated revenues were $29.9 billion, which missed the Zacks Consensus Estimate of $31,157 million.
For full year 2018, Zacks Rank #3 Verizon expects both GAAP revenues and adjusted earnings per share to increase by low single-digit percentage rates driven by expected savings from tax reform and higher cash flow from operations. (Read: Verizon Beats Q1 Earnings on Solid Wireless Business)
United Technologies Corporation reported first-quarter 2018 adjusted earnings of $1.77 per share, which trumped the Zacks Consensus Estimate of $1.51 and rose 19.6% year over year. United Technologies has a Zacks Rank #3.
Net sales in the reported quarter came in at $15,242 million, up 10.3% from the year-ago quarter’s figure. Quarterly sales exceeded the Zacks Consensus Estimate of $14,537 million.
Backed by these positives, the company raised its full-year 2018 earnings and sales guidance. The company now expects adjusted earnings between $6.95 and $7.15, up from the previous range of $6.85-$7.10. Additionally, the company raised revenue guidance for 2018 from earlier range of $62.5-$64 billion to a band of $63-$64.5 billion. (Read: United Technologies Lifts '18 View on Solid Q1 Earnings)
The Travelers Companies, Inc.’s (TRV - Free Report) first-quarter 2018 core income of $2.46 per share missed the Zacks Consensus Estimate of $2.68 by 8.2%. However, the bottom line improved 13.9% year over year. Travelers has a Zacks Rank #3.
Total revenues of Travelers rose nearly 5% from the year-ago quarter to $7.3 billion. Also, the top line beat the Zacks Consensus Estimate of $7.2 billion. (Read: Travelers Q1 Earnings Miss Estimates, Revenues Beat)
Visa reported second-quarter fiscal 2018 (ended Mar 31, 2018) earnings of $1.11 per share, beating the Zacks Consensus Estimate by 9.9%. Also, the bottom line improved 30% year over year. Visa has a Zacks Rank #3.
Net operating revenues of $5.07 billion surpassed the Zacks Consensus Estimate of $4.77 billion. Also, revenues climbed 13% year over year. Driven by strong results and a favorable outlook for the remainder of the year, Visa raised its 2018 guidance provided earlier. (Read: Visa Beats Q2 Earnings Estimates, Raises 2018 Guidance)
Performance of the Top 10 Dow Companies
The table given below shows the price movements of the 10 largest components of the Dow, which is a price weighted index, over the last five days and during the last six months. Over the last five trading days, the Dow has declined 0.8%.
Next Week’s Outlook
Markets staged a solid recovery this week from their recent phase of losses. Bullish earnings results were principally responsible for such a turn of events. A decline in the 10-year Treasury yield from the 3% mark also helped lessen investor concerns.
As we head into the next week, investors will also focus on crucial economic releases such as GDP data. Good news from this front will certainly help the Dow notch up more gains in the week ahead.
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Dow 30 Stock Roundup: BA, CAT, KO, UTX, Visa Earnings Impress
The Dow snapped a five-session long losing streak this week, boosted by strong quarterly results. During the early half of the week, surging bond yields caused heavy losses for stocks. But strong results from key components helped the index recover toward the end of the week. The 10-year Treasury yield also retreated from the psychological 3% level, calming investors’ fears.
Last Week’s Performance
The Dow declined 0.8% last Friday after Apple (AAPL - Free Report) took a hit owing to concerns of weak demand for iPhones. Also, the broader consumer staples sector took a beating, led by PepsiCo, Inc. (PEP - Free Report) and The Procter & Gamble Company (PG - Free Report) . Moreover, a rise in bond yields, reflecting fears of rising inflation, kept investors worried. The 10-year Treasury note touched a four-year high leading to huge selloffs.
However, the index gained 0.4% over last week. U.S. equity markets surged on the first two day of the week driven by robust first-quarter 2018 earnings results, strong economic data and easing geopolitical tensions. The middle of the week was a mixed bag for the markets with the Dow declining marginally.
