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Markets Flat Following Challenging Week

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Market indices closed flat to finish the first trading day of the week, following the single-worst trading week of the year (so far). We had expected perhaps something more of a bounce back, which we did indeed see early into the session (the Dow was +373 points at its intraday high), but, while every major index closed in the green, they were all near session lows. The Dow gained +72 points, +0.22%; the S&P 500 was +0.31%; the Nasdaq won the day with +0.63% and the small-cap Russell 2000 came in at +0.31%.

A half hour after today’s open, Pending Home Sales came in much higher than expected: +8.1% for the month of January, compared to the +0.9% reported the previous month. This is the second-straight improvement after an all-time low plateau October and November and the highest single-month jump since June 2020. That said, we’re still registering -24.1% year over year — meeting where we were back in August of 2022. As we know, home prices were the first domino to drop in the Fed’s initial dot-plot of raising interest rates to curb inflation.

Another housing print awaits us tomorrow morning before the opening bell, with the Case-Shiller Home Price Index expected to report. This metric is notable for its strength in accuracy, but also for how far in arrears — December 2022 — this data will cover. As it currently stands, Case-Shiller data is riding a five-month streak of lower home prices overall, on both the 10-city and 20-city indices. Of late, home prices in Florida — Tampa, Miami and elsewhere — have taken over from Souther California as the hottest home price regions in the U.S.

After today’s close, Zoom Video (ZM - Free Report) obliterated its earnings estimates (following lowered guidance previously) by posting $1.22 per share versus 79 cents in the Zacks consensus — a mere 7 cents below the year-ago quarter, which still benefited greatly from work-from-home trends. Zoom still has yet to report an earnings miss in its four years of being publicly traded. Revenues of $1.12 billion also outpaced expectations of $1.10 billion. Guidance was raised for next-quarter and full-year EPS, but nudged down on the top line for both.

Also, Workday (WDAY - Free Report) posted beats on both top and bottom lines in its fiscal Q4 report this afternoon: earnings of 99 cents per share outperformed the Zacks consensus by a solid dime, while revenues in the quarter reached $1.65 billion, ahead of the $1.63 billion anticipated. The company cited “durable demand” for its financial and human resources products, though its guidance on subscriptions remains at the midpoint of expectations. Shares, after initially popping on the news, are now down -3% in the late trading session.

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