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

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

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

IPMarketRecap Tech Wins, Dow Loses: Wednesdays IP Market RecapNew 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

Three Down

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

Endnotes:
  1. stopped the S&P 500 cold: http://investorplace.com/2013/07/the-sp-500-implodes-right-on-cue/
  2. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  3. beat estimates: http://slant.investorplace.com/2013/07/apple-stock-aapl-earnings-iphone-sales/
  4. EMC: http://studio-5.financialcontent.com/investplace/quote?Symbol=EMC
  5. VMW: http://studio-5.financialcontent.com/investplace/quote?Symbol=VMW
  6. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  7. shares shot up nearly 20%: http://investorplace.com/2013/07/facebook-earnings/
  8. LMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=LMT
  9. GD: http://studio-5.financialcontent.com/investplace/quote?Symbol=GD
  10. NOC: http://studio-5.financialcontent.com/investplace/quote?Symbol=NOC
  11. CAT: http://studio-5.financialcontent.com/investplace/quote?Symbol=CAT
  12. JOY: http://studio-5.financialcontent.com/investplace/quote?Symbol=JOY
  13. TEX: http://studio-5.financialcontent.com/investplace/quote?Symbol=TEX
  14. DE: http://studio-5.financialcontent.com/investplace/quote?Symbol=DE
  15. CMI: http://studio-5.financialcontent.com/investplace/quote?Symbol=CMI
  16. DPS: http://studio-5.financialcontent.com/investplace/quote?Symbol=DPS
  17. PEP: http://studio-5.financialcontent.com/investplace/quote?Symbol=PEP
  18. DELL: http://studio-5.financialcontent.com/investplace/quote?Symbol=DELL
  19. Stay tuned: http://slant.investorplace.com/2013/07/dell-buyout-delayed-but-really-who-cares/
  20. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  21. GM: http://studio-5.financialcontent.com/investplace/quote?Symbol=GM
  22. SBUX: http://studio-5.financialcontent.com/investplace/quote?Symbol=SBUX
  23. ILMN: http://studio-5.financialcontent.com/investplace/quote?Symbol=ILMN
  24. EA: http://studio-5.financialcontent.com/investplace/quote?Symbol=EA
  25. GDP: http://studio-5.financialcontent.com/investplace/quote?Symbol=GDP
  26. BRCM: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRCM
  27. ANR: http://studio-5.financialcontent.com/investplace/quote?Symbol=ANR
  28. RSH: http://studio-5.financialcontent.com/investplace/quote?Symbol=RSH

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