However, the last two days of the week saw all major indexes ending in the red. This was primarily because of concerns over rising inflation, which saw the 10-year Treasury yield touching a four-year high.
The Dow This Week
The index declined less than 0.1% on Monday, making it the fourth straight day of losses since March. The Dow’s decline was led by Goldman Sachs (GS - Free Report) , which declined 2.1%. Tech stocks continued to suffer and rising bond yields dented investors’ confidence. However, optimism about earnings prevented markets from declining further.
The index fell 1.7% on Tuesday, making it the fifth straight day of losses for the index since March 2017. The 30-stock index rose as much as 131 points shortly after trading began only to witness huge selloffs in the later part of the day. However, the Dow eventually took a beating after industry bellwether Caterpillar Inc. (CAT - Free Report) said economic growth might decelerate later in the year.
The Dow bounced back on Wednesday, gaining 0.3% to end its five-day losing streak. The 30-stock index witnessed a lot of volatility throughout the day, declining as much as 201.05 points at one point. However, it erased initial losses to end higher after shares of The Boeing Company (BA - Free Report) rallied on robust quarterly results.
The index added 1% on Thursday following robust corporate earnings from a number of big companies, including Facebook, Inc. FB. The Dow gained 238.51 points, helped primarily by Visa Inc. (V - Free Report) which posted better-than-expected profits and raised its earnings forecast. Moreover, the 10-year Treasury yield traded below the 3% level, as investors shed worries that had fueled huge selloffs over growing U.S. debts and rising costs.
Components Moving the Index
3M Company (MMM - Free Report) reported first-quarter 2018 GAAP earnings of 98 cents per share compared with $2.16 per share in the year-earlier quarter. Excluding non-recurring items, adjusted earnings for the quarter were $2.50, which came in line with the Zacks Consensus Estimate. Notably, the reported figure increased 15.7% on a year-over-year basis.
Net sales came in at $8,278 million, up from $7,685 million in the year-ago quarter and exceeded the Zacks Consensus Estimate of $8,079 million. Zacks Rank #4 (Sell) 3M revised its earlier guidance for 2018. The company currently anticipates earnings in the range of $10.20-$10.55 per share compared with prior projections of $10.20-$10.70. (Read: 3M Q1 Earnings In Line, Sales Beat Estimates, Up Y/Y)
Boeing reported adjusted earnings of $3.64 per share for first-quarter 2018, beating the Zacks Consensus Estimate of $2.59 by 40.5%. The quarterly bottom line reflected an improvement of 68% from $2.17 in the year-ago quarter.
The company's first-quarter revenues amounted to $23.38 billion in the quarter, beating the Zacks Consensus Estimate of $22.32 billion by 4.8%. The top line also improved 6% year over year.
Zacks Rank #2 (Buy) Boeing raised its 2018 earnings guidance. The company currently expects adjusted or core earnings per share in the range of $14.30-$4.50, up from prior guidance range of $13.80-$14.00. The company continues to expect 2018 revenues in the range of $96-$98 billion. (Read: Boeing Beats on Earnings in Q1, Hikes '18 EPS View)
Caterpillar delivered adjusted earnings per share of $2.82 in first-quarter 2018, surging a whopping 120% year over year. Earnings also surpassed the Zacks Consensus Estimate of $2.11 by a margin of 34%. Revenues improved 32% year over year to $12.9 billion in the quarter, surpassing the Zacks Consensus Estimate of $11.6 billion.
Caterpillar now expects adjusted earnings per share between $10.25 and $11.25 for fiscal 2018. The company had earlier provided adjusted earnings per share guidance of $8.25-$9.25 for the fiscal. The stock has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Coca-Cola Company (KO - Free Report) kicked off 2018 on a strong note, beating the Zacks Consensus Estimate on both counts in the first quarter. First-quarter 2018 comparable earnings of the company were 47 cents per share, surpassing the Zacks Consensus Estimate of 46 cents.
