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Stocks Rally from Session Lows: 3 Great Earnings Reports to Thank
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After witnessing sharp losses in morning trading, U.S. stocks rallied into the afternoon hours to finish nearly 2% higher than session lows. Initial selling seemed inspired by pressure carried over from foreign markets, but as the day went on, investors were willing to reward a handful of positive earnings reports with renewed bullishness.
In morning trading, U.S investors were worried about fresh selling in China, which defied a brief two-day rebound and reignited volatility in a market that has been punished throughout the year. The promise of new tax cuts and other economic stimuli initially looked to inspire a bottom for Chinese stocks, but now some are questioning if that low point has come just yet.
Uncertainty also lingers in Europe, where EU regulators today rejected Italy’s proposed 2019, sending the country’s new populist back to the drawing board. Italian officials have said increased spending is necessary to support its most impoverished citizens, but now the Southern European nation’s next move is unclear.
International headwinds were exacerbated before U.S. markets opened, with the latest earnings report from Caterpillar (CAT - Free Report) sparking yet another conversation about ongoing tariff battles. Caterpillar was able to surpass earnings and revenue estimates and maintain its full-year guidance, but management issued cautious words about the rise of material costs due to ongoing trade disputes, and that was enough to send the stock tumbling.
But throughout the day, sentiment shifted and began to focus more on the strong reports that were released before the bell Tuesday.
One such report was that of fast-food giant McDonald’s (MCD - Free Report) . The burger behemoth posted earnings of $2.10 per share and revenue of $5.37 billion, outpacing estimates on both ends. McDonald’s also reported its 13th consecutive quarter of positive same-store sales growth, thanks in part to a revamped Dollar Menu and larger average tickets.
McDonald’s and its franchise owners are spending plenty of cash to revitalize restaurants, and while we are still waiting to see broader uptrends from those efforts, the company has been buoyed by initial results of those initiatives in foreign markets.
Another strong report posted this morning came from Verizon (VZ - Free Report) ). The telecom giant saw adjusted earnings of $1.22 per share in the most recent quarter. This beat our consensus estimate of $1.19 and compares favorably to the $0.98 seen in the year-ago period. Consolidated GAAP revenue was up 2.8% in the period, with wireless revenue notching growth of 6.5%.
Verizon witnessed healthy growth in its wireless equipment and services segments, and the company is well positioned to benefit from the deployment of 5G networks. For full-year 2018, Verizon reiterated its earlier guidance and continues to expect both GAAP revenues and adjusted earnings per share to increase by low single-digit percentage rates.
United Technologies also joined the fun this morning with its own Q3 report. The conglomerate notched adjusted earnings of $1.93 per share, surpassing the Zacks Consensus Estimate by 6.6%. The reported figure also improved from last year’s total of $1.73 per share. Revenues in the quarter were up 9.6% year over year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Stocks Rally from Session Lows: 3 Great Earnings Reports to Thank
After witnessing sharp losses in morning trading, U.S. stocks rallied into the afternoon hours to finish nearly 2% higher than session lows. Initial selling seemed inspired by pressure carried over from foreign markets, but as the day went on, investors were willing to reward a handful of positive earnings reports with renewed bullishness.
In morning trading, U.S investors were worried about fresh selling in China, which defied a brief two-day rebound and reignited volatility in a market that has been punished throughout the year. The promise of new tax cuts and other economic stimuli initially looked to inspire a bottom for Chinese stocks, but now some are questioning if that low point has come just yet.
Uncertainty also lingers in Europe, where EU regulators today rejected Italy’s proposed 2019, sending the country’s new populist back to the drawing board. Italian officials have said increased spending is necessary to support its most impoverished citizens, but now the Southern European nation’s next move is unclear.
International headwinds were exacerbated before U.S. markets opened, with the latest earnings report from Caterpillar (CAT - Free Report) sparking yet another conversation about ongoing tariff battles. Caterpillar was able to surpass earnings and revenue estimates and maintain its full-year guidance, but management issued cautious words about the rise of material costs due to ongoing trade disputes, and that was enough to send the stock tumbling.
But throughout the day, sentiment shifted and began to focus more on the strong reports that were released before the bell Tuesday.
One such report was that of fast-food giant McDonald’s (MCD - Free Report) . The burger behemoth posted earnings of $2.10 per share and revenue of $5.37 billion, outpacing estimates on both ends. McDonald’s also reported its 13th consecutive quarter of positive same-store sales growth, thanks in part to a revamped Dollar Menu and larger average tickets.
McDonald’s and its franchise owners are spending plenty of cash to revitalize restaurants, and while we are still waiting to see broader uptrends from those efforts, the company has been buoyed by initial results of those initiatives in foreign markets.
Another strong report posted this morning came from Verizon (VZ - Free Report) ). The telecom giant saw adjusted earnings of $1.22 per share in the most recent quarter. This beat our consensus estimate of $1.19 and compares favorably to the $0.98 seen in the year-ago period. Consolidated GAAP revenue was up 2.8% in the period, with wireless revenue notching growth of 6.5%.
Verizon witnessed healthy growth in its wireless equipment and services segments, and the company is well positioned to benefit from the deployment of 5G networks. For full-year 2018, Verizon reiterated its earlier guidance and continues to expect both GAAP revenues and adjusted earnings per share to increase by low single-digit percentage rates.
United Technologies also joined the fun this morning with its own Q3 report. The conglomerate notched adjusted earnings of $1.93 per share, surpassing the Zacks Consensus Estimate by 6.6%. The reported figure also improved from last year’s total of $1.73 per share. Revenues in the quarter were up 9.6% year over year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>