Tech Wins, Dow Loses: Wednesday’s IP Market Recap

by Marc Bastow | July 24, 2013 5:04 pm

New home sales hit a five-year high and Europe’s PMI jumped over 50, providing some optimism for eurozone, but it still wasn’t enough to push all the major markets forward. A broad sell-off killed hopes of another Dow record and stopped the S&P 500 cold[1].

Indeed, the S&P 500, which lost 0.38% to close at 1685.94, suffered its first two-day losing streak since late June. The Dow Jones Industrial Average bounced off Tuesday’s record high to close down 0.16% at 15542.24. The bright spot on the day was the Nasdaq, which rose fractionally to 3579.60 on a strong performance in the tech sector.

Earnings news topped headlines as a suddenly resurgent Apple (AAPL[2]) soared ahead over 5% following its after-hours report on Tuesday. The tech giant beat estimates[3] and sold a record number of iPhones. The rise overshadowed a similar 5% move by EMC (EMC[4]) who reported earnings in line with analyst estimates, helped by a strong performance at VMware (VMW[5]), which is majority owned by EMC. VMW jumped up over 16%.

Tech’s good news continued after hours, as Facebook (FB[6]) shares shot up nearly 20%[7] — crossing the $30 per share mark — after announcing revenue jumped 53% year-over-year in the second quarter. Mobile ads rose to 41% of total ad revenue, up from 30% in the first quarter.

The aerospace and defense sector followed Tuesday’s solid results from Lockheed Martin (LMT[8]) with a General Dynamics (GD[9]) earnings beat. Northrop Grumman (NOC[10]) also topped estimates and upped its earnings and revenue estimates for the full year. Both were up just under 2% for the day.

Not so fortunate was Caterpillar (CAT[11]) which saw shares plummet after announcing its second quarter profits dropped 43% compared to last year. Its EPS of $1.45 per share was well behind analyst estimates of $1.70. CAT fell over 2% to register the largest loss on the Dow.

Joining CAT on the slide were Joy Global (JOY[12]), which sank over 3%, Terex (TEX[13]) which lost over 2%, Deere (DE[14]) and Cummins (CMI[15]), which both fell over 1%.

Beverage-maker Dr. Pepper Snapple (DPS[16]) announced that both top and bottom line figures fell year-over-year in Q2 while missing analyst estimates. The market sent its shares down nearly 3%. PepsiCo (PEP[17]), on the other hand, reported a 35% rise in year-over-year second quarter earnings, beating estimates and hitting revenue targets. Investors were unimpressed and the stock ended down just under 1%.

Finally, Dell (DELL[18]) shareholders got a boost when founder Michael Dell and his Silver Lake Partners upped their bid for the company by 10 cents per share to $13.75 and postponed the voting until Aug. 2. Shares closed at $12.91. I guess the best thing to say: Stay tuned[19].

Earnings reports on the calendar for Thursday include Amazon (AMZN[20]), General Motors (GM[21]), and Starbucks (SBUX[22]).

Three Up

• Illumina (ILMN[23]): Up 10.57% ($7.80) to $81.57
• Electronic Arts (EA[24]): Up 6.65% ($1.58) to $25.41
• Goodrich Petroleum (GDP[25]): Up 3.26% (52 cents) to $16.46

Three Down

• Broadcom (BRCM[26]): Down 15.14% ($4.82) to $27.01
• Alpha Natural (ANR[27]): Down 6.29% (37 cents) to $5.51
• RadioShack (RSH[28]): Down 4.68% (13 cents) to $2.65

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he is long AAPL.

Source URL: https://investorplace.com/2013/07/wendesdays-ip-market-recap-aapl-emc-vmw-cat-dt/

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