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.
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) soared ahead over 5% following its after-hours report on Tuesday. The tech giant beat estimates and sold a record number of iPhones. The rise overshadowed a similar 5% move by EMC (EMC) who reported earnings in line with analyst estimates, helped by a strong performance at VMware (VMW), which is majority owned by EMC. VMW jumped up over 16%.
Tech’s good news continued after hours, as Facebook (FB) shares shot up nearly 20% — 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) with a General Dynamics (GD) earnings beat. Northrop Grumman (NOC) 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) 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), which sank over 3%, Terex (TEX) which lost over 2%, Deere (DE) and Cummins (CMI), which both fell over 1%.
Beverage-maker Dr. Pepper Snapple (DPS) 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), 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) 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.
Earnings reports on the calendar for Thursday include Amazon (AMZN), General Motors (GM), and Starbucks (SBUX).
- Illumina (ILMN): Up 10.57% ($7.80) to $81.57
- Electronic Arts (EA): Up 6.65% ($1.58) to $25.41
- Goodrich Petroleum (GDP): Up 3.26% (52 cents) to $16.46
- Broadcom (BRCM): Down 15.14% ($4.82) to $27.01
- Alpha Natural (ANR): Down 6.29% (37 cents) to $5.51
- RadioShack (RSH): 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.