Benchmarks finished mostly higher on Wednesday following upbeat quarterly results from healthcare and technology companies. Apple and Biogen’s impressive quarterly performances helped the S&P 500 and the Nasdaq close in the green. The S&P 500 closed at a record level for the 26th time this year. However, analysts took a dim view of Boeing’s results and Caterpillar reported weak monthly sales, leading to losses for the blue-chip index.
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The Dow Jones Industrial Average (DJI) dropped almost 0.2% to close Wednesday’s trading session at 17,086.63. The Standard & Poor 500 (S&P 500) advanced 0.2% to finish at 1,987.01. The tech-laden Nasdaq Composite Index closed at 4,473.70; gaining 0.4%. The fear-gauge CBOE Volatility Index (VIX) plunged 5.9% to settle at 11.52. Total volume on the New York Stock Exchange (NYSE) was about 2.8 billion. Advancers outpaced declining stocks on the NYSE. For 56% stocks that advanced, 41% declined.
Shares of tech-bellwether Apple Inc. (AAPL - Free Report) went up 2.6% a day after the company reported third-quarter 2014 earnings per share of $1.28, beating the Zacks Consensus Estimate by 6 cents. Earnings also jumped 19.6% year over year. The iPhone maker had reported its results after the markets closed on Tuesday.
Microsoft Corporation (MSFT - Free Report) had also reported fiscal fourth quarter earnings results after the closing bell on Tuesday. The tech behemoth reported earnings per share of 55 cents, less than the Zacks Consensus Estimate of 60 cents. However, shares of the Dow component gained about 0.1% on Wednesday as the company declared that it aims to get its loss-making Nokia phone segment to break-even within two years. Further, the recent restructuring plan to simplify its organization, directional clarity and the decision to focus on fast-growing segments that play to its strengths increased optimism about Microsoft’s shares.
Biogen Idec Inc. (BIIB - Free Report) reported better-than-expected quarterly earnings and sales results. The bio-tech company reported second quarter 2014 earnings per share of $3.48, better than the Zacks Consensus Estimate of $2.80. Including one-time items, earnings increased 46% to $3.01 per share. The company posted second quarter revenues of $2.4 billion, above the Zacks Consensus Estimate of $2.1 billion.
Biogen also increased its guidance for 2014. The company now expects earnings in the range of $12.90 - $13.10 per share, more than the Zacks Consensus Estimate of $11.69. Shares of Biogen soared 11.2%.
Biogen’s impressive performance boosted bio-tech stocks. Shares of bio-tech companies such as Gilead Sciences Inc. (GILD - Free Report) , Vertex Pharmaceuticals Incorporated (VRTX - Free Report) Amgen Inc. (AMGN - Free Report) , Celgene Corporation (CELG - Free Report) and Regeneron Pharmaceuticals, Inc. (REGN - Free Report) increased 1.1%, 0.4%, 0.7%, 2.8% and 1.4%, respectively. The Health Care Select Sector SPDR (XLV) advanced 0.8%, the biggest among the S&P 500 sectors.
Shares of Intuitive Surgical, Inc. (ISRG - Free Report) surged 17.7%, a day after the company posted earnings per share of $3.03 for the second quarter, beating the Zacks Consensus Estimate of $2.76. Intuitive Surgical turned out to be S&P 500’s biggest percentage gainer.
Among other positive results, Pepsico, Inc. (PEP - Free Report) reported second-quarter 2014 core earnings per share of $1.32, beating the Zacks Consensus Estimate of $1.23. Delta Air Lines reported second-quarter 2014 adjusted earnings of $1.04 per share, edging past the Zacks Consensus Estimate of $1.03 cents. Shares of Pepsico and Delta Air Lines gained 1.9% and 3.9%, respectively.
The Boeing Company (BA - Free Report) reported adjusted second quarter 2014 earnings of $2.42 per share, beating the Zacks Consensus Estimate by 19.8%. However, shares of the company went down 2.3% as analysts were concerned about cash flow and the rise in cost of its military tanker program. The company incurred about $700 million in cost during the development of its KC-46 refueling tanker. The drop in the share price of the aerospace giant negatively impacted the blue-chip index.
Caterpillar Inc. (CAT - Free Report) also weighed on the Dow after the world’s largest equipment manufacturer reported weak monthly sales in mining equipment and engines. Shares of Caterpillar declined 1.5%.
Meanwhile, investors kept an eye on the recent ongoing tension in Ukraine. A spokesperson from Ukraine’s military operations said two Ukrainian fighter jets were gunned down near the area where the Malaysian Airline jet MH17 was shot down last Thursday. Meanwhile, Israel continued its ground offensive along the Gaza strip despite repeated appeals from the international community to cease military operations.
Coming back to the domestic front, 7 out of 10 sectors of the S&P 500 ended in the green. The Energy Select Sector SPDR (XLE) advanced 0.6%, the second highest among the S&P 500 sectors. Key energy stocks such as Exxon Mobil Corporation (XOM), Chevron Corporation (CVX) and Halliburton Company (HAL) gained 0.7%, 0.9% and 1.0%, respectively.