Revenues of $7.63 billion in the quarter surpassed the Zacks Consensus Estimate of $7.43 billion. However, net revenues declined 16% year over year due to the negative impact of structural items.
In 2018, Zacks Rank #3 (Hold) Coca-Cola expects organic revenues to increase 4%. The company expects adjusted EPS to grow 8-10% from the prior -year’s comparable EPS of $1.91. (Read: Coca-Cola Stock Gains on Q1 Earnings & Revenue Beat)
Verizon Communications Inc. (VZ - Free Report) started 2018 on a positive note with a relatively healthy performance in the first quarter, primarily led by the wireless business. Excluding non-recurring items, adjusted earnings were $1.17 per share compared with 95 cents in the year-earlier quarter and comfortably exceeded the Zacks Consensus Estimate of $1.11.
Excluding revenues from divested businesses, non-GAAP consolidated revenues were $29.9 billion, which missed the Zacks Consensus Estimate of $31,157 million.
For full year 2018, Zacks Rank #3 Verizon expects both GAAP revenues and adjusted earnings per share to increase by low single-digit percentage rates driven by expected savings from tax reform and higher cash flow from operations. (Read: Verizon Beats Q1 Earnings on Solid Wireless Business)
United Technologies Corporation reported first-quarter 2018 adjusted earnings of $1.77 per share, which trumped the Zacks Consensus Estimate of $1.51 and rose 19.6% year over year. United Technologies has a Zacks Rank #3.
Net sales in the reported quarter came in at $15,242 million, up 10.3% from the year-ago quarter’s figure. Quarterly sales exceeded the Zacks Consensus Estimate of $14,537 million.
Backed by these positives, the company raised its full-year 2018 earnings and sales guidance. The company now expects adjusted earnings between $6.95 and $7.15, up from the previous range of $6.85-$7.10. Additionally, the company raised revenue guidance for 2018 from earlier range of $62.5-$64 billion to a band of $63-$64.5 billion. (Read: United Technologies Lifts '18 View on Solid Q1 Earnings)
The Travelers Companies, Inc.’s (TRV - Free Report) first-quarter 2018 core income of $2.46 per share missed the Zacks Consensus Estimate of $2.68 by 8.2%. However, the bottom line improved 13.9% year over year. Travelers has a Zacks Rank #3.
Total revenues of Travelers rose nearly 5% from the year-ago quarter to $7.3 billion. Also, the top line beat the Zacks Consensus Estimate of $7.2 billion. (Read: Travelers Q1 Earnings Miss Estimates, Revenues Beat)
Visa reported second-quarter fiscal 2018 (ended Mar 31, 2018) earnings of $1.11 per share, beating the Zacks Consensus Estimate by 9.9%. Also, the bottom line improved 30% year over year. Visa has a Zacks Rank #3.
Net operating revenues of $5.07 billion surpassed the Zacks Consensus Estimate of $4.77 billion. Also, revenues climbed 13% year over year. Driven by strong results and a favorable outlook for the remainder of the year, Visa raised its 2018 guidance provided earlier. (Read: Visa Beats Q2 Earnings Estimates, Raises 2018 Guidance)
Performance of the Top 10 Dow Companies
The table given below shows the price movements of the 10 largest components of the Dow, which is a price weighted index, over the last five days and during the last six months. Over the last five trading days, the Dow has declined 0.8%.
Next Week’s Outlook
Markets staged a solid recovery this week from their recent phase of losses. Bullish earnings results were principally responsible for such a turn of events. A decline in the 10-year Treasury yield from the 3% mark also helped lessen investor concerns.
As we head into the next week, investors will also focus on crucial economic releases such as GDP data. Good news from this front will certainly help the Dow notch up more gains in the week ahead.